An anthropological introduction to YouTube

This video by Michael Wesch is a great overview of the upsides of peer production and the new social arrangements made possible by sites like YouTube. I am particularly fascinated by how Wesch remixes Lim's Us, a fanvid that I had taken very much to address itself to a particular interpretive community. (The relevant segment starts at roughly 43:40.) I think of Us as focusing on favorite fannish characters, not all of whom are major pop culture icons, and the "us" of the title as being specifically members of a creative remix community. Wesch, however, makes Us into everyone who uses YouTube, partly by mixing it with a Larry Lessig speech.

Though the Numa Numa video is a structuring device used throughout Wesch's presentation, Wesch doesn't bring in the IP issues--the first famous Numa Numa guy and everyone playing off of him are using the music without authorization--until the very end, though he then does make the point that unauthorized remix is at the core of much of this communicative and self-expressive ferment.

I did feel the presentation was overly tilted towards the optimistic side. Lots of human connection; very little mockery. But then, he's making a move in an argument, and there's no reason he ought to be required to make the case for the harms of peer production when many other people are quite willing to do it.

Wesch did point out that many of the videos weren't made for large groups to see, just for a few people. His use of Us was an example of what he calls "context collapse." Often when we see something bizarre on the internet, we don't stop and ask "well, is this for me?" Sometimes it's not bizarre to the group to which it's addressed. But it's often easier and more efficient to put that highly targeted production out there for anyone to find--the same dynamic that makes it easier and more efficient for Google to index as much of the web as it can rather than hand-selecting what's relevant to queries. Yet the social meaning of what it means for ontology to be overrated, or everything to be miscellaneous, is highly complex--not everyone will be happy with the associations created by dispersed, open, user-tagged information environments. I look forward to seeing more of Wesch's work on the bitter as well as the sweet of the connections forged by YouTube.

Cristal light: laches bars claim against Cristalino

Roederer v. J. Garcia Carrion, S.A., 2008 WL 2901609 (D. Minn.)

Roederer sells the upmarket champagne Cristal. Carrion sells wine from the Spanish winery Jaume Serra, including cava, a bubbly wine. Jaume Serra first used “Cristalino” as a mark for a cava sometime before 1987. By 1989, US sales began at a low volume. By 1997, US sales were at 400,000 bottles/year and Cristalino had nationwide penetration.

The initial label used “Cristalino Jaume Serra.” But in 1993, “Jaume Serra” was deemphasized, leaving “Cristalino” with sole prominence.

In 1998, Carrion began a 14-million-euro modernization project that expanded its capacity to produce all its wines, including Cristalino. Annual US sales for the next three years were about 700,000 bottles; 2002 saw seven-figure sales; and Carrion presently sells three million bottles a year in the US, about 27% of Carrion’s total cava production, making Carrion one of the largest cava exporters.

Increased sales brought increased publicity, starting with minor reviews by Wine & Spirits in 1991 and by The Wine Spectator and San Francisco Independent in 1993. The frequency of such mentions grew significantly by 1999. Carrion has marketed Cristalino in the US as a “value brand,” using standard wine advertising media and in-store promotions.

Roederer’s Cristal champagne, by contrast, is expensive and sold in distinctive, flat-bottomed crystal bottles. Roederer has a US registration for CRISTAL CHAMPAGNE and a related design. It opposed registration of CRISTALINO and similar marks by Carrion in various non-US jurisdictions, including Spain in 1982 and 1990, Colombia in 1991, and the EU in 2004. In 1995, as part of unrelated PTO proceedings, Roederer’s trademark attorneys received an affidavit indicating that Cristalino had been found on sale in California in 1995; the affidavit identified the bottler and included a photo of the bottles. Roederer did not object at the time, though its attorneys did submit an affidavit in response.

In 1997, the CRISTALINO JAUME SERRA mark was published for opposition; Roederer requested two extensions of time to file an opposition, but never did. The application, however, never matured to registration and was deemed abandoned in 2000. (The application was filed as an ITU, for reasons that do not appear obvious from the facts but might have to do with the presentation of the mark on the label.) In 2000, Carrion filed an application to register CRISTALINO, and this one was published for opposition in 2002. Roederer sent letters demanding that Carrion withdraw the application and cease using the mark; it ultimately filed an opposition, then sued, so the opposition has been stayed.

Carrion argued laches. The elements: plaintiff’s knowledge of the use; inexcusable delay; and prejudice to the defendant.

