Friday, October 30, 2015

FDLI symposium: special topics

Special Topics
FDA Regulation of Genomic Testing and the First Amendment
Barbara Evans, Professor, University of Houston Law Center
 
Of companies in clinical sequencing industry: 10 of 68 do sequencing only; 21 of 68 annotation and interpretation only. That is speech only. [Or it’s professional advice and not even protected by Central Hudson, as Robert Post would say.] Question of FDA scope: when there’s bundling of interpretation with device/test, FDA jurisdiction is easy, but what if it’s unbundled and people are merely talking? 
 
Shouldn’t have unintended consequences drive unbundling or drive it offshore.  Regulator’s task: protect consumers without causing these effects.
 
Bad consequences aren’t enough to justify speech regulation: test results that lead people to make stupid medical decisions have to be regulated by regulating medical decisions, not information.  Could require doctor for interpretation; could put warnings/disclaimer on interpretation; develop FDA-recognized list of which claims are proven/legitimate. 
 
State Action in Food and Controlled Substances Regulation and the Benefits of Friction Between Regulatory Authorities
Diana R. H. Winters, Associate Professor, Indiana University School of Law
 
Regulatory flexibility can be vertical or horizontal. Can be productive to fill gaps, address what’s seen as misguided federal policy.  E.g., humane treatment of animal laws in Cal., two of which have been invalidated and are on appeal; Vt. GMO labeling law; concerted AG action to remove allegedly fraudulently labeled dietary supplements from shelves.  Cal. just past a law on animal antibiotics—stricter than federal; not yet challenged.  Movement to decriminalize and regulate marijuana—also brings fed/state interaction into sharp relief.  Challenged & invalidated: ban on sale of foie gras.  Egg/chicken treatment law now under challenge as preempted by Egg Inspection Act & as violating dormant commerce clause.  That case was thrown out for lack of standing by challenger states; on appeal.  We should enjoy and celebrate the mess as it fills gaps and spurs national debates.
 
A First Amendment Exception for Flexible FDA Regulation
Sally Wang, Principal, DocFlight
Market arms race: inefficient to keep spending advertising to keep in the game; costs get passed to payors and consumers.  A lot of blockbusters going off patent: there should be shrinkage but there is almost doubling of marketing spend.  Regulatory void left by FDA has been filled to some extent by DOJ actions—over $13 billion in fines for fraudulent marketing. Less regulation is not beneficial for industry.  Selling drugs is different from selling TVs.  Can use gov’t granted IP rights/monopoly privileges as a way to continue regulation.  IP rights for drugs are closely intertwined w/regulatory process.  Analogy to FCC’s rights because it grants spectrum to broadcasts.
 
Discussant:
Patricia Zettler, Associate Professor, Georgia State University, College of Law
Genomic testing is high interest in Silicon Valley, with concerns about FDA regulations stifling innovation.  Appealing to distinguish between speech about the genomic test itself and speech about what the test reveals (meaning of particular results).
 
Choice of regulators: if the fed gov’t is not regulating, states can regulate medical practice. We have seen docs v. Glocks case in Florida, abortion restrictions—it’s not infeasible that states might regulate. Who do we want doing the regulating?  (Though as with abortion, she points out, guns may be special and therefore not a precedent.)
 
Winters persuasively argues that state-federal friction can be beneficial for food and perhaps controlled substances. But how far does this extend? Many examples are from Cal. & NY, which because of size and politics may be more persuasive to this group than other states’ policy choices.  Can Vt. be as persuasive on the national stage?  Also, is this an actual benefit if GMO status really isn’t that important?
 
Wang’s paper: analogy to FCC and Nat’l Endowment for Arts may be different—obscenity/profanity restrictions v. info on drugs—some claim the info is very valuable for the public health. I worry that courts wouldn’t extend the rationale they’ve used for FCC/NEA to that speech.  Also, consider other areas, such as genomic testing—how far can this extend into other areas where FDA faces First Amendment challenges not so tied to regulatory exclusivity? Maybe the answer is that authorization to market is a gov’t benefit in itself, but wants to know more.
 
Winters: California does tend to drive national policy.  Humane treatment as related to human health: connections b/t factory farming and health, as opposed to standalone concerns about morality—may get more of a patchwork. But we’ll see industry and private actors (like McDonald’s) moving to creating a uniformity not mandated by federal law.  We’ll see convergence/informal agreements.
 
Wang: Art v. IP is an interesting point.  Even profanity could have a benefit, but the gov’t can still regulate it because of its structural position conferring a benefit. Step outside of assumptions and think about it from IP perspective.
 
Moderator: Joseph Page, Professor, Georgetown University Law Center: Consider state right to try laws: statutes giving people with life-threatening diseases access to drugs w/o full FDA approval.  In order for them to be successful, the fed gov’t has to stay its hand, as w/marijuana.  Otherwise all you have is expressive libertarianism: symbolic laws that make another point. It’s one thing for states to fill in the gaps; it’s another for states to encourage violation of federal law.
 
Winters: it fits in the theme b/c it’s a conversation, but agrees it’s different.
 
Zettler: FDA does allow compassionate use, so you could comply with both treatment regs and right to try laws, though the laws are intended to circumvent FDA rules.  But not as direct a conflict.
 
Winters: Controlled Substances Act has mostly been enforced by states; states are refusing to take action, but historically they were the ones who locked people up for drugs.  So that’s another difference.
 
Q: gov’t property allocation doesn’t mean there are no 1A rights.
 
Wang: there has to be a relationship to the gov’t program. It’s not a direct mapping, but a looser analogy.

FDLI symposium: John Coates keynote on deconstitutionalizing corporate speech

John Coates, John F. Cogan, Jr. Professor of Law and Economics, Research Director, Center on the Legal Profession, Harvard Law School: Re-de-constitutionalizing Corporate & Commercial Speech
 
What I see as a mess in my space is even more of a mess in your space.  Struck by practitioners who were candid about some of the directions—ways in which industry is very deliberately using 1A attacks to unsettle regulation across the board.  Another perspective w/in many large companies that don’t view what’s going on with total happiness, though they like particular wins. Undoing entire regulatory space will not make some big companies happy.
 
1978: Bellotti/Central Hudson: that was first non-expressive business victory under 1A; emerged very late.  US was dominant economic power by 1900.  Business & corporations didn’t need the constitution to achieve world economic dominance, despite the existence of extensive regulation of corporate speech.  Pre-founding, we had contract law (silence = assent); commercial law—assignability of notes; tort law (fraud, silence); agency law (apparent authority); waiver, estoppel (liability from speech); antitrust in common law (price-fixing); corporate law (charter limits on purposes).  Pre-1931: Sherman Act (speech about prices); Pure Food and Drug Act; state blue sky securities laws; professional licensing laws.  Pre-1952: Securities laws; FDCA; Wheeler-Lea Act; pre 1976: Drug Industry Act; Truth in Lending Act; state consumer protection laws.
 
Business involvement in 1A SCt cases.  First none, then low level of activity (media); then giant increase, then stabilized in SCt at about 1/2.  Due to Powell, who was corporate lawyer before he went to SCt/technical and strategic genius in thinking about clients’ interest.  Memo to Chamber of Commerce, 1972: lays out his plan. “Under our const’l system … the judiciary may be the most important instrucment for social, economic and policital change.” Didn’t have this memo when they confirmed Powell.  At odds w/standard conservative fictions about judiciary.  Business 1A cases ramp up when he’s on SCt.
 
Businesses get much higher win rates in cases.  Appeals court citations to Central Hudson keep increasing.  Different citation pattern than for Mapp v. Ohio or Roe v. Wade.  What drives this: people who want to disrupt existing regulatory system to get advantage. Massive amounts of capital are ready for any company w/a strategy to exploit the 1A for purposes not w/in contemplation of Founders or those in 1900 etc.  Among other cases, consider Safelite Group (2d Cir. 2014)—remarkable factfinding about what’s important to consumers as a way of avoiding Zauderer and using the incredibly malleable “fit” requirement of Central Hudson.  Invites judicial discretion to be abused. Asking for what we’ve got on DC Circuit, which is a lottery. 
 
Brilliant strategy: no fit b/c we can find some other sugary drinks you’re not imposing labeling on.  Requires regulation to be much tougher to survive scrutiny, which is not generally something businesses would like if the regulation is adopted.
 
Rent-seeking: stealing/deceiving consumers is rent-seeking, a form of cost that could be better spent on productive uses.  SCt has essentially said that preventing rent-seeking isn’t a compelling purpose for 1A principles, in IMS v. Sorrell, preventing economic regulation that enhances social welfare.  In other cases, anti-rent-seeking becomes justification for applying stricter scrutiny: in Safelite, court says “we don’t believe what was articulated as justification; this was essentially protection for established industry, so we’re going to apply Central Hudson.”  This is worse than ordinary rent seeking b/c it unsettles old policy, delays convergence on new policy. What’s the current law on off label promotion?  No one knows.  Suppresses resolution of difficult policy tradeoffs. Can’t undo constitutional law through Congress or rewrite statute through FDA—impose burdens on polity that we’re not up for.  Forces greater restrictions on liberty to justify lesser. 
 
