Thursday, March 23, 2017

TM scholars' roundtable

Ninth Trademark Scholars Roundtable: Distinctiveness, Secondary Meaning, Reputation And Fame
Chicago-Kent College of Law

Session 1:       Distinctiveness (including Secondary Meaning) as a Legal Concept

Introduction:   Barton Beebe: different approaches. Any general claims about distinctiveness must take into account: eligibility for protection/scope of protection; reality v. policy; words v. non-words; perception by single consumers v. aggregate; consumer search costs approach v. product goodwill approach; US v. EU. 

Eligibility v. scope: Many claims about distinctiveness work in both contexts, but keep it in mind. Psychology of individual consumer v. amorphous crowd of consumers. Some might see a mark as fanciful, others as arbitrary.  Is this claim about consumer protection, or is it a claim about what consumers should think?  Doctrine as both descriptive and prescriptive. Non-words: Abercrombie doesn’t work for them (if it even works for words).  Consumer search costs approach to TM v. producer goodwill—Bob Bone’s work. If our emphasis isn’t minimizing search costs but facilitating production of goodwill, does our concept of distinctiveness work the same way?

What does it mean for a mark to ID a source?  My answer: a mark is distinctive of source in the sense that a consumer believes it refers to one source as opposed to multiple sources [or as opposed to nothing about source?].  Secondary meaning survey: you ask whether it’s one source or more than one source. This also goes to inherent distinctiveness analysis: having never heard of this before, do you think that this term is referring to one company alone or is being used by other companies?  This approach works ok for eligibility, but not as well as determining the extent of distinctiveness. Eligibility seems like a binary determination, but scope is not.

Distinctiveness of source is one thing; distinctiveness from other marks is a different thing.  Strength or scope goes to distinctiveness from other marks.  Does it stand out to the marketplace.  A lot of times law pretends to talk about distinctiveness of but is really concerned with distinctivenss from.

Jake Linford: What do we think we’re doing w/TM law?  Are consumers confused/are we protecting consumers/are we giving consumers tools to pick in market? Are we incentivizing marketers to pick clear signals/making space for new entrants/protecting property rights?  Which is most important to you will determine how important you think it is to get Abercrombie spectrum right—we want our TM validity thresholds to dovetail w/what consumers see; or you may think we want to prevent incumbents from excluding competitors; or you may think that investment should be rewarded w/right to recoup benefits. For example, Linford’s piece on per se bar on generic terms looks at what consumers might expect to see given how language changes over time; if we care most about that, we might not want a per se bar. But if we want to maximize something else, there may be no way to reconcile those goals at the margin.

My answer to Q about current tests: they don’t properly assess inherent distinctiveness. Even fixing Abercrombie wouldn’t necessarily generalize to symbols/trade dress etc.

The research we look at has its own assumptions—linguistics has a descriptive bent. Consumer marketing research is designed to help mark owners to be more persuasive. If our normative baseline is providing entry space for new competitors, marketing research may not be the best toolkit v. protecting incumbents’ ability to persuade consumers.

Assume you’re persuaded by Jacoby’s description of how minds work: chunking, spreading and activation—mark becomes salient in way that drives consumer decisionmaking. Lockean Q: is it work that owner has done that deserves to be rewarded as such? How much of that is due to consumers themselves (Litman, Breakfast w/Batman)?  Nestle cases—this Q preoccupying Euro courts is whether consumers are relying on the mark to find the product they seek, or are we just looking for association?  Affiliation sounds like association; these cases seem to be trade dress or color cases, marginal areas generally—do the things we see in limits in European law deserve importation?  Is reliance the right question?  Initial instinct is to resist, but not sure why.

Does it matter which term we use to describe distinctiveness?  Acquired distinctiveness v. secondary meaning—acquired seems Lockean/merit-based.  Secondary meaning seems to presume primacy of primary meaning. That’s what he sees as error in per se bar of generic terms acquiring distinctiveness.  Source significance seems to him to be more neutral.  Timberlake thinks only source significance matters; McKenna is worried about other things as well.

