Saturday, October 11, 2014

AU trademark works in progress day 2

Dan Hunter (with Irene Calboli), Trademark Proliferation

Concerns about too many marks.  They’re extremely weak as a result.  It’s easy to get a descriptive mark on the primary register w/o secondary meaning.  Also: many “marks” don’t seem distinctive as to source. They’re recognizable, but not distinctive as to source; those aren’t the same thing.  So how did they get on the register?  Same proliferation in every country. 

This is about distinctiveness.  Much focus has been on infringement, but wanting to go back to the beginning and address proliferation of weak marks.  Our characterizations of inherent distinctiveness are underexplained: why is an arbitrary or fanciful word source-identifying rather than simply being unique within a symbolic system?  The other part is secondary meaning, where it’s even worse. Types of marks have been expanded radically to include color, etc., and we accept that sound/touch/etc. can be distinctive with secondary meaning. Again, that doesn’t make a lot of sense.   Recognizing something as a mark doesn’t mean we recognize it as source distinctive, especially for merchandising right—Yankees on hats.

Cognitive science literature: System 1 is immediate and not thoughtful; System 2 is thoughtful but lazy. Oftentimes we answer the System 1 question, is this thing recognizable, when we’re supposed to answer the System 2 question, is this thing identifying a source?  Splitting those apart is the point of the paper.

Poor theory of distinctiveness + incredibly strong rights = trademark proliferation, land grab for expressive components of society b/c it’s in their interests to do so.  What can we do to fix it?  Not sure it’s fixable.

Irene Calboli: statutory definition requires merely difference from genericity and recognizability: that’s extremely broad.  TTAB is reluctant to recognize aesthetic functionality.  One possibility: nobody needs more than one name per product, not taglines/colors/etc.

Hinchcliffe: Breaking circularity: what is the motivating rationale of the article?  What impact on the modern TM regime do you want?

Hunter: Fixing it is very hard, but we want to explore the idea of why there are so many things not functioning as trademarks that are legally recognized as trademarks. A reduced number of marks might make it easier to believe that things recognized as marks are marks—from the theoretical to the simplest (if unlikely).

Calboli: Judges could have some reason to say a mark isn’t distinctive. To try to raise the bar can be useful. We have lots of defenses, but they come in too late if at all. Too many people are grabbing aesthetics. Likes strong rights, but strong rights for limited numbers of marks.

Cathay Smith: would it help if all marks had to show secondary meaning regardless of Abercrombie categorization?

Hunter: secondary meaning as to source distinctiveness, but he doesn’t know how to prove that.  Doesn’t know how to demonstrate that when I recognize Exxon, that I’m identifying it with source as opposed to being able to pick it out of a lineup.  If we could craft relevant instruments, then asking for secondary meaning would help.

Calboli: the nature of TM is to be subjective, but there are some instances where you could get rid of the protection.  Should be more than aesthetic—TM is not the right law to use.  Perhaps there should be case for sui generis protection to avoid land grab.

RT: Judge Leval’s claims in J&J v. P&G: an example of the problem?  He thought that requiring secondary meaning evidence more often could help.  But cf. Lisa Ramsey (making the argument that only arbitrary etc. marks should be protected, not descriptive marks at all). Bone/Wal-Mart on error costs: source identification is expensive to determine, which I think the paper is clear about in struggling w/solutions.  Rock & Roll Hall of Fame case does try to split it apart for particular reasons having to do with protecting free expression.

But why aren’t consumers also likely to do the same cognitive processing when they encounter the mark and conflate the two, even when making a purchasing decision?  Laziness is often a characterization of consumers relied on by trademark expansionists, see Ann Bartow on visions of the consumer in TM. Why aren’t good plaintiffs’ confusion surveys evidence that people are identifying a mark with a source, not just recognizing it? We are trained for recognition of marks and it’s hard to distinguish that from recognizing source: are you really just objecting to the merchandising right?  I recognize Crest as a source for toothpaste and that’s why I buy, but that’s not true for all uses of marks.  TTAB case on jean pockets where the applicant argues that pockets have become a place where consumers expect marks. 

Can your claims be reconciled w/the statute and its claim about anonymous source?  Cf. 4th circuit’s AOL v. AT&T, where the court says the registration makes summary judgment impossible despite extensive evidence of descriptiveness.  Design patents/design rights are the sui generis protection Calboli wants, aren’t they?  Mark McKenna on channeling doctrines.