The court quickly disposed of Roederer’s argument that Carrion didn’t stand in the shoes of its predecessors for laches purposes. It owned the goodwill and continued to make the same product. Likewise, Carrion’s importer, though not a trademark owner, had standing to assert laches, just as it would be able to assert a statute of limitations defense (if the Lanham Act had one).

Roederer’s knowledge began no later than 1995, but it waited nearly seven years to object. This exceeds the analogous 6-year statute of limitations in Minnesota, and courts generally borrow analogous state laws for purposes of assessing Lanham Act laches.

The court also found prejudice. During the 7-year delay, Carrion marketed Cristalino, expanded production, and were rewarded by market success. Though Carrion could use its production facilities to make cava under another name, it would lose the benefit of any brand loyalty, which would devastate sales.

Roederer argued that any delay should be excused because the early acts weren’t enough to infringe—a trademark owner has no obligation to sue until there’s a substantial likelihood of confusion, and need not be trigger-happy. For laches purposes, the doctrine of progressive encroachment may require assessing delay from some point after the first instance of infringement, when a defendant comes more squarely in competition with the plaintiff. McCarthy states that, though “a slow, steady increase in the level of business attributable only to the normal growth of any business may not always be sufficient to excuse a prior delay, any change in the format or method of use of the mark or expansion into new product lines or territories should be sufficient to excuse a prior delay.”

The court rejected this argument. Cristalino’s sales have grown over time, but it has outsold Cristal since at least the mid-90s. Carrion’s quality control changed, but there was no evidence of significant changes in the product’s quality. And the label was largely stable by 1993. There was a “mere possibility” that older-style labels were around for some unknown period as inventory was depleted, and an older label may have been featured on the importer’s website for a while, but that didn’t change the court’s conclusion that Roederer should have acted much earlier.

Roederer then argued that laches does not bar injunctive relief. This is sometimes true, and sometimes not. When an injunction would cause substantial prejudice to a defendant’s investment in brand equity, laches may not apply. Here, given the equities, mechanical application of a rule allowing injunctive relief despite laches would be inappropriate.

The court was particularly attentive to Roederer’s minimal evidence of likely confusion; when laches applies, courts generally require strong or elevated proof of likely confusion, and sometimes even a threat to public safety. Here, the evidence was: (1) name similarity; (2) product similarity in that both are sparkling wines sold nationwide; (3) “one incident in which a bottle of Cristalino was sold as Cristal after the label had been altered to obscure the ‘ino’ in Cristalino (comment: I believe Inwood v. Ives has something to say about that); and (4) “photos and written passages taken from the internet featuring individuals discussing both Cristal and Cristalino or pretending that bottles of Cristalino are bottles of Cristal.” Here’s what I found in a quick search: Cristalino, Cristal’s younger, cheaper brother; Cristalino is what Cristal dreams of growing up to become;

from a newsletter for a wine tasting business;
from flickr (caption: not Cristal, but Cristalino!); and
(from Grape Finds, using Cristal Pop as a sort of headline for Cristalino; this is one that Roederer might well want to take up with Grape Finds, which is no stranger to litigation itself).

Roederer also submitted a shopping mall survey of likely buyers of imported sparkling wine who were familiar with Cristal. (Query: proper universe, given Cristal’s actual purchasers? Isn’t that kind of like saying that a Toyota buyer would be a good person to ask about potential confusion over a Lamborghini? Your answer may differ if your theory is dilution—though here I imagine there’d be an insurmountable barrier to proving that Cristal was famous before Cristalino’s use began.)

In any event, the survey began by showing participants a bottle of Cristal. The bottle was removed, and then test cell subjects were shown four other bottles of sparkling wine. They were then asked whether they saw the same brand; whether they saw a wine produced by the same company; whether they saw a wine affiliated with the company that produced the first bottle; and whether permission from the company that made the first bottle was required to produce any of the sparkling wines. (Comment: Those aren’t leading at all, especially in combination! Now, there may not be many better ways to elucidate likely confusion, but I think the repetition here seems likely to drive up “yes” answers in a way that won’t necessarily be controlled for by the presence of a control group. The respondents are prodded to think about whether there’s a connection, and if there’s even a tiny hook to hang that idea on, they may say yes even though they’d never come to the same conclusion in the wild and even though they’ll say “no” when presented with four bottles with no wording similarity. This is perhaps another reason to cut back on our overly expansive concept of “confusion” as any suggestion of affiliation or connection—a concept that broad is too hard to measure in any reliable way.)