For business: Encourages investment in litigation and deception.  Discourages R&D, reinforced by uncertainty.  Given scarcity of time, dilutes strategic focus: C-suite can only focus on one or two things at once.  Simple strategy is required. Distorts careers in business.  For society: more rent seeking = more corruption = less investment = lower growth.
 
Legal options: Constitutional amendments?  Convention?  What about the current constitution?  Courts should ok anti-rent seeking as a compelling interest for legislative and regulatory action. Defer to judgments, contra Safelite, of those bodies where there’s a risk how it should be regulated.  Recognize that court-generated rentseeking is a bad consequence of constitutional method.  Reverse unworkable precedents that didn’t allow anti-rent-seeking moves by gov’t, such as Bellotti, Central Hudson, Citizens United, and IMS Health, all of which reversed previous precedents. 
 
In securities regulation, the DC Circuit judges have no capacity to evaluate the output of the Federal Reserve Board—they don’t know how to evaluate a change in the capital reserve rule.  The drug industry seems similar.  The idea of relying on drug companies to help us—that’s not good enough.  Corporations have no souls to damn/moral claims on free speech.  Citizens United should be decided as it was for the nonprofit, but that’s b/c members of the nonprofit all have the same interests in forming the nonprofit.  Contrast to Chevron: almost everyone in this room is part owner of Chevron.  Chevron is speaking on our behalf?  We have no ability to discover or respond to that speech.  The corporate structure is not one in which individuals’ speech interests are typically well represented or vindicated.  Caronia: salesperson isn’t speaking out of his own individual interest, but to get paid by his company. 
 
Current trend: Capitalism will completely prevent established companies from doing business as usual. They will have to invest in destroying regulation too or they will go bankrupt.
 
RT: is there any room for judicial factfinding? What if we think the agency is captured?
 
A: the answer to that we had for the first few hundred years of the republic is political action. Go to legislature, lobby for change.  There will be pockets that survive for a long time with rentseeking in place.  The uncertainty created now deters investment across the board, and creates rent-seeking opportunities of its own.
 
It’s a cross-regulatory problem. My solution requires a change in the composition of the bench, or a revelation for those on the bench now.  In the meantime, you have a big problem, but a bunch of people share it.  Agency task forces exist to deal w/the constitution everywhere—could try to coordinate strategies/share intelligence. The FTC’s problem in the Second Circuit will become the FDA’s problem. 
 
If federal laws fall because of the constitution, haphazardly, then all the states get to come in, b/c there will be no more preemption. If you don’t want tort litigation in every state, if regulation enhances your ability to sell things effectively—FDA’s success is totally coincident with pharma’s success—then you should be dramatically worried with return to state level, w/uneven and sometimes very strict regulation.
 
Q: other areas of 1A are different from off-label uses.  Can be used very paternalistically to block people’s access to genetic information.
 
A: we already do distinguish between levels of scrutiny depending on the type of speech. I’d be happy to give robust protection to individuals. But when business interests capture your data, they have a lot more money to litigate.  1978 was a robust time for individual speech. 
 
Q: but regulations can restrict ability of clinical labs to communicate information to individuals—to deliver results to a patient who wants to hear them.  Regulator says no.
 
A: consumer protection requires difficult tradeoffs, and courts using the 1A won’t do it well. There are real interests at stake in getting some of this info.  But those same organizations also by design have interests in exploiting the ordinary person’s inability to understand this information without an intermediary.  Another natural outcome of where we’re going: patch holes at federal level by starting to regulate doctors, and we’re already starting to do that with health care costs/payors. If individuals on the ground don’t pay attention, will find themselves victims of unintended consequences.
 
Q: my daughter had a rare disease for which all the treatments are off label and off patent, but nobody can talk about it.  A lot of people don’t have the ability to find that truthful information.  It’s unconstitutional to keep away truthful information about the standard of care.  Medical standard for drug induced abortions is different from what FDA has indicated. To prevent people from learning about information from the source.
 
A: I’m sorry for your family’s suffering. Others will suffer if the 1A results in a radical cutback of regulation.
 
Q: we’re talking about truthful.
 
A: no, we’re talking about truthful in the eye of one particular regulator after the fact.  To enforce the law, the agency has to bring cases.  If they don’t then there will be people who aren’t deterred.  Nobody reading Caronia could think that the statement at issue was truthful (this is a very safe drug = 300 people had died).  These are hard decisions. The question is who should decide. You don’t like how the FDA does it. That’s cool.  But I don’t want the courts to rewrite drug policy. That’s the wrong mechanism and the wrong branch.

FDLI symposium part 2: First Amendment/Commercial Speech

Session 2: Constraints on Commercial Speech and the First Amendment
 
Moderator: Richard Cleland, Assistant Director, Federal Trade Commission, Bureau of Consumer Protection
 
Tracing the FTC’s Line Between Advertising and Free Speech
Katie Bond, Senior Associate, Kelley Drye
 
FTC can only go after commercial speech.  A person who works for a company that makes super-organic kale chips.  Talking on NPR about healthy lunches for schools; health benefits of kale.  A person who works at a company that makes lacrosse helmets; takes to Twitter after seeing a story they think grossly mischaracterizes the concussion-preventing technology.  Commercial speech?  Current FTC approach seems to say yes and yes, which is concerning.
 
Law on commercial speech: Three main principles: (1) Va. Bd. of Pharm.: drug price advertising; didn’t need definition, but said in passing that it is speech that merely proposes a commercial transaction.  (2) Then you started to see advertorial-type publications.  Egg trade group published editorials on eggs and heart disease.  Seventh Circuit: science was a matter of public debate; but yes, it proposes a commercial transaction at its core, even if it touches on a matter of public debate.  (3) SCt looks at protected speech + commercial speech, but not voluntary mixing—state regulation of charitable fundraisers that required disclosure from professional fundraisers.  Inextricably intertwined: can’t regulate as commercial speech.
 
FTC v. POM: FTC didn’t address inextricably intertwined.  They’ve taken action against situations similar to the hypos. Went after a company selling green coffee diet products, with lots of websites/ads, but also an appearance by company owner on Dr. Oz show.  Didn’t get inextricably intertwined standard coming in.  Proposed a commercial transaction, but didn’t address whether that was inextricably intertwined.  By contrast: journalist’s editorial questions about Uber & responses that journalist decided to print are inextricably intertwined, so it’s fully protected speech. Companies and company employees have a right to comment in matters of public debate, but the forum in which they can do so may be shrinking given FTC guidance—media/social media.  Could be a person who works for a food company, talking about nutrition; employee of gunmaker who wants to be part of debate on gun violence; ob-gyn who provides abortions but wants to be part of the debate. Would they still participate if they thought their spontaneous comments would be treated like commercial speech?
 
Rebecca Tushnet, Professor, Georgetown University Law Center
 
First note: abortion is different. The reason ob-gyns don’t talk on camera is (1) death threats, and (2) regular 1A doesn’t apply even to their noncommercial speech; maybe more protection for them, both physically and in 1A terms, is the one thing that we can agree on.
 
When discussing commercial speech, I like to discuss the Stevens concurrence in Central Hudson: Justice Stevens proposed a functional definition.  When protecting the consumer transaction, gov’t has very wide scope for action; when regulating speech to achieve some other objective, like decreasing violence, it must satisfy stringent standards.  So the answer to whether many of these scenarios are commercial speech is properly: it depends on what the gov’t is trying to regulate. If it’s trying to decrease the amount of shoe shopping by limiting how many shoe ads can run, no.  If it’s trying to decrease consumer deception in the market for shoes, then the answer is yes. 
 
Speech standards are not just a one way ratchet, though it looks like now.  Speech that isn’t even commercial speech: warranties, contracts, tort liability for failure to disclose.  If you expand the 1A too broadly, you get problems.
 
Speech proposing a commercial transaction: far too narrow, as Court itself has recognized.  Reason to believe and buy = enough even if there’s no offer that can be completed by acceptance.  Not just point of sale. California Supreme Court’s context-based definition in Nike v. Kasky has some useful features: Because the messages in question were directed by a commercial speaker to a commercial audience, and because they made representations of fact about the speaker’s own business operations for the purpose of promoting sales of its products, we conclude that these messages are commercial speech for purposes of applying state laws barring false and misleading commercial messages. 
 
Very few of the paper’s examples, if any, involve  commercial speech inextricable from political or fully protected speech.  No law of man or nature requires you to discuss homemaking with selling plastic bins—that’s the SUNY v. Fox case—and equally true that no law of man or nature requires you to pitch drugs on morning news shows, which is in general fully protected speech.  The Supreme Court made a special rule for charities, and that’s understandable because they have to ask for money to be charities—a better way to say it is that asking for money isn’t always proposing a commercial transaction, as we know from political situations.  The inextricably intertwined argument is not a good fit for profit-seeking companies that sell goods and services.
 