Hunter: why aren’t consumers doing the same sorts of things as the maximalists?  That’s the key question.  We do rely on Crest; it’s extremely well known. One thing you could say is that well-known marks that have in fact met people’s preferences will work as source identifiers.  There must be some marks that are source identifying.  But wants to contest the idea that just because we’re trained to recognize marks, we’re trained to recognize source for the ones at the middle/the ones at the bottom that are the starting point of our article.  The reason the marks strike us as bizarre is that they’re overreaching; trying to protect too small a component or trying to protect aesthetic appeal.  So consumers are lazy and we do recognize some things as delivering consistent quality; not all marks are problematic.  Confusion surveys: what is the role of confusion?  Also there are many issues with poorly drafted surveys.  Look at the surveys that have been accepted as appropriate.

Calboli: Crest is a working mark.  To her the problem is that the “mark” has to be distinctive—she has no problem w/anonymous source if it works. The problem is nontraditional trademarks and proliferation/extension into areas where no mark should exist. It’s possible because of the idea of distinctiveness from the broad wording of the statute, even when the thing is decorating/embellishing the product.  The answer may be really expanding the functionality doctrine.  Too hesitant

RT: Sounds to me like expanding the concept of de facto secondary meaning.  De facto distinctiveness but not de jure distinctiveness?  (Calling it secondary meaning already obscures what’s going on—it’s a disavowal of what we’re saying, which is that some symbol is functioning the way we ordinarily expect a mark to function, but we’re still not going to protect it for competitive reasons.)

Grinvald: David Barnes makes a similar argument from a marketing perspective.  Add more on Beebe’s semiotic analysis. 

Hunter: if what we’re saying is right, then semiotics doesn’t provide the answers Beebe wants to provide.  The semiotic turn doesn’t provide us with analytical framework to make the sorting move we want to make. [Barton, feel free to call!]

Colman: not sure you need to reject Beebe to accomplish what you want. He talks about failure of Abercrombie scheme for not identifying what kind of distinctiveness a mark has come to represent: distinguishes source distinctiveness from differential distinctiveness.  What you want beyond that is empirical data.  [discussion of Louboutin]

Hunter: It’s not about a new normative foundation: something that is distinctive as to source should give entitlements to the rights we want TM to have. But right now we’re recognizing marks at too early in the process.

Colman: Calboli seems to say that people are grabbing aesthetic elements—even if people recognize the Bottega leather weave they shouldn’t have rights over it.

Calboli: these can coexist. We should exclude types from the register, and even within that some marks could fit within the proper definition of distinctiveness but aren’t.  Most slogans aren’t serving a distinctive function—you might recognize them, but if I said “let’s go to [Home Depot’s slogan instead of Home Depot’s name]” you’d have no idea where I meant.

LaFrance: suggest ways of empirical testing the concept of source identification.  SCt in Wal-Mart says consumers are trained to recognize words, not packages—that isn’t based on empirical evidence, but it has intuitive power.  Plausible that some things, such as fanciful words, immediately lead to conclusion that these are marks.  Testing that empirically should be impossible.  One mark per product: sub-product lines are important in practice.

Farley: this isn’t really a paper about TM proliferation. It’s really about distinctiveness.  That’s supposed to be the main function of trademarks, and you’re asking what it is.  SCt punted on the applicability of Abercrombie to word marks even though courts were struggling with its application to trade dress. Landscape Forms: the parties go up and down the court system and the courts have a huge problem figuring out how to ask the question of distinctiveness—the test ends up avoiding any real issue of source identification.  What does the consumer do with the information “Green Giant” on a can of peas?  J. Friendly thinks that it doesn’t identify the content of the can, or the price of the product, and consumer then tries to make sense of it: it must be a brand.

TM proliferation takes us so far from that can of peas.  Proliferation in itself could undermine consumers’ ability to understand the visual presentation they encounter.  Wal-Mart also went in the same direction: how do consumers interpret what they encounter by default.  But now we’re being so overwhelmed with sense/inputs that we couldn’t possibly regard them all as source identifiers.  [Now I want to bring in Grice’s theory of implicature as an explanation of what consumers might take away from a symbol.]  We need to give direction to judges about which survey questions are the right ones: not top of mind recall.

Colman: distinctiveness has gone from being necessary to being sufficient and you want to take it back. May be confusing to introduce the Louboutin red sole/Bottega weave which gets into aesthetic functionality—slogans or other examples might make your target clearer.