Discussant:      Stacey Dogan: Key motivator for TM is interests D is representing, either individually (justification for own use) or more generally (interest in protecting freedom to use descriptively).  Some combination of economics, informational, and moral rights concerns—protecting investments of mark owners. The way that distinctiveness comes in is that courts look at a mark as used w/a product, and they say not just is it serving source ID function but what are the costs associated w/allocating rights in the term to this one party.  Arbitrary/fanciful: the costs are low, even if they haven’t yet penetrated consumer consciousness. They don’t serve an important info function in the marketplace yet, but someone else who adopts the mark for a similar product lacks justification.  “Technical TMs.”  The reason the D is using the mark has to be unsavory.

Protecting innocent motives also reduces obligation of innocent parties to do too much search, esp if mark is fairly descriptive/not well known w/in a particular geog. area.  Similar questions w/different product markets.  W/real fame, there’s no justification for anyone anywhere to use.

RT: Beebe’s answer to What does it mean for a mark to ID a source?  Beebe’s initial answer: a mark is distinctive of source in the sense that a consumer believes it refers to one source as opposed to multiple sources. But those aren’t the only 2 possibilities: perhaps the consumer believes nothing whatsoever with respect to source.  [2 sub-options: (1) consumer believes it isn’t supposed to signify source but is something else, e.g. design or decoration; (2) consumer thinks nothing of it at all unless prompted, and thus will give random answers.]

Graeme Dinwoodie: how one operationalizes that—looking at differences b/t mark and other signs rather than the meaning of the goodwill, which Beebe may mean by distinctiveness of source.  Kind of a patent analysis—how far are you away from the prior art?  Unless a crowded field then has an effect on the first question—one kind of distinctiveness may inform the other.

Dogan’s account of distinctiveness was more normative than he teaches.  Sense that her take is more normative than evident in courts’ explicit analysis of distinctiveness.  [Though see KP Permanent/Sealed w/a Kiss case—that’s a risk the D took when it adopted a descriptive mark.]

Beebe: Seabrook test is a “distinctiveness from others” test that ultimately is used to answer “distinctive to consumers” question.

Jeanne Fromer: We conflate inherent/acquired distinctiveness in many circumstances, but the concepts are distinct. And they’re deeply distinct—people emphasize one value over another; Ramsey is interested in inherent distinctiveness more, while Linford values acquired distinctiveness.

Lionel Bently: should the fact that there is a descriptive use defense mean that we shouldn’t be so bothered about the negative effects of registering a descriptive term?  UK courts traditionally say we are still concerned b/c registration is so powerful—trader shouldn’t have to look to a defense to use a descriptive term.  The ECJ in Windsurfing decision did that too.

Agree w/RT that often consumers don’t see a TM relevant thing at all.  One thing we might want to take into account is people’s views when they’re not consumers.  Why do we arrive preformed as consumers instead of as social or political beings?

Differences b/t distinguishing as source and distinguishing from others’ marks.  We see internationally and in EU law the notion of distinctive character for maintenance purposes.  You can maintain a mark that’s different from what’s on the register as long as it’s not enough to change the distinctive character.

Mark McKenna: difference b/t priority and nonpriority dispute screams out from cases. Way courts evaluate use and distinctiveness in priority is hermetically sealed from other contexts precisely b/c they know someone is going to get the mark; it’s just a question of who.   We start w/a rough empirical cut and then layer other concerns on top—industrial policy concerns.

Ambiguity of “source”: the fact that people are used to seeing something w/one producer is often used as evidence of TM meaning, but that’s not the same thing.  Association isn’t association as an indicator of source. Hardest w/non-word mark cases; there are lots of other possible explanations for consumer reactions that we should consider. 

Robert Burrell: The market should often correct itself in terms of mark choice.  Market failure may occur when businesses are starting out they need to be encouraged to choose TMs that will serve as badge of origin rather than just being concerned w/market penetration. But that reasoning would suggest that experienced firms wouldn’t select descriptive terms, but they do.  People don’t spend a lot of time thinking about “what is the badge of origin”? They’re just buying stuff, in response to all sorts of different signals. So we are trying to protect competitive signals, knowing that consumers will be responding to lots of signals that have nothing to do with source identification. Once you’re honest about that, our perspective on infringement would have to change.