Why worry: Consumers frequently treat advertising as less credible than editorial content.  Social proof—people think that a claim is more credible because it comes from another person or people like them.  This is why promoters say that word of mouth is the best way to sell—when advertisers themselves believe that, maybe we should believe them.
 
Newswashing: if you can make your commercial speech noncommercial by finding a friendly person to repeat it—in return for free stuff, even—then that’s how many products will be sold.  Video news releases: produced by companies, often provided to news stations with space so that the station’s own reporter can introduce the segment.  False claims in such presentations can do more damage because the consumer doesn’t know that they are being sold to as opposed to informed.  Also potential for unfairness/anticompetitiveness if endorsements are allowed without disclosure because only some businesses have the ability to get this kind of apparently unsolicited coverage.
 
Consider an FTC action not mentioned in the paper, but worth discussing:
Consumers who tuned in to programs like the Today Show, Daybreak USA, and local newscasts may have caught interviews with guests billed as “The Safety Mom,” a home security expert, or a tech expert.  Among the products they reviewed was ADT’s Pulse Home Monitoring System.  Describing it as “amazing” or “incredible,” they offered glowing details about its capabilities, safety benefits, and cost.  ADT had paid the three spokespersons a total of more than $300,000 and provided two of them with free systems valued at $4,000 (not to mention free monthly monitoring) to tout the ADT Pulse Home Monitoring System.   [clip!]   This is an ad.
 
Especially since the FTC’s baseline here is just disclosure when the consumer might find the connection with the advertiser to be material, I think that’s the minimum necessary constraint.  As for knowing when disclosure is required on social media and similar areas, I don’t think it’s actually that difficult.  The FTC’s standard is: when the connection would be material to consumers.  There’s a tendency among anti-regulatory types to treat consumers like incredibly savvy lawyers who scrutinize every claim carefully or discount it heavily, but then to treat the new wave of social media endorsers as fragile and easily confused.  But—at least when the endorsers aren’t savvy as the Kardashians—they’re often just like the other people in their social circles—they find some things intuitive and some things confusing; they’re neither robots nor children.  “I got this for free,” for me, falls on the intuitive side of a statement required by regulation.
 
In terms of chilling effect, I’m unconvinced that having to tell your endorsers to disclose their connections and having to possess substantiation for factual claims causes a chill worth caring about.  This is, after all, the standard that must already be followed in conventional advertising, so if the advertiser wants to use a different method to make claims, it has to bring those standards with it to the new advertising method.  If that’s costly given the nature of the new method, that’s a cost the advertiser simply must weigh.  After all, the flip side of the argument is this: if the First Amendment requires us to allow a person to make unsubstantiated or even untrue factual claims to tout her employer’s product because she’s speaking on social media, why doesn’t it also require us to allow those same claims in a paid ad?  Does it require us to continue to allow her claims when the post goes viral and 100,000 people see it?  Or: If a person belongs to a multilevel marketing scheme and pitches her friends and family to buy from her, should we not call that commercial speech because it’s individualized? 
 
Call for ever-more-elaborate standards to deal with ever more intricate scenarios invites gaming and evasion; FTC FAQs seem pretty sensible to me, covering common situations and trying to teach advertisers how to think about the next situation that pops up.  There might be room for more FAQs as we go on, but the basic approach is sound.
 
Bond: there is room to do both—loosen up and allow legitimate public debate and go after fraudsters hawking wares through Dr. Oz.
 
The Promotion of Medical Products in the 21st Century
R. Alta Charo, Warren P. Knowles Professor of Law & Bioethics School of Law, and Dept of Medical History & Bioethics, University of Wisconsin
 
A long history of flimflam that did harm.  Overpromising of remedies, sometimes to the detriment of other things that might have worked better. Sexuality, obesity, bowel movements; many of the patent medicines contained cocaine, heroin, or alcohol, so you felt better but didn’t get better. Some were genuinely dangerous; “snake oil” really did exist.  That is still with us.  Dietary supplement industry: homeopathy, constipation remedy that’s 40% alcohol: problem for alcoholics, teens—not something you necessarily check for on the label.
 
Fraud: had to prove intent; hard to get a handle on things before people were injured. 100s of deaths from “elixir of sulfanilamide”—because victims were children and because this was at the time of the rise of the regulatory state, had to at least prove safety (which is a relative issue: safe for what?).  Still fraud-based; there’s an implicit representation that a product is fit for purpose, and if it’s unsafe that’s misbranding. 
 
Thalidomide: prescribed offlabel during pregnancy.  US was the only one w/o this scourge b/c Frances Kelsey, FDA, didn’t feel that the safety data were sufficient.  For a long time, she was celebrated for this—led to a cautious approach, demanding high levels of proof for clinical trials. We prided ourselves on not being fast and careless. We now have a whiplash problem: FDA told that it’s alternately going too slow or too fast.  Laetrile for cancer; HIV treatments for HIV.  Now there are unexpected problems in postmarket period: nonsteroidal anti-inflammatories like Vioxx or diabetes/Avandia; now we’ve forgotten about those and demanded more speed. This is a repeated pattern. Reactive to latest tragedy; frustrating but real.
 
Against this backdrop, offlabel promotion: we’ve watched expansion of protections for commercial speech and corporate speech in other contexts.  Now companies can take advantage of safe harbors; respond to questions; distribute reprints (including with risk assessments that differ from FDA’s).  Previously: had to prove to independent arbitrator, FDA, that risk/benefit profile was sufficient to justify approval before you could promote the drug for that purpose.  Otherwise, could be used but not promoted.  Burden of proof problem.
 
Which brings us to Amarin: Amarin had a statement that was really a nonstatement: truthiness: supportive but not conclusive research shows that consumption may reduce the risk of heart disease. How could that statement be falsified?  Its only purpose is to suggest reduction in heart disease even though the evidence before the FDA suggested the opposite—that there was no reduction. They do that to get doctors to prescribe offlabel. That’s a statement about intended use.  Even if there’s a single study, that doesn’t take account of the other studies that show the opposite.  That’s a misleading omission.

What will be the incentive for anyone to prove safeness & effectiveness for secondary/tertiary uses? You take away the economic theory behind the way we regulate drugs to encourage research.  There’s no logical stopping point: we might end up with postmarket remedies only/even a requirement of intent to deceive. 
 
Subtle genetic/environmental components to disease are now being targeted; any component could be targeted by promotion but could still be highly misleading. It’s time to contextualize 1A against public health consequences of abandoning what worked well since Kelsey saved us from limbless children.
 
Discussant: Coleen Klasmeier, Partner, Sidley Austin
Shift of responsibility from FDA to courts seems to be ongoing; paper argues that this will result in less use of evidence & corresponding negative impacts on public health.  How confident are we that clinical decisions are in fact currently based on the evidence that’s permitted by FDA? The way that clinical decisions occur isn’t the way the reg scheme seems to assume. Doctors don’t look at the FDA approved labeling and make decision; much messier, heterogeneous sources.  A lot of those sources are based on standards of evidence that probably wouldn’t pass muster if FDA were to evaluate them. What’s our level of confidence/certainty that current decisions are effective?
 
How confident can we be that outcomes have improved in the years since FDA/DOJ began aggressively policing drug & medical device information?  There was a period in the 1990s of more aggressive interpretation of statutory authority; less comprehensive in 1980s.  Continuing education moves in 1990s were more ambitious: are we better off?  Given how ubiquitous information is, does it even make sense to look back at horse and buggy days?  [Um, given that vaccination levels are dropping to lows not seen in decades, I’ll go with yes.]  Of course we shouldn’t make important policy decisions in a vacuum, but is that the right context to inform the policy decision?  We have extensive provisions for mandatory posting of certain details on clinicaltrials.gov; lots of transparency mandates that are self- or government-enforced.  Companies have to reveal their clinical data pretty quickly.  [But if the 1A applies fully, that won’t be true.] Patients and payors also require real-time data; old-school assumption that info will be scrubbed and censored by the gov’t. Old-fashioned to say that some sources of information are allowed and others aren’t. Sorrell: that speaker discrimination isn’t ok under current law.  Public discussion carries a responsibility to be authentic: a fuzzy concept: better have your facts straight.  Gov’t shouldn’t need to preapprove.
 
“FDA doesn’t regulate practice of medicine”: no longer true b/c of expanded drug safety authority, as well as growth hormone and device authority.  Pretty clear that FDA has a big legal problem on its hands b/c off-label use is legal.  If the gov’t continues to permit the conduct, then how can you ban the speech about that conduct? Doesn’t make sense, amounts to a constitutional pathology. 
 
Historical article doesn’t wrestle with constitutional issues—courts are supposed to wrestle with constitutional issues.  Even in Caronia and Amarin, gov’t conceded that the statements were truthful and nonmisleading (though that may not have been true in Caronia)—if true, the case law would be hard to wrestle with.  Mature regulatory scheme is on collision course with 1A, and the gov’t is not winning.
 
Options available to the gov’t: should talk about which option we will use.  What will we do next? Rather than saying we should maintain the status quo.
 
Charo: How confident we are that doctors use FDA info? As a matter of policy, the fact they’re using info of varying levels of quality doesn’t mean we should eliminate the best quality info.  How confident about health claims?  Well, compare health supplement industry—a variety of things that are useless or affirmatively harmful—and now we’re talking about going down to that standard for pharmaceuticals! 
 
Are we going to require each doctor to be academic reviewer, looking for methodologies, hidden conflicts of interest, etc.?  That would further destroy the practice of information. Nothing stops people from getting realtime information. We want one really credible, independently verified source of info, so people aren’t always trying to evaluate the speaker and the source for chemo drugs. 
 
At the center: what is it that constitutes misleading? That’s a huge gray zone. That nonstatement is viewed as nonmisleading b/c it’s so empty. But the court in Amarin tried to rewrite the FDA’s own language.  The FDA wanted to say “the available evidence doesn’t show …” the court said that you couldn’t say that b/c it implied that the evidence showed otherwise. Forces you to rely on the court’s view of the evidence—costly as well as wrong.  That worries me. [Me too!  Innumeracy is a huge problem in courts, including In re Pearson.]
 
Cleland: Should Amarin finish its trial, if these claims are currently blessed by the court? What if the trial comes out badly?
 
Klasmeier: Amarin affirmed that it was continuing on with the study. Broader question of incentives in view of entitlement to make qualified claims: this concern that research endeavor will be gutted is overblown; there are lots of reasons other than regulatory approval to do these studies. Payors drive clinical decisions and payors want data. There’s also value in demonstrating to regulator your entitlement to make a claim.  [Ah, but which regulator? The court or the FDA?]  These cases should be troubling to people who care about FDA regulation, but they don’t represent what the established players are doing.  [Neither did the dietary supplement industry; neither did Google represent what newspapers were doing.]  They want the FDA to remain relevant.
 
Cleland: I’m not sure the battle will be decided by the core of the industry. The outliers will want to drive stakes into the heart of the regulation.
 
Klasmeier: that may be. But you’ll always have that challenge no matter what improvements you make. [Unless you uphold the scheme.] Would rather try to improve 1A and 5A treatment [5A!] by FDA.
 
Charo: Hope you’re right, but we already are seeing disturbing indications in light of the fact that most research isn’t definitive for a long time. Worlds of opportunities for selective reporting.  Genetic testing: tried to market tests for indications that were absolutely not proven, but claimed to be relevant to clinical outcome.  Tempted to use incomplete indicators; as long as someone can say there’s one study that says the product might be useful, we’ll have this promotion problem and consumers/drs are not in a good position to evaluate that.
 
Cleland: Postmarket surveillance as an option?
 
Klasmeier: one of the options, but not the core industry’s choice.  Industry position is docketed w/FDA. More finely reticulated regulatory scheme, more responsive to different stakeholders, w/central role for FDA.  Nobody that I know is talking about taking FDA approved labeling out of the mix of info available to doctors.  We’re talking about data from Phase III clinical studies of a new use of an oncology drug, where FDA hasn’t yet received the supplemental application but the data results are published; or where NIH does a study of every atypical antipsychotic.
 
Charo: but those can already be distributed.
 
Klasmeier: you’re lumping everything into the category of offlabel marketing, though the FDA does distinguish offlabel promotion from permissible information of offlabel info.  Standards aren’t clear enough about whether your speeck is on the OK side of the line. The Justice Dep’t is also running around with FDCA theories of liability that don’t always accord with what FDA says.  E.g., FDA just proposed a rule saying that knowledge of offlabel use isn’t enough, but Justice is prosecuting someone right now on that theory.  Together, a huge incentive for self-censor. A ton of thoughtfully presented information w/robust data sources, sometimes important to reinforce FDA labeling, not getting out there.  We’re not talking about flimflam.
 
Q: offlabel marketing to doctors/consumers.  Even more problematic to market to consumers?  Dr serves as intermediary but marketing to consumers still has effect.
 
Charo: The rules are different b/c of the absence of dr as intermediary.  Another avenue of analysis. Consumer isn’t even arguably in position to act as arbiter.  There is a real distinction in how ads to consumers are done.   We do know DTC ads work to get consumers to ask, and the structure of medical services means that doctors, given a choice of what patient wants and what doctor might have prescribed, is likely to say “sure.”
 
Klasmeier: TV ads are very responsible—tell you to contact your doctor. Harnessed by the FDA as additional information source to patients.  Celebrex: when it came back after the COX-2 scandal, the DTC ad was 2 minutes long, full of contextual claims. That product still does some people good.
 
Q: would it be legally defensible to have a listener based restriction?  Amarin: P said it was going to doctor w/its message.
 
Klasmeier: wouldn’t be defensible to go to consumers. Industry recognizes that “it’s just different” practically and politically if not legally. I’m personally uncomfortable with that distinction.  Anyone who has a kid knows they have to be a savvy consumer.  Doesn’t feel right that I can’t get all the information.  [Lochner! Smart people will do well, sorry about the rest of you.]
 
Charo: Doctor adds a safety factors to otherwise dangerous drugs.
 
RT: Strict/heightened scrutiny is not “is this good policy.”  That is one reason why the core industry will not set the rules if we get Sorrell.  It is very difficult to imagine how the Amarin standard would allow restrictions on DTC to stand.
 
Klasmeier: No one’s talking about Lochnerizing the First Amendment.  [Other than some of the panelists on panel 1, but ok.]

FDLI symposium on constitutional challenges to FDA

FDLI Symposium: Constitutional Challenges to FDA Law & Regulation
 
Session 1:  Compelled Speech
Moderator: Allison Zieve, Director, Public Citizen Litigation Group, Vice-Chair, FDLI
 
First Amendment Limits on Compulsory Labeling
Nigel Barrella, Sole Practitioner, Washington DC
 
Review of commercial speech doctrine. Product labels are commercial: propose a transaction.  Other FDA “labeling”?  Labeling not sold direct to consumers, such as Rx drugs, vaccines?  Package inserts?  Medical literature? (Caronia, Amarin case finding that it was unconstitutional to regulate off-label promotion by the manufacturer.) 
 
DC Circuit’s rejection of tobacco images trying to promote an emotional response; 6th Circuit pointed out that facts can provoke emotions, but that doesn’t make them opinions.
 
Ongoing dispute: what does “uncontroversial” mean?  At a minimum, controversial can’t mean that someone was willing to sue.
 
Ongoing cases: genetic engineering compulsory labeling for foods; on appeal in 2d Cir.  Argument: topic is simply too controversial for labeling. Vt. says the test is whether the disclosure is factual, not opinion-based, not reasonably disputable.  Abortion regulations provide precedent for saying that extremely controversial subject matter can’t be subject to labeling, no matter how true it is.  If that’s the test, though, then tobacco labeling shouldn’t have been allowed; total fat etc. labeling shouldn’t be allowed.
 
Some cases suggest you can’t tell consumers what to do: “try to quit smoking.”  But what about “Surgeon General’s Warning”?  What about “This statement hasn’t been evaluated by the FDA”?
 
Future of Zauderer: uncontroversial seems to be gravitating to being fact-based; can’t tell consumers what to do but can provide them with consensus.  Substantial interest in things other than preventing deception as justification for disclosure?
 
Discussant: Bert Rein, Founding Partner, Wiley Rein
 
Zauderer: easy cases make bad law.  Deceptive by omission. If the alternatives are ban or cure with disclosure, disclosure is what makes sense.  Listerine remedy case: disclosure that it doesn’t kill germs corrects the falsehood you’ve been disseminating. 
 
Safety warnings: state’s interest is truth in market/health and safety of consumers. That’s a reasonable interest, and the temptation is to say “why not”?  Why not poison, electrical hazard, flammability warning—state has a compelling interest no matter what standard you apply.  [Hunh?  Why isn’t public education a less restrictive alternative?]  But you can’t use that foundation of health, safety, fairness to go beyond and start expressing opinions.   Also important to have standardized ways of defining terms, like “gallons” or the names of foods—fairness/fair choice is an important interest.  Another interest: state using compelled speech to carry out a regulatory regime.  Labeling on OTC drugs—comprehensive responsibility to take care of health and safety in drugs.  Regulatory interest can be very important, and as part of that it may need to regulate labeling.  That is a generally recognized legit interest, but what is the limit on that?  44 Liquormart and compounding cases: you can use speech regulation as part of a regulatory regime, but only as a last resort.  Is this essential/can’t be done another way?  Is it a reasonable advancement of the interest the gov’t is serving?
 