Mary LaFrance, False Advertising Claims against Product Names and Labels

Pom Wonderful as jumping off point: decided correctly, but opens the door to great uncertainty about what in the future will constitute sufficient accuracy in product names/labels to avoid liability for false advertising. FDA rules are a floor, not a ceiling.  Most examples involve consumable goods—food, beverages, supplements, drugs. 

State laws: preemption status isn’t clear for unfair competition, if a remedy would require inconsistency w/FDA labeling requirements, but Lanham Act false advertising claims aren’t precluded. Juicy Fruit gum: could that be misleading even though it doesn’t have juice or fruit? We don’t know what the standard is, which creates uncertainty. That may prompt more detailed disclosure.  Also, since only competitors have standing and not consumers, they all live in glass houses, so they may be hesitant to sue because they live in glass houses.  Consumer suits are already going on and won’t be affected much by Pom; the possibility of frivolous lawsuits like the one against Crunch Berries is already available.  Greater risk of misleadingness by name versus label?  Most people don’t look at the ingredients list.  Williams v. Gerber, the court said: just because the FDA imposes regulations requiring listing ingredients shouldn’t give leeway to be misleading in the name of the product.  Implies strict standards for names.  Yet our experience w/product names like Juicy Fruit may make us inherently skeptical about product contents based on name versus other things on the label—but children may be relevant consumers.

Registration: deceptive marks are unregistrable, which is a disincentive. But deceptively misdescriptive marks are registrable, and could be misleading even if ruled not deceptive by PTO.  Suggestive marks could also be deceptive to some consumers, yet we treat them as inherently distinctive.

Colman: care or sophistication of consumer may make a big difference with suggestive marks.  Vulnerable/gullible consumers are protected under California state law.  While federal judges are ad hoc about consumer competency, they are more regularized under California UCL. [I think everybody tends to think that the body of law they study is more incoherent/has more conflicting cases than other bodies of law—I know I’m not immune.  Law is fractal!]

Broader question of interaction of Lanham Act with other federal laws—he thinks there should be a presumption of aesthetic functionality from the existence of a design patent, but courts don’t pay attention to that.

LaFrance: true that courts don’t think about interactions enough. Thus the possible preemptive effect of the FDA scheme over general state unfair competition laws is so unsettled right now. 

Grinvald: Images are really problematic!  Especially w/vulnerable populations or people who aren’t going to read the label. Uncertainty as a good thing: forces advertisers to take labeling seriously.  “Made in USA” as another particularly hot area.  Competitor lawsuits: is that a good thing that they’re just between competitors?  In-house, we were willing to sue even though it was expensive and even though we could only get injunctive relief if the ad was bad enough for us. Not really on behalf of consumers.  Why don’t consumers have standing?

LaFrance: companies should generally ensure they have their own houses in order before they sue.

Grinvald: depends on where the ad is.  If other competitors were already looking at you and sending C&Ds, not much of a deterrent.

RT: (1) Doesn’t seem like a name-specific problem. Pom’s claim was also based on the fruit vignette.  We do know what the standard is: don’t be false or misleading, which would be the same regardless of where the claim was made. You suggest there might be a consumer predisposition to discount names compared to other claims. There’s a huge amount of marketing literature on this; e.g., study about slogans’ directness versus brand names’, or images versus words.

(2) I don’t think the Court was at all uncertain whether Pomegranate Blueberry was the name; it was uncertain about what other words were part of the name. (The briefs and the oral argument, I think, support this.)  Relatedly: My advice is to include a picture where possible in your discussion.  Note that Pom had issues w/its own Pomegranate Blueberry juice not being 100% those juices, though it was a lot closer. 

(3) The effect of name/label being on package on class action standing/ascertainability/other issues.  Makes a class action more plausible than other marketing elements, especially ads detached from the product itself.

(4) Boris v. Wal-Mart Stores, Inc., 2014 WL 1477404 (C.D. Cal. Apr. 9, 2014): Plaintiffs sued Wal-Mart for deceptively marketing Equate Migraine and Equate Extra Strength Headache Relief (Equate ES); the different names were a key part of the claim.

Smith: Should there be different standards for names versus other elements?  May draw consumers in.

Hunter: Do you have a theory? What’s going on descriptively is of interest, but is there a normative or grand descriptive way of understanding what’s going on.

LaFrance: for now, it’s that uncertainty is not a bad thing, but we can’t have a standardless rule. We need a rule for testing names/labels, and should know whether the standards are different for names based on what our goals are.

More interaction between TM and false advertising: what do we mean by deceptive?

Hinchcliffe: connection to geographic indications as well.  Wine law could benefit from this research.  Address anticompetitive issues.