Results: “6.9% of respondents believed the bottle of Cristalino was the same brand as the bottle of Cristal, 9.2% believed Cristal and Cristalino were produced by the same company, 4.6% believed the Cristal and Cristalino were produced by affiliated companies, and 2.3% believed that permission from the maker of Cristal was required in order to produce Cristalino.” The court didn’t mention the percentages among the control group. But it considered the survey insufficient, quoting McCarthy’s summary that 25-50% percentages have been considered “solid support” for a confusion finding. Here, in light of the other evidence, the survey showed only a possibility of confusion, not a likelihood.

The dramatically different price points and differences between the names and labels were important factors. Cristal’s distinctive bottle further differentiated the products, and (aside from the case of the altered label) there was no evidence of actual marketplace confusion. And lack of evidence of confusion over an extended period of time is good evidence that there isn’t a likelihood of confusion. Roederer’s internet evidence showed that people recognize similarity between the two names, but none of it showed confusion.

As a result, defendants won summary judgment on laches.

Brand equity and false advertising

Brands we love get special dispensations for bad behavior. Google and Apple are my biggest weaknesses, and I think many people interested in technology are the same. For the latest example, see Richard Alderman's post on the new iPhone, arguing that the supposed 50% price drop is actually a 40% increase when service charges are taken into account, and that this is false advertising. But he (and I) bought it anyway, because it is just that cool. (Disclaimer: I speak only for myself; Alderman I'm sure has better reasons.) Even Tim Wu is willing to tame his freewheeling ways for the love of a good iPhone.

If I had my druthers, the iPhone would allow a stylus as well as a finger, for greater writing accuracy. But then I've been using a tablet PC for several years now, and I like handwriting digital comments. The point is: deliver enough style and performance, and many customers will forgive you on price. The question is, will the lawyers?

Sovereign immunity strikes down another copyright claim

Marketing Information Masters, Inc. v. Board of Trustees of California State University System, 552 F.Supp.2d 1088 (S.D. Cal. 2008)

Plaintiff does marketing research studies. It sued defendants for copyright infringement, conversion, misappropriation, and unfair business practices, alleging that it performed studies on the economic impact of the Holiday Bowl on San Diego, which were memorialized in written reports provided to the Holiday Bowl organization at below-market rates. When plaintiff told the Holiday Bowl organization that it would need to pay market rates for futher studies, the organization allegedly copied and “plagiarized” plaintiff’s 2003 report to prepare its 2004 report.

The state defendants argued they were entitled to sovereign immunity from the copyright claims. The district court, unsurprisingly, agreed despite the existence of the Copyright Remedy Clarification Act, which indicates that state entities are liable for copyright infringement. Under the Florida Prepaid cases, this wasn’t good enough, because there was no Fourteenth Amendment violation to correct, so Congress couldn’t abrogate sovereign immunity. Plaintiff could still pursue the named plaintiff insofar as it alleged that he acted in his individual capacity, however.

The state law claims, likewise, had to be dismissed against the state defendants due to sovereign immunity. Defendants also argued that the state law claims were preempted by copyright law. On conversion, plaintiff alleged that defendants interfered with its ownership of “tangible materials and intangible ideas.” On misappropriation, plaintiff alleged that material not expressly incorporated into its reports was “confidential, proprietary, and trade secret information” that was used in preparing the 2004 report. And on unfair business practices, plaintiff alleged that defendants were unjustly enriched.

Because defendants didn’t make arguments specific to unfair business practices, the court refused to dismiss that claim. (This seems like a pure technical error: unjust enrichment is regularly preempted when the allegations are like this—the claim is that the defendants failed to pay for something within the subject matter of copyright.)

Plaintiff argued that it was seeking protection for “the methodologies for evaluation, the questionnaires developed by Plaintiff, work papers generated while conducting the impact studies and ‘other intangible property and ideas’ not contained in the 2003 survey.” Since the methodologies were turned into results, and the questionnaires and work papers were fixed, I can’t figure out how this possibly averts preemption. And indeed, the court noted that ideas are regularly considered within the scope of the Copyright Act for preemption purposes, though copyright does not protect ideas. Moreover, the allegations made clear that the rights asserted were equivalent to rights protected under the Copyright Act. The conversion claim wasn’t really for return of tangible property, but for damages caused by reproduction. The misappropriation claim didn’t work because there was no allegation of disclosure of confidential information in breach of a specific duty. Plaintiff was, however, given the opportunity to amend.