The AMI case is therefore wrong.  There is no general regime governing safety [of meat?].  Same with SEC disclosure of conflict minerals—no relation to the overall regime.  [What counts as a general regime?]  Parsing the conflict minerals disclosure is itself very difficult.
 
Suppose the gov’t was worried that people were ignoring Christmas.  Could the gov’t require all food sold in November to say “remember Xmas is coming on Dec. 25th”?  [No, because of the Establishment Clause, not b/c of a general restriction on gov’t position-taking.]  That’s inconsistent w/1st Amendment b/c inconsistent of your right to determine what you want to say, though it’s truthful and beyond dispute (unless you are Greek Orthodox).  [Wow, where to start.  Okay: let me just say that the “you” is an important issue here.  Does the commercial speaker have interests of its own, or just interests in informing consumers?]  Gov’t shouldn’t instruct people what to buy.  State has no legit interest in telling you (food seller) to put that message on food.  If the state can require GMO disclosure, then it can also require you to disclose that there’s no benefit to GM-free food that’s been shown.  [Yes, I believe that’s the teaching of the modern understanding post-Lochner: the legislature in general gets to make these calls.  I’m not clear on why that’s the troublesome outcome of the slippery slope.]
 
Authors: You Want a Warning with That? Sugar-Sweetened Beverage Warnings and the Constitution
Sabrina Adler, ChangeLab Solutions, Oakland, CA (co-authored)
 
Increase in obesity; 135% increase in calorie intake from sugar-sweetened beverage, half of Americans over age 2 drink at least one a day. 63% of HS students.  Connection between liquid sugar consumption and greater health problems v. solid food.  Safety warning issues?  First Amendment, preemption under NLEA, and dormant commerce clause.
 
Paper argues that the science justifies special treatment for SSBs, and thus that warnings should be analyzed under Zauderer.  Current agreement under courts of appeals: Zauderer is not limited to the potential for consumer deception, but can extend to the protection of public health.  Even if substantial interest is required, health is such an interest.  No disclosure has ever been struck down under Zauderer.
 
However, the evidence that labels decrease consumption (much less improve health outcomes) is weaker than the evidence that labels increase awareness of the risk.  Would be at risk if strict scrutiny were applied; there are less restrictive means of conveying the info such as public education.  (Or we could, you know, ban SSBs without running afoul of the First Amendment.)  What about the possibility of gov’t speech?  Forcing message on someone else’s label—boundaries have not been spelled out, but most proposed labels do attribute message to the gov’t.
 
NLEA has express preemption, no implied preemption.  No definition of what constitutes “nutrition labeling.”  They argue that it should mean the quantitative info required on the label, not qualitative info.  Thus shouldn’t be preempted by nutrition labeling.  Nutrient claim/Health claim: relationship between ingredient and health conditions. This is technically what an SSB warning would do. But we argue that “claims” refers to positive statements made by producers to increase sales—that was what Congress was concern about.  Regs specify a list of permissible health claims, and they’re all positive.  Safety warning exception to preemption?  Lactose (not a warning); BPA in baby bottles (FDA specifically exempted from labeling regulation, and thus warning exception couldn’t apply); coloring in colas that California added to Prop. 65/potential carcinogen list (FDA specifically found it to be GRAS/generally recognized it as safe—court found that unrelated to labeling, but predicate to labeling; thus this type of warning shouldn’t be preempted and was subject to safety warning exception to preemption).
 
Stuart Pape, Shareholder, Polsinelli
First Amendment never came up in the 1970s at the FDA—pre Virginia Pharmacy.  Doesn’t envy the task now.  How do you make sense out of current doctrine combined with regulations that have been around for decades?  How do you advise a client? The principles aren’t clear enough.
 
If SSB warning has to be on 20% of billboard/other ads, how does that work?  It’s not scientifically apparent that two products—12 oz. of 100% organic apple juice, which SF favors b/c it’s not regulated, and equivalent amount of cola, which does get regulated—are different; the apple juice even has more calories. So how does the city conclude there’s clear evidence that one product should get a warning and the other shouldn’t?  That is part of what makes the warning constitutional.  FDA is currently considering an “added sugars” line on the nutrition panel, and establish a daily reference value.  But the evidence to support that is weak/unscientifically justified, according to past FDA heads. If there’s serious controversy over mere disclosure of amount/reference point that’s subject to the warning, the warning itself is controversial—singles out one type of beverage and forces them to say “this is a bad product.”
 
Court rejected disclosure about radiation from cellphones for similar reasons. 
 
Also hard to demonstrate substantial interest b/c you require warnings for some things/not other things (the apple juice)—swiss cheese approach makes it harder to defend.  Also, it’s just an opinion: we have to do something about obesity; the scientific evidence about health f/x is compelling (he thinks both of these are opinions).
 
Discussion among panelists: anti-regulationists say alcohol label may be ok b/c of the scientific evidence that it is really bad, not like other things, which is an interesting thing to be assessing under First Amendment standards.
 
Pape: Amarin case: the court observes that the entire premarket approval system for pharma is at risk under current standards. While pharma industry would like more freedom to communicate w/doctors, they’re not looking to have a system in which pharma reg is more like dietary supplement reg, which is a free for all. Bears watching.  (Careful what you wish for?  The First Amendment doesn’t enact Mr. Herbert Spencer’s Social Statics, and neither does it enact Bayer’s wishlist.  Welcome to your new competitor, GNC.)
 
Zieve: Congress, in response to health tragedies, organized the regulatory structure: illegal until approved, and then approved only for conditions it’s safe and effective for according to FDA. FDA doesn’t regulate the practice of medicine; FDA’s authority is only over manufacturers. If you promote it for an unapproved use, that’s illegal.
 
Rein: asymmetry: unlawful to tout, but lawful to use—that doesn’t work.
 
Zieve: but the doctor isn’t engaging in off-label promotion.
 
Rein: what bothered ct in Amarin was that the manufacturer was disseminating information based on well-controlled studies. If studies had been done by independent third parties, would have been able to disseminate them.  May have promotional effect, but is scientific speech. Disparity of regulation/intervention.  Nike v. Kasky: the same asymmetry.  [No, a different one.]  Kasky is regulated only by defamation standard when he says Nike uses child labor; Nike’s speech is commercial when it denies it does.
 
Zieve: In your remarks before you mentioned a valid warning as integral to regulatory process—so did you actually mean that?  Vt. did a study showing 90% of consumers wanted to know whether the food they bought had GMO ingredients—would that matter?
 
Barrella: the whole reason that we extended protection to commercial speech was consumers’ interest in getting truthful information.  DC Circuit en banc did say that consumer interest was substantial interest in itself for country of origin information.
 
Rein: overwhelming support is poor indicator of constitutionality; NH residents “overwhelmingly supported” putting “Live Free or Die” on license plates.
 
Zieve: Facts/opinion?
 
Adler: commercial speech also makes a difference from Live Free or Die.
 
Q: What about the standards of identity?  Hampton Creek’s “Just Mayo”—barred on standards of identity, which is integral to a regulatory process, but what’s the compelling interest in saying you can’t label your product “Just Mayo” just because it isn’t mayo according to the standards of identity. 
 
Barrella: it’s a Central Hudson question. 
 
Zieve: this is false and deceptive advertising. People think mayo means a certain thing; it’s like calling Coke orange juice.  Standard of identity makes the deception stronger, but calling it just mayo divorces “mayonnaise” from its meaning.
 
Pape: maybe historically people knew what mayo was; standard of identity developed b/c producers were making things that people had once made at home. Congress wanted consumer to be able to go to store and pick up what he/she would have previously made in the kitchen. The standards of identity are definitions.  “Cheese food.”  It’s not cheese.  Signal that it’s not cheese. Same thing with mayo. There is something called “mayonnaise dressing”: like mayo, but not.  Interesting to consider whether standards of identity are now vulnerable to the First Amendment.  [Yeah, interesting’s one word.]
 
Q: soy milk = milk?  Industry was laughed out—why isn’t this the same question?  Soy milk has an ingredient list.
 
Zieve: why would you read the ingredient list?  Soy milk isn’t called “just milk.”
 
Rein: State puts up these markers to provide a basis for comparison in the marketplace. It’s meaningless unless it’s enforced. If std of identity for mayo is legit exercise of gov’t power, enforcement is ancillary to that fundamental Q.
 
Q: where in the First Amendment analysis do we deal with false/misleading speech, trademark, Lanham Act?
 
Barrella: that’s just outside the First Amendment.
 
Adler: there may be affirmative misrepresentations in our areas, but we’re more worried here about a lack of information.  Slightly different issue.
 
Rien: Zauderer is a case of fraud by omission.
 
Zieve: Also consider influence of POM v. FTC, where DC Circuit said that a 2 clinical trial standard was too onerous.  Pom says that if it has one study, it can make those claims, even if other studies show no effect. Can drug companies take advantage of this?  Keep watching—cert petition just filed.