McKenna: registrations that issue with purported limitations that won’t matter at all in litigation—that’s a huge problem. B/c the PTO is thinking only about validity it doesn’t deal w/that problem.

Linford: This Q of what a registration does is implicit in the struggle w/Tam. 

Bob Bone: characteristics of the mark may be probative for consumer protection. For eligibility what we’re talking about is percentage of consumers who use mark as source ID in strong sense.  Rough, normative determination of percentage. For scope, then we are talking about strength, and how distinctive it is w/r/t other marks. But he doesn’t think we ought to do that for eligibility. Inherently distinctive marks aren’t distinctive; they’re just really likely to be distinctive.  That has to be qualified by what Fromer said—maybe we’re protecting inherently distinctive marks for incentives for firms that are beneficial down the road.  But if it’s just likelihood/probability of distinctiveness, that’s a different issue. Probability has to be assessed in some way.  Probability is both a descriptive and normative issue.

Beebe: will stick by his own definition but wants to restate it & explain why.  Distinctiveness is ten-dimensional—w/r/t inherently distinctive marks that are word marks, if you accept consumer search costs approach in the US, then we can say this. Otherwise it’s hard to say something general.  Gives the whole system a flexibility.  That’s why his approach is: one source/multiple sources. If a signifier doesn’t refer to a source at all: you ask consumer whether a plain box is used by one company or more than one company.  I want to hold on to anonymous source company.  Do you associate this box with one company or more than one company?  Or is it not associated with a company?

RT: but you didn’t offer that third option, “not associated,” in your first formulation.

Beebe: one company, more than one company, or is it meaningless to you?

McGeveran: do you associate this with one company or don’t you?

Dogan: if one company has been selling this box for 17 years, the fact that people recognize it as coming from that company is source significance, but this is where competing values like functionality come into play—even with source significance, it’s functional.

McKenna: there’s also a difference b/t association w/ a company and thinking it’s an indication of source.

Beebe: the cases in the US aren’t so much on your side.

Michael Grynberg: dichotomy of distinctiveness: do we want it simple or nuanced?  Lawyers can advise clients on the multifactor test, which is a virtue of the system v. accuracy at margins.

Dinwoodie: use as a mark as a test for validity might be a way to reframe some of this as distinct from distinctiveness.  Also, significance of inherent distinctiveness has increased as more and more applications are ITUs, which are supposed to be inherently distinctive. 

Mid-Point Discussants:           Lionel Bently: EU: Categories of marks devoid of distinctive character, descriptive, generic: overlapping, informed by different concerns but capable of being applied cumulatively—treat them as less important than Abercrombie. Devoid of distinctive character: generic, descriptive, signs that would not be recognized as TMs.  Applied in that sense primarily to nontraditional marks.  Test: whether there’s such a difference from the normal shape or presentation that the consumer would notice it.  Different tests for secondary meaning?  We could apply different tests/showings in relation to potential problems. 

Surname cases: demand to show secondary meaning is a little odd. Either the reaction is always “it’s a TM” or it sends us into a sea of uncertainty (e.g., you see “McKenna” on a bottle of beer—people will arguably automatically see that as a TM if it’s in the right place on the bottle; otherwise not).  Burrell says this is a waste of time. We should focus on normative side—what are the reasons not to make this a registered TM, which makes us think much harder about what’s wrong w/registration. That would be a good thing.  One key: depletion of marks otherwise available to competitors. Cultural signifiers—Picasso for cars may cause a different sort of harm, whether we call that dilutive or not. Distinctiveness of Red Cross.

All the considerations in determining inherent distinctiveness suddenly vanish in the face of acquired distinctiveness b/c of our interest in consumer search costs, which becomes the most important thing—protecting against even a bit of confusion trumps everything but functionality. (And genericism in the US; not in the EU.)