LaFrance: if companies feel they need more surveys to determine how name will be perceived, that’s expensive and may be difficult for new entrants.  But you can save the money if your label is painfully honest.  But maybe that puts you at a disadvantage to a company with survey evidence that consumers aren’t fooled.

Calboli: we tend to protect companies over their consumers once there’s distinctiveness. Stronger false advertising laws/labeling laws in Europe; class actions are different.  We have cases like LOVEE LAMB (misleading), but otherwise we try to save the mark rather than consumers and use other tools than TM.  Food regulations: what the consumer gets may diverge, since they think that “organic” means “free range” but it doesn’t.

Farley: interested in consumer skepticism. To what extent do these areas of law address that?  BATF regulations of alcohol, different from TM standards.

[discussion of consumer skepticism and its malleability or lack thereof (my position: it’s not very malleable; general characteristics like age and education are far more important than any learning that goes on, but there are substantial individual differences that make it hard to figure out how that might apply to the law since both high-skepticism and low-skepticism people buy yogurt).  If labeling something as cheaper makes it perform worse (as some research indicates), then one implication is that grey market goods correctly labeled as imported are always materially different because they’re likely to be perceived as performing differently.  I’m cool with that because I don’t think material difference is an appropriate standard for liability as long as the consumer knows the truth.]

Sarah Hinchliffe, Scandalous Marks

Genesis of the project: Aust’l mark Nucking Futs for nuts.  How did that happen?  How well does the TM regime deal with scandalous marks?  (Not at all well.)  Relatively easy to register an offensive mark compared to the US, which seems more conservative. Unique cultural considerations. Courts often depart from the guidelines used by the TM Office. 

European region has more coherent framework for denying “immoral” registrations, balancing moral considerations with the right to free expression.  Harmonization in the internal market; right of the public not to be confronted with disturbing/threatening marks.  More conservative than US.  But still no clear tangible test for the application of the relevant ban.  Seeks to fill this gap.

Ways to improve the system: Need compliance w/human rights rules; personal views of the tribunal ought to be irrelevant.  The legality of the use of the mark is a relevant consideration.  Need a generally morally accepted principle which the use of the mark would genuinely contravene. Mere offense should not be enough.  Threat/attack is more likely to be scandalous than nonthreatening mark.

Hunter: always a risk in comparative law: pure descriptiveness.  Differences may be attributed to culture.  Different recommendations will be objectionable in different jurisdictions: why?  What is the normative foundation you’re shooting for?  If there is a problem—and maybe the problems differ by jurisdiction—what grand normative theory if any can apply?

Calboli: values of free speech are being exported; more attention to racial issues?  Also, because of internationalization something that was offensive in one place might become offensive in other places. (Paper has example of Redskins raspberry candy in Austl.; used to have a caricature of an American Indian on the package, now just the name.) Could this be part of internationalization/drawing from other cases?

Smith: interesting that there’s no provision for disparaging marks separately. 

Hinchcliffe: offending a segment of the community can be sufficient to reject.  PHAT PHUK for a Thai restaurant.  Maybe there’s so much difference in meaning that harmonization is impossible.

LaFrance: why even try for harmonization?  Int’l marketing might require least common denominator; is that a problem.

RT: connection to territoriality.  Graeme Dinwoodie’s work?  Lionel Bently’s current work on internationalization of UK marks to India.  Exceptionalism and exceptionability.  The transmission of meaning across borders and its relationship to attempts to prevent the change of meaning within borders.  Distinctively Australian culture? If we are committed to territoriality, then scandalousness actually fits well within that aspect of a TM system, whose commitments are orthogonal to consumer/producer protection.

Colman: any comparison to unrelated countries like Italy and China?  Is there similarity, and if so why?  (TM with Chinese characteristics?)

LaFrance: are there differences between registration-only and strong common-law systems?  Is one more liberal than the other?  If registration is very important to rights, the system might be more forgiving, while a common-law jurisdiction could say you can still use the mark.

Farley: international obligations: the prohibition on scandalousness is allowed as an exception to the general rule of registrability required by treaties, but compare 6ter which is us all agreeing not to register flags and emblems—it’s not a flexibility.  What’s going on there?  Is there an issue of universality?  Consider also creating categories instead of factors to consider. In the new gTLD program, there was a prohibition on morally offensive gTLDs. That’s a universal norm, so they tried to figure out what a universal, bare-bones standard was: the incitement to or promotion of violence, discrimination, or child pornography—this was categorical. In addition: equally generally accepted identified legal norms. That’s an interesting approach.

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