My take: a business that thinks that “plagiarism” is actionable, and that it can defeat sovereign immunity, is unlikely to succeed in its next bite at the apple.

Term extension in Europe: just as bad an idea across the pond

Lionel Bently passed on this letter to the Times about the proposed term extension, signed by a large number of prominent scholars:

The proposed Term Extension Directive will alienate a younger generation that fails to see a principled basis

Sir, Europe’s recorded music was about to experience a wave of innovation. For the first time, a major set of culturally important artefacts was to enter the public domain: the sound recordings of the 1950s and 1960s. Apparently not so. If the European Commission has its way, re-releases and reworkings of recorded sounds will remain at the mercy of right owners for another 45 years (report, July 17). Why?

The record industry succeeded to supply the Commission with evidence that was not opened to public scrutiny: evidence that claims that consumer prices will not rise, that performing artists will earn more, and that the record industry will invest in discovering new talents, as if exclusive rights for 50 years had not provided an opportunity to earn returns.

The Commission’s explanatory memorandum states: “There was no need for external expertise.” Yet, independent external expertise exists. Unanimously, the European centres for intellectual property research have opposed the proposal. The empirical evidence has been summarised succinctly in at least three studies: the Cambridge Study for the UK Gowers Review of 2006; a study conducted by the Amsterdam Institute for Information Law for the Commission itself (2006); and the Bournemouth University statement signed by 50 leading academics in June 2008.

The simple truth is that copyright extension benefits most those who already hold rights. It benefits incumbent holders of major back-catalogues, be they record companies, ageing rock stars or, increasingly, artists’ estates. It does nothing for innovation and creativity. The proposed Term Extension Directive undermines the credibility of the copyright system. It will further alienate a younger generation that, justifiably, fails to see a principled basis.

Many of us sympathise with the financial difficulties that aspiring performers face. However, measures to benefit performers would look rather different. They would target unreasonably exploitative contracts during the existing term, and evaluate remuneration during the performer’s lifetime, not 95 years.

We call on politicians of all parties to examine the case presented to them by right holders in the light of independent evidence.

Anyone remember back in Eldred, where US term extension was justified on the ground of "harmonization"? This term extension business reminds me of nothing so much as the Sesame Street sketch in which Ernie tries to make sure that both he and Bert have the same size slice of pizza and the same amount of grape juice; he does this by eating some of whichever slice is bigger and drinking some from whichever glass has more, and since he always overshoots a bit, he ends up consuming it all.

Here's hoping Europe doesn't accept Ernie's flimflam.

Synecdochic on why monetizing social media through advertising is doomed to failure

A very interesting argument, in three parts: one, two, and three. Not ironically--because the alternative platforms are in the same situation--she's using Livejournal as her platform, and Livejournal is struggling with exactly the problems she describes, though she draws her examples from elsewhere.

New article on trademark use

Margreth Barrett has posted Finding Trademark Use: The Historical Foundation for Limiting Infringement Liability to Uses 'In the Manner of a Mark' on SSRN. Interested readers may also wish to consult this compilation of links to articles on trademark use.

Satire, and fair use of satire

I like this NYT article on whether the recent New Yorker cover is satire in a traditional literary sense. But the topic intersects with IP when it comes to other cartoonists' responses to the cover. The variety of ways in which they address the Obama cover demonstrate why fair use requires broad latitude in its targets and its approaches. Here's a link to a collection of responses. They are all clearly using the cover, but articulating how every one of them is criticizing the cover is harder (though, to be fair, easier than explaining why the original cover was a satire). Nonetheless, they're all obvious fair uses, even if turning the pictures into words is sometimes difficult. Here's a really easy one, which I like because it's an instance in which pure copying becomes criticism:

Bonus question: how do the cartoons that copy The New Yorker's name and/or font fare under Rogers v. Grimaldi and the like? Are they literally false designations of origin? Or would we want to say that here, there's no trademark use/use as a mark?

At last, multimillion-dollar award in Satanic rumor case

Procter & Gamble Co. v. Haugen, 2008 WL 2736875 (D. Utah)

Earlier rounds in this case (about an Amway distributor’s reiterations of false rumors about Procter & Gamble’s connections with Satanism) resulted in an important ruling on the scope of “commercial speech” under the Lanham Act. At long last, the case went to trial, with a $19.25 million verdict for P&G. Defendants moved for judgment as a matter of law and for a new trial. The court rejected all their arguments, including a challenge based on post-verdict juror statements and numerous claims directed at the jury instructions.