Transformative work of the day, Pom Wonderful/Halloween edition

Crafty blogger Cat has created an excellent Halloween costume (more pictures at link):

Her purse is a repurposed Pom Wonderful bottle.  Are there possible confusion claims?

Thursday, October 29, 2015

Today's unauthorized uses

From pictures I have taken around town.
Just Hike It T-shirt

May the Forest Be With You Shenandoah National Park T-shirt

Am I the only one who sees the Amazon smile in this ad?

"Walkens welcome" sign to attract walk-in customers

Tuesday, October 27, 2015

Les 1201 exemptions nouvelles sont arrivees: remixers get Blu-Ray

Rulemaking here.  As Jon Band says, people who got organized got much of what they asked for, albeit hemmed in by pointless restrictions, but people who weren't aggressively represented by groups willing to spend countless hours on this process didn't.

Edited because it's been a long time since French class and also I was running from class.

Monday, October 26, 2015

Annotating competitor's ad is fair use

Miller UK Ltd. v. Caterpillar Inc., No. 10-cv-03770 (N.D. Ill. Oct. 21, 2015)
 
Miller sued Caterpillar for breach of a contractual restriction on the use of Miller’s confidential information, for trade secret misappropriation, and for fraudulent inducement. Caterpillar counterclaimed for breach of contract, defamation, disparagement, tortious interference, false advertising, and copyright infringement. Most interesting: the court granted summary judgment on the copyright claim because an annotated copy of a Caterpillar ad was fair use.
 
Miller “made a coupler that allowed earthmover and excavator vehicles to attach shovels, buckets, and other attachments to their mechanical arms quickly without requiring the vehicle operator to leave its cab.”  It entered into a supply agreement with Caterpillar to make couplers that Caterpillar sold under its own name. Caterpillar allegedly used proprietary information about the coupler to make its own version and then terminated the supply agreement. After Miller sued, Caterpillar distributed a brochure to equipment dealers that compared its new coupler favorably to other couplers.  
 
Miller replied with its own communication package, including a letter from Miller’s chairman claiming that the Caterpillar coupler was potentially unsafe because it lacked a mechanical backup.  The accompanying video showed the failure of a coupler connection, the dropping of a bucket, and the decapitation of a hard-hat wearing life-sized dummy. There was also a document that purported to be a third party safety test of the Caterpillar coupler, and an annotated copy of the Caterpillar coupler brochure, highlighting Miller’s assessment of the competitive and safety deficiencies of the Caterpillar coupler.
 
Copyright: Market effect is the most important factor. Kienitz v. Sconnie Nation LLC, 766 F.3d 756, 758 (7th Cir. 2014).  Miller’s annotated version of Caterpillar’s brochure had no effect on the value of the brochure, as opposed to the value of the product touted by the brochure.  Plus, negative impact on the value of a work by convincing the audience that the work is no good is not harm for purposes of copyright.  Thus, the first factor (?) weighed in favor of fair use.  “[T]he commercial value to Miller and any resulting decline in the commercial value of the original work resulted not from the value of the original, but from the Miller additions. Such uses are not considered substitutes for the original work and are encouraged by the fair use doctrine.” The nature of the work—an ad—didn’t favor Caterpillar, though the wholesale copying did.  Without separately analyzing factor four, the court found that the annotated brochure was fair use as a matter of law.
 
The disparagement, defamation, consumer fraud, and false advertising claims against Miller survived because the truth or falsity of Miller’s statements that Caterpillar’s coupler posed safety risks was not resolvable on summary judgment.  Moreover, Caterpillar showed that Miller’s package caused it to take steps to mitigating the impact on customers, and its expenses were recoupable as damages.  Therefore, Caterpillar didn’t need to show lost sales or profits.  Mitigation expenses also counted as special damage for defamation purposes.  Miller allegedly said that Caterpillar made an unsafe product, which would count as incompetence in business, which could be per se defamatory.

Friday, October 23, 2015

Registration symposium at William & Mary, part 2

Rebecca Tushnet: And now for something different!  I’ve been asked to speak about the implications of the Pro-Football case and decisions made by the courts with regards to the trademark process and freedom of speech.  Thanks to Fred Schauer and Mark Tushnet for illuminating discussions, and to William & Mary students for the opportunity to talk about these important issues. I’ve been trying to work through them and I caution that my conclusions are necessarily tentative at this point.
 
All or almost all of the §2 bars are also reasons that the courts will refuse to protect a claimed trademark under §43 of the Lanham Act, which provides trademark protection for unregistered marks.  These reasons include: the claimed matter is functional, meaning it affects the cost or quality of the product or service; the claimed matter is merely descriptive, meaning that consumers don’t understand that it indicates source and instead think that it just describes some characteristic of the product; the claimed matter is deceptively misdescriptive, which is like descriptiveness except not true; the claimed matter is deceptive; the claimed matter is confusingly similar to an existing registered mark or mark in use in the US; the claimed matter is the name, photo or signature of a living person and there’s no written consent from that person to register the mark; the claimed matter is the flag or insignia of a nation or state or other US political subdivision; the claimed matter creates a false association with people or institutions; and last but not least, the claimed matter is scandalous, immoral, or disparaging.
 
The constitutionality of § 2(a) is now in question because of some high-profile cases.  From the First Amendment side, we have Reed v. Town of Gilbert: last Term’s sign case in which the Supreme Court struck down a city’s sign regulations on the theory that they were content-based and didn’t survive strict scrutiny.  The rule suggested, though it’s not clear whether it will actually apply this broadly, is that all state regulations of speech that depend on an evaluation of the content of the speech to determine whether the regulation has been violated are content-based and must survive strict scrutiny.  Section 2(a) is nothing but content-based (with a possible exception to be discussed in a bit). 
 
Meanwhile, we have the cases Professor Farley discussed, so the collision with trademark law seems imminent.  It’s possible to argue that trademark is a First Amendment-free zone, as copyright basically is except for the internal restraints of the fact/expression division and fair use, but that argument seems unlikely to prevail as easily with trademark and trademark registration, neither of which are mentioned in the Constitution and the latter of which confers rights unknown at common law.
 
A brief review of the justifications usually given for the exclusions for marks that are scandalous or disparaging: (1) the harm done by the government endorsement represented by a registration; (2) the desire to withhold government resources from disparaging or scandalous terms; (3) the lack of any effect on a user’s ability or right to use the mark, with (a) possible §43(a) or state common law protection against confusing uses despite unregistrability, though this is not at all certain, or (b) even if there’s no protection against confusing uses by other people, there’s still nothing stopping anyone from using a disparaging term on a T-shirt (at least if they’re not going to a public school) and thus there is no government harm inflicted on them. 
 
Justification (1) very much depends on public understanding.  Confederate Veterans license plate case from last Term allowed a state government to decline to approve a Confederate Veterans logo for personalized license plates even though it approved a large number of other specialized license plates.  The Court ruled that the plate design constituted governmental speech, and thus the government was not bound to neutrality in its decisions.
 
If registration is the government’s agreement that a term is appropriate for federal registration, equivalent to the government’s agreement that a term is appropriate for placement on a license plate, then there is no problem with refusing the registration. This is the reasoning recently adopted by the district judge deciding the Washington football team’s case.  But do people actually understand the difference between the ® symbol, the TM symbol, and nothing?  The Supreme Court didn’t exactly look for empirical evidence in the Confederate Veterans case!  The dissent argued that, given how many different license plates are approved, no one could reasonably perceive a government endorsement; that’s even more true for trademark registrations—the government couldn’t possibly be both an Apple Mac and a Windows PC, or a UVa alum and a William & Mary alum.  But that’s oversimplifying—the government could express an opinion about what the boundaries of tolerable public discourse are; allowing a particular plate, or a particular mark, expresses only the opinion that it’s tolerable, without saying that it’s correct.
 
There’s a related body of law of some possible relevance: the establishment clause cases, in which Justice O’Connor developed a line of reasoning that the question of whether government endorsed religion with some action had to be assessed from an objective perspective, assuming a person with reasonable levels of historical knowledge/understanding.  Anyone to whom the difference between registration and trademark protection is explained can usually grasp it very easily. Given that fact, by analogy §2(a) is if anything an easier case than Confederate Veterans.
 
Justification (2) doesn’t work, because it takes a lot of resources to enforce §2(a).  Also, if §43(a) remains available, then government resources are still being devoted to protecting such marks, perhaps even more resources, insofar as there is no more presumption of validity under §43 as there is for a registered mark and therefore an inquiry into protectability must be made in each case.
 
Justification (3) is the most interesting to me.  (3)(a) is unsatisfying to anyone.  There are significant differences between the benefits of registered and unregistered marks—nationwide scope, presumption of validity/incontestability after 5 years, the ability to use a US registration to secure rights under foreign registration systems, the ability to invoke counterfeiting laws.  If that harm is acceptable, then it should also be acceptable to impose the further harm of not providing any protection against confusing uses at all.  So, to me, this reduces to a question of unconstitutional conditions: does the government violate the First Amendment by refusing to protect certain marks because of their content?
 
And asked that way, it’s clear this challenge opens up numerous cans of worms.  All of the exclusions in §2 are content-based.  Let’s assume they only operate on commercial speech (though this is not necessarily true).  Full understanding now requires a brief excursion into commercial speech doctrine, the centerpiece of which is the Central Hudson rule. Under Central Hudson, false or misleading commercial speech may be banned.  Regulations of truthful, nonmisleading commercial speech, however, must actually serve a substantial government interest and be no more restrictive than necessary to serve that interest, though this is not a requirement to use the least restrictive alternative.
 
Assuming that §2 only operates on commercial speech, then, we still face a division between false/misleading speech and other commercial speech.  Since false and misleading commercial speech can just be banned, there’s no doubt that the government can refuse to support it.  Bans on other commercial speech must survive Central Hudson. But wait!  There’s also mandatory disclosure law.  If the government is not suppressing commercial speech, but rather requiring disclosures, the Zauderer line of cases becomes relevant.  Zauderer involved attorney advertising that told laypeople that if the lawyer lost their case, there’d be no fee.  The Supreme Court held that the state could require an additional disclosure clarifying that fees and costs were different things and that, if they lost, they’d still be liable for costs. The Court did not require the mandatory disclosure to satisfy Central Hudson, but applied something like rational basis review—as long as the required disclosure was truthful and noncontroversial, and not unduly burdensome, it was constitutional.
 
A refusal to provide trademark protection is arguably much more like requiring disclosures—it may create an economic burden and thus a possible disincentive for the speech, but it doesn’t suppress that speech directly—than like a direct ban. However, lower courts are not in agreement about whether Zauderer only applies when the government is requiring disclosures to correct misinformation, versus when it is requiring disclosures to provide useful information. 
 
Take the broad view of Zauderer—such burdens on commercial speech are allowed when the government is requiring disclosure of truthful, noncontroversial information that isn’t unduly burdensome, even though it is targeting particular content for the required disclosure.  Do the 2(a) bars look anything like that? 
 
(1) Is the government determination about being scandalous/disparaging truthful and noncontroversial?  A weak point—this may not be an answerable question.  There is probably some reasonably objective truth about whether a substantial proportion of the general public, or the targeted group, finds the mark outrageous or disparaging, respectively.  If we are confident in the PTO’s factfinding ability, then at least some scandalousness and disparagement determinations—say, the c-word and the n-word—are probably truthful and noncontroversial.  Since failure to protect isn’t itself a disclosure, it might not need to be noncontroversial—the Court’s concern seems to have been for forcing commercial speakers to put out ideological messages they didn’t agree with.  That concern would be completely irrelevant for a refusal to register.  But what it means for a determination to be noncontroversial is, of course, itself highly contestable.  The very fact of a litigated challenge might seem to suggest that a disclosure—or a bar to registration—is controversial; the Supreme Court has not been very helpful in identifying what it meant by that term. 
 
(2) Even if we find a disparagement determination to be truthful and noncontroversial, is it unduly burdensome to deny TM registration or, in its entirety, TM protection?  I don’t think this Q can be answered except normatively—this isn’t like a disclosure that takes three minutes to recite when most ads are only 30 seconds long.  (3) Suppose we decide that we do need to get rid of scandalousness/disparagement registration bars because they don’t meet a Zauderer-like standard.  What of the remaining exclusions? This question can be fruitfully grouped with the next issue:
 
Take the narrow view of Zauderer—such burdens are only allowed when there’s some relationship to preventing deception.  Once we thereby get rid of scandalousness/disparagement, there are other §2 bars whose constitutionality remains to be addressed. 
 
(1) Which are at least arguably related to consumer deception?  Well, deceptive marks, pretty obviously—though the fact that refusing registration doesn’t stop the use of the mark to deceive people might be a problem of insufficient tailoring.  Marks that create a false association with persons, institutions, etc. Geographically deceptively misdescriptive marks, ok.  Name, picture, or signature of a living person (or president whose widow or widower still lives) without written consent, seems ok as a legislative prediction at the wholesale level about the risk of false endorsement.  Even the bar on registering flags and other indicia of states, nations, and other political units arguably has some relationship to preventing deception in that this is a subclass of signifiers whose potential for abuse is so great that Congress could legitimately make a blanket rule without requiring case by case evaluation.
 
(2) What about those §2 bars related to consumer understanding, but not so much to deception?  For example, merely descriptive (or deceptively misdescriptive, or geographically misdescriptive) marks are not deceptive when a TM claimant uses them. But there are policy reasons we want other producers to be free to use them as well.  Claimants could cause harm to the marketplace by gaining monopoly rights over them.  Is that enough of a justification to sustain these bars, given that they are content discriminatory by our excitingly broad definition of content discrimination?  To me, the fact that the acid logic of current First Amendment protection makes the bar on registering merely descriptive terms seem even arguably questionable shows that something has gone seriously wrong with the Supreme Court’s condemnation of content-based regulation, which has now become detached from the underlying justifications that one might reasonably give for worrying about content-based regulation. 
 
Sure, we could say that the bar on registering descriptive terms survives strict scrutiny, but I don’t see how that can be true without doing serious damage to the concept of strict scrutiny.  For example, we already have a less restrictive alternative than barring registration in the very same statute: we could allow registration of descriptive marks, and give everyone else a descriptive fair use defense, just as we do now when a descriptive term has secondary meaning and is registrable.  Of course, having the descriptive fair use defense is not as good for competitors as full freedom to use a descriptive term lacking secondary meaning—but is that marginal difference enough to survive full First Amendment scrutiny?  At a minimum, the difficulties with this approach indicate that, if Zauderer-like scrutiny should apply to refusals to register, it should be the broad version of Zauderer, allowing the government to pursue non-deception-related objectives, though which such objectives are independently constitutional can still be debated.
 
Side note: another constitutional jurisprudence could use the fact that a trademark confers some private right to suppress other people’s speech as a reason that the government can make balancing decisions about whom to favor—that is, whatever rule the government makes will affect the speech environment, so saying that each rule has to survive strict scrutiny doesn’t make much sense.  Unfortunately, that’s a tough argument to make in our current constitutional order, which tends to assume the existence of particular baselines, such as that the government will protect trademarks.
 
(3) What about functionality as a bar to registration/protectability?  This is a fascinating issue because it is a pure U.S. v. O’Brien situation: by definition, a symbol that is functioning as a mark, but also possesses utilitarian or aesthetic functionality, is not barred from registration/protection because of anything about its communicative status.  It is barred because of the things that it does that aren’t communicative at all, just as the government supposedly punished O’Brien for burning his draft card not because of his anti-war message but because it needed that draft card for other purposes.  Unlike O’Brien itself, there’s absolutely no reason to disbelieve the government’s content-indifferent rationale for its regulation.  With functionality, the government here is regulating conduct (preserving everyone else’s freedom to use a functional feature) and not speech.  Nonetheless the government rule has effects on speech—it discourages the communicative use of functional features, because you can’t get protection for them.  Under O’Brien, a law that burdens expressive conduct is unconstitutional, even absent any bad state purposes, unless “it furthers an important or substantial governmental interest; and the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.”
 
In some sense the exclusion for functional matter is motivated by the government’s desire to shape the universe of communicative devices so that it doesn’t overlap with the universe of functional features.  The thing is, there’s just nothing wrong with that desire even if characterized as speech-related—this is why Justice Breyer and the Justices in agreement with him are absolutely right that the term “content-based” as recently used in Reed is ridiculously, preposterously, unsustainably overbroad.  The government interest is substantial and the restriction is exactly coterminous with the government interest.  So let’s conclude that at least functionality would survive Central Hudson scrutiny both as a bar to registration and as a total bar to protection.
 
Go back then to the category of descriptive terms lacking secondary meaning.  Can government deny protection to those?  Denying trademark protection to such terms doesn’t directly protect consumers from deception, though it may indirectly prevent them from being fooled by the absence of information from other producers who also want to use those descriptive terms. 
 
So, may the government condition the benefit of trademark protection on a claimant’s speech-related choices, here what kind of word to use? One answer: yes, if the condition is related to the purpose of the program.  Here, one core purpose of trademark is to connect nonfunctional terms to particular producers so consumers can use them as indicators of source.  A descriptive term without secondary meaning doesn’t do that, so a producer who uses such a term can be excluded from the government program.
 
But is the only permissible purpose of the program to improve the quality of truthful or nondeceptive signals that consumers receive?  Can our concept of “quality” consider the harm done to significant segments of the population by having disparaging or scandalous terms commercialized?
 
I have to admit that unconstitutional conditions doctrine is a big hairball.[1]  There are huge problems of determining what counts as coercion, or as the appropriate baseline from which to measure your entitlement.  Kathleen M. Sullivan, Unconstitutional Conditions, 102 Harv. L. Rev. 1413 (1989): “[D]eciding under what circumstances government offers, like private offers, are coercive is an inevitably normative inquiry.” 
 
Nonetheless I want to argue that the §2(a) exclusions, all of them, do not represent unconstitutional conditions.  And the reason is something peculiar to trademarks: trademarks can communicate (at least) two different things—but the only thing the government protects as a trademark is the communication “this symbol stands for a particular producer.”  Under §2(a), any speaker can continue to use any symbol it wants, but it can only get a registration for matter that does not run afoul of any exclusion—for the Redskins, the team colors and logo. 
 
Friedman v. Rogers, 440 U.S. 1, 12 (1979), says that trademarks have “no intrinsic meaning” and thus that there’s no First Amendment problem with the government barring certain marks for fear they might be deceptive.  From a trademark lawyer’s perspective this might be a puzzling or even contradictory statement, but one way to read what the Court is saying is that the source indication function of trademark is not the communication that is protected in commercial speech.  As source indicator, a mark is neither truthful nor untruthful in advance of legally enforceable meaning, and—unlike ordinary communication, where changing the words can change the meaning, as the “Fuck the Draft” case Cohen v. California teaches us—a change of mark does not change what is communicated by the trademark function: this is who I am/this is my source.  Google is Alphabet.
 
Unlike the clinics in Rust v. Sullivan, a case in which the Court found that it wasn’t an unconstitutional condition to require any health clinic that took federal money to separate abortion related information and activities from the part of the clinic funded by the government,[2] a speaker doesn’t even h ave to separate its activities to take advantage of the TM registration system. 
 
[slide] To analogize to the Confederate Veterans case, as with the license plate, the speaker’s free to put a confederate flag bumper sticker on his bumper; he just can’t have it on the license plate. Washington’s football team can keep its name and continue to get the government’s help suppressing counterfeits etc. It just can’t get the government’s help using only this particular disparaging symbol.  If the whole car is our unit of analysis, like the whole product or service offered by the producer, then the government’s unwillingness to implicate itself in the disparaging or racist aspects of the message communicated by the car or the product may be itself a sufficient interest to justify the exclusion, given that the government is not gaining any leverage over the message appearing outside the license plate or registered matter.[3]
A number of cases and commentators have suggested germaneness to the program’s aims as a standard for determining whether a condition is unconstitutional: you can be denied TANF because you are making too much money, but not because you protested the government—germaneness here, though, reduces to the question of whether it’s ok for the government to have this preference for nondisparaging marks.  I think there’s no question that denying Washington’s football team any trademark rights in any symbol as long as it also used the team name would be a penalty for the exercise of First Amendment rights.[4]
 
Moreover, viewpoint discrimination can be illegitimate in many more instances than content discrimination—my theory doesn’t license Congress to grant trademarks only to Republicans.  But: Would my reasoning license Congress to eliminate any trademarks that were themselves pro-choice?  Viewpoint discrimination can violate the First Amendment even if the underlying activity isn’t protected by the First Amendment—RAV v. City of St. Paul teaches that you can’t decide that assaults against Republicans because they are Republicans will be subject to harsher punishment, or that only false advertising that degrades men will be banned.[5]
 
Conclusion: Once a program is exposed to the modern First Amendment in its rawest form, that program may have difficulty surviving, no matter how sensible it is.  This is either a problem with First Amendment doctrine—or it’s a problem with the modern rejection of Lochner.  If we are really that suspicious of government regulation picking winners and losers, then we shouldn’t even have registration—and maybe not infringement cases!  Or, my preferred response, we should rethink the corrosiveness of First Amendment doctrine applied to ordinary economic regulations.  In some ways, whether §2(a)’s ban on disparaging marks survives constitutional scrutiny is only a small part of that broader issue.  There remains the possibility of continued ad hoc-ism, where the Court applies its strict scrutiny only to the parts of a system that protect less politically powerful groups, as is its trend with campaign finance and affirmative action.  But that would be the worst result of all.
 
Brooke: Is TM property?  © and patent are in the constitution.  It’s not really property, but represents goodwill. You can pledge TM registrations to a bank and pledge them as security for a loan; Ford pledged all its TM registrations to financiers to avoid bankruptcy.  Ambiguity as to whether it’s property.  The gov’t is picking winners and losers.  Doesn’t think Court will hold 2(a) unconstitutional, but we need a working system. 
 
Allen: Personally, agrees that registration is an affirmation/presumption of validity that there is some weight behind the mark.  Not just something that the applicant takes home but can use abroad. 
 
Heymann: is there any approval of the message in a registration?
 
Allen: Yes, in the sense that it affirms that it survived §2.
 
Farley: That’s the question of the day! Going to other gov’ts saying that this gov’t has approved the mark. Most countries have this kind of prohibition, usually phrased as public order or morality.  It is the US saying “this message is ok”—whether it’s “using LEATHER on these products is nondeceptive” or something else.  Fed. Cir. was interested in whether CO could bar protection of pornography under this rationale.
 
RT: Depends on your theory of the 1A.  I think the answer could be yes, but there is nonetheless a big distinction between © and TM.  Because TM is about protecting a source link, the Washington team can have the unregistrable word present on everything that is protected by its rights in the team colors and logo. By contrast, a work refused © because it was pornographic would have to change its content to gain protection.  So you could easily invalidate such restrictions on © while still sustaining §2.
 
Heymann: questions of evidence.  If there are a bunch of actually disparaging marks on the register because the targets don’t have the resources to challenge, is that a problem?
 
Brooke: we’re supposed to care about consumers/protecting consumers, not if Ford is trying to protect its property.  Many of these marks will fail/be taken care of by the market.  People can choose to be offended or not.
 
Farley: the market won’t fix everything; if we trust the market on that, why not trust it on everything else the TM act is concerned with?  If the issue is connecting the gov’t w/the ® of a disparaging term today, then the rule should be that we assess its meaning today.  [That creates some real problems for my constitutional analysis, since that would mean there are untrademarkable goods & services, like the Amos & Andy works, or OJ Simpson: any time the public starts to associate the mark with the underlying offensive goods/services, then that mark would be disparaging/scandalous too.]
 
Problem with evidence: PTO relied on blog saying Slants were rejected for their name, but Slants say that’s not true; blog was mistaken in its facts.  The limited evidence available to the PTO creates some risks.
 
Brooke: Market pressure often takes care of this: Sambo’s restaurants have been abandoned.  If Dan Snyder had been smart, this would have been taken care of a long time ago.
 
Q: is original justification just to prevent bad marks from being in the marketplace? Scandalousness/disparagement doesn’t seem like consumer protection.
 
A: But that’s not the only justification for TM: ordering producer relations. Incontestability has nothing to do w/consumer protection, for example.  Also, historically, disparagement was first before false association—it may well be unconstitutional the way old defamation law was, but it’s deeply embedded in the existing scheme.
 
Farley: Flag prohibition could be back-justified as deception based, but legislative history is about diplomacy; likewise presidential name prohibition is dignity-based in stated historical justification. 
 
Brooke: would never say that Lanham Act is other than consumer protection in federal court, as a practicing attorney.  If you’re litigating a case, you better be talking about consumers.
 
Heymann: prediction about In re Tam?
 
Farley: court was arguing with itself, passionately.  The fact they’d have to overturn precedent, plus questions about what exactly they’d be invalidating—disparagement, false association, scandalous, descriptive—is something they’d have a hard time wrestling with. Fed. Cir. doesn’t want to undo all of TM law, which might be enough to convince a majority to affirm.
 
Brooke: would probably have said SCt would find it unconstitutional before Confederate Veterans, but now thinks they’ll defer to gov’t agency.
 
 


[1] Mitchell N. Berman, Coercion Without Baselines: Unconstitutional Conditions in Three Dimensions, 90 Geo. L.J. 1 (2001) (“The Supreme Court’s failure to provide coherent guidance on the subject is, alas, legendary.”) (footnote omitted); Cass R. Sunstein, Why the Unconstitutional Conditions Doctrine Is an Anachronism (With Particular Reference to Religion, Speech, and Abortion), 70 B.U. L. Rev. 593 (1990).
[2] Rust v. Sullivan (“[A] refusal to fund protected activity, without more, cannot be equated with the imposition of a ‘penalty’ on that activity.”).
[3] Cf. Sunstein, supra (“In the spending context, the government may be able to invoke justifications that are tightly connected to, and become legitimate because of, the very fact that it is engaging in those activities. In the public school setting, for example, government can plausibly justify its selectivity by the need to ensure that public funds are not spent on religious activities.”).
[4] Compare Rust v. Sullivan (discussing hypothetical withdrawal of all benefits from any woman who chose abortion).
[5] Cf. Sunstein, supra (arguing that government funding choices on aesthetic, qualitative, and content-based grounds are all acceptable and distinguishable from viewpoint-based discrimination).