Lisa Ramsey: See anti-free riding impulse throughout the cases, in registration and enforcement. Plus consideration of competition and free expression.  Dilemma: Poor small businesses can’t afford to do a TM survey. Perhaps it’d be good to have a survey required for colors/designs, but small companies can’t afford that. If we really believe in competition, we need to make it easy for small companies to get protection [or hard for big companies to get monopoly rights over persuasive designs], but they can’t do that w/a high bar for protection at the PTO.

So how do we define distinctiveness? It has to be normative. Intent of TM owner: make everything a TM.

McGeveran: never had as much debate over semantic meaning of thing that’s our topic. What if we banned the use of the word distinctiveness from the conversation and forced ourselves to rechristen everything we now call distinctiveness? Which of these things would we give the same name to, and which would get different names?  Would help us think about them differently. One of Beebe’s binaries—distinctive from other marks v. distinctive as indicator of source in mind of consumer. Suppose one was source consciousness/identification v. mark differentiation? We wouldn’t use the same words b/c they’re not the same.  Market strength—is that a measure of the amount of source consciousness?  Or is it a different thing?

Most important thing Coke wants is branding, not identifying: Coke is refreshing. They use the doctrinal tools of lawyers to achieve business objectives. B/c we refuse to acknowledge that’s what they’re doing as often as we should, we tend to go down blind alleys. If we asked a marketer “how is your brand distinctive” they would not say “people know Coke when they look at it” but rather “Coke is relaxing and Americana.” That’s their distinctiveness, and our doctrine is almost blind to it.

Michael Grynberg: does Coke need our distinctiveness for theirs?

McGeveran: they certainly want that, but it’s a minority percentage of time and energy poured into the process—necessary but subjugated in broader ass’n of branding. We could make a decision that the law protects source consciousness but not other forms of marketing distinctiveness.  That’s fine.  The market will handle that. The problem is that it shapes the ways in which firms want to use these marks as tools. They’re going into battle for branding reasons; if we are blind to that as we construct doctrine, that creates problems.

Fromer: It’s really important to think about incentives here. That’s why I care more about choosing some marks over others than perceptions; over time, businesses can foster perceptions for just about everything, so we should think about the costs of allowing companies to choose certain marks over others.  Goes to Bently’s point that we want to keep some words/symbols from being branded, like Red Cross. If we have buckets for types of marks, we still have to shape the buckets and figure out which costs companies should have to bear.  Throwing dilution in: dilution gets a lot of things wrong, but one of the ways in which it’s interesting is the way it thinks about distinctiveness. Mostly equates dilution w/impairment of distinctiveness, but takes degree of inherent/acquired distinctiveness into account: might mean it’s much harder to dilute Amazon/Infiniti w/lots of other meanings out there already, but it is taking account of network of associations. 

Jacoby is so focused on his model from a marketing perspective, w/o accounting for the costs.  Apple isn’t “arbitrary” in the marketing sense—they choose a bitten apple signifying knowledge, friendliness, etc.  Maybe we didn’t connect apples-computers before that but there’s only one link in the nodes required. Maybe we want to encourage businesses to find those latent connections, but we need to think through both costs and benefits.

Shari Seidman Diamond: People out there w/no views at all. When we ask those questions, it’s not tapping into things people naturally think about. It does matter that we have asked the question.  They will obligingly give you an answer, mostly, despite filters/don’t know options.  If it’s true they’ve never given any thought at all to whether this came from one source or multiple sources, that is an important feature that we may be missing.  If it’s allegedly useful for search cost reduction, if they weren’t thinking about it before it can’t have been useful for search cost reduction.

McKenna: Dilution is hot mess. “Impairment of distinctiveness of mark” is nonsense. Doesn’t decrease identifiability of source significance in product market, though it does deal w/uniqueness, and maybe distinctiveness of mark v. distinctiveness of brand.  Distinction b/t TM and brand is really important. When you say Apple signifies knowledge, it’s still arbitrary in Abercrombie spectrum, in terms of branding/associations brought along with it.  We sometimes see push & pull about smushing those together; courts are susceptible to arguments in brand terms and it’s important to be clear about what we mean.  Context is usually the whole point of distinctiveness but dilution takes it away from context.