The broadest legal arguments defendants made concerned whether P&G had adequately proven damages. According to defendants, recovery of damages required proof of actual consumer deception. However, given that it was undisputed that the Satanism claim was literally false, there was a presumption of actual confusion. The court ruled that, without evidence rebutting that presumption, P&G didn’t need to present further evidence. Defendants contended that the presumption only applied to claims for injunctive relief, but the court disagreed. (There was also some survey evidence, though its weight was disputed.)

As a general matter, I think it’s a mistake to drive the treatment of literal falsity and misleading claims so far apart in terms of what burdens a plaintiff has—it puts too much of a premium on drawing a line on what is actually a continuum, not a clear divide. Presumptions are useful and are often better than requiring expensive and uncertain proof of the fairly obvious, but I’m more comfortable with a presumption of harm in injunction cases than in damages cases.

Defendants also argued that there was insufficient evidence of proximate causation. But aside from the survey, the false Amway message targeted a specific product list, and P&G submitted evidence that sales of those products grew at a “substantially lower rate” than those of P&G’s other products. Though other causes might have accounted for this, the jury was able to weigh the possibilities. The fact that P&G continued to experience growth was not dispositive: the Lanham Act protects profitable companies and products whose sales are increasing; a damage award requires proof of damage, not “complete economic reversal.”

Defendants then argued that the Amway message wasn’t sufficiently disseminated to the relevant purchasing public to count as “commercial advertising or promotion.” They argued that P&G’s market is nationwide, even worldwide. Thus, distributing the false rumor to only a few hundred or thousand people was insufficient.

P&G responded that the relevant purchasing public was Amway distributors. The Tenth Circuit, years ago, found that there was a genuine issue of material fact on “commercial advertising or promotion” due to “the uncertainty as to the number of Amway distributors-part of the ‘relevant purchasing public.’”

The broader question was whether the false claims at issue were disseminated sufficiently to the relevant purchasing public to constitute “advertising” or “promotion.” In the Tenth Circuit, covered speech need not be made in a classic ad campaign, but can be more informal, and a “relatively modest” amount of activity may suffice in a particular context. But some level of public dissemination is necessary. Other cases look to the market the defendant sought to target, which can be key when the defendant is an intermediary or, as here, a multilevel marketer.

In the context of a business that relies exclusively on promotion by sales reps, distributing claims to a large distributor/sales rep group—as occurred here—constituted “advertising and promotion.” The false message had “limited but significant distribution” using an established communication system routinely used by Amway distributors in their businesses. Haugen, the person who put the rumor into the Amway system, forwarded it to his “frontline distributors,” who in turn forwarded it to their frontline distributors. In fact, it was expected that each distributor would immediately pass such messages on down through the marketing levels “to reach and motivate the broadest possible audience.” And P&G had evidence that Haugen’s use of Amway’s system was successful: the message spread through his network of 60,000, then through many states, then crossed over into two other distributor networks, where it spread further. Consumer calls to P&G about the issue spiked. Churches announced the rumor from the pulpit, and someone printed and distributed flyers repeating it. The evidence of lost sales growth was further evidence that a substantial number of consumers were influenced by the false rumor, and thus that it was significant enough to count as advertising or promotion.

In sum, the court concluded with a flourish, “[t]he issue is not, as Defendants argue, whether any specific percentage of the customers in this nation’s consumer goods market received the Amvox Message. Under Defendants’ reasoning, when the company was as large as Plaintiff, nothing short of an advertisement during the Super Bowl could be found to have reached a large enough percentage of customers to be disseminated sufficiently to establish a Lanham Act violation” (footnote omitted). The jury’s conclusion was supported by the evidence.

Defendants also sought remittitur, arguing that $19.25 million was so excessive as to shock the conscience and was overwhelmingly against the weight of the evidence. A losing defendant faces a “steep uphill climb”; the court should allow the award to stand unless no reasonable jury could have come up with it. Even where the defendant’s story of why the damage award was contrary to law is “persuasive,” the possibility of a proper award, “[h]owever slight the chance,” requires the court to sustain the award. Here, the defendants argued that the amount represented only out-of-pocket expenses and was thus unreasonable. But that was based on inadmissible post-trial juror statements which could not be used to impeach the verdict in any way, including by attempting to show that the damages were awarded on an