Marshall Leaffer: In registration context, should be pretty low bar—not necessary to spend lots of resources for something that’s fairly clearly inherently distinctive for arbitrary/fanciful. But secondary meaning is a whole different kind of utility. Not competitive entry so much—we are simply rewarding//providing incentives for those who invest in the goodwill of the mark.  There it should be a very high bar for secondary meaning.  Percentages required go quite low in some cases, though.  That is a wrong turn. We have a lot to learn from marketers: what they engage in, from brand/image aspect, is so important to developing strength.

Dinwoodie: European law: parses out different grounds, all of which look like variants: descriptiveness, void of distinctiveness, incapable of distinctiveness in 3(1)(A)—gives value to the notice function. Series of different categories for denying—failure to provide the notice necessary to competitors; distinctiveness; normative question of competitive effect; and genericness is a bit of a mix. Force courts and Office to pigeonhole them, and in fact we give different consequences.  Can’t overcome 3(1)(A).  Trying to separate predictive questions from normative—if you don’t do that consciously, the normative operations get so submerged in the analysis that we think it’s purely empirical w/o assessment of competitive concerns.

Bone: why not get rid of eligibility inquiries? Could have exclusions for non-distinctiveness reasons, like the bar on names w/o consent.  But as to 2(e) categories on descriptiveness, why bother?  When we get to likely confusion, that requires source identification.  Do we figure that we need an initial screen for likelihood of confusion?  Maybe we do. If we were to redo this w/o eligibility via Abercrombie, what sort of screens would we use?  Normative reasons—litigation costs, threats to competition/overreaching, etc.  Error costs.  We might end up with the EU/Paris Convention.

Dinwoodie: that’s a strategic reason why too much gets forced into distinctiveness. If you limit countries’ ability to create exceptions, there’s nothing for functionality/names, so the Fed. Cir. shoves everything into distinctiveness to create exceptions.

[RT] Responding to McGeveran and Leaffer. Branding: we don’t ever want to protect the branding kind of meaning of distinctiveness. It’s not unique or distinctive.  Coke: Americana, like Ford?  Refreshing, like Winterfresh gum?  Even if Coke’s branding is truly unique in its category, those are generic and functional concepts that should be available to anyone who successfully appropriates them even w/in that category. That’s precisely why we shouldn’t be embracing branding ideas and how we should distinguish: personality of mark is not what the law is or should be here to work on.  Dilution: has to arise from similarity of marks.  That singles out a specific mechanism for associations and a specific effect distinct from meaning or “brand personality.”

Factual Q: Do we know how many secondary meaning registrations rely on 5 years of exclusive use v evidence of consumer reaction or even along w/evidence of consumer reaction?

When we separate normative and descriptive Qs as many including Dinwoodie advocate we find they’re orthogonal. Look at KP Permanent: incoherent result on remand.  Tolerate more confusion—how much more?

McGeveran: not advocating using the law to protect branding components, merely to point out that those get identified as distinctiveness and that’s one reason it causes problems; clear delineation can avoid conflating them.

Linford: is there a way to figure out whether consumers have ever thought about this before, empirically?

Diamond: yeah, consumers want to sound smart and would say they’ve thought about it before.  There are some responses, not so much in design of the Q but design of the survey as a whole, also getting to the issue of needing only a low level on secondary meaning.

McKenna: Abercrombie came out of a history of sorting b/t technical TMs and unfair competition; over decades we’ve layered other considerations on top that weren’t the function of what the distinctions were for. We’re still in so many settings dealing w/cts’ merger of two areas of doctrine w/o sufficiently thinking of the relation b/t them.

Consider the fact that there was a time when if you asked anyone a computer-related Q people would associate it w/Microsoft. You can wash that out as noise but it’s real association. If you merge source significance w/association you can’t deal with that.

Beebe: 4% registered either in whole or in part on the basis of 2(f)—incredibly small.  Filings for marks acquired distinctiveness has risen in absolute numbers over the years, though decreased as a total percentage of filings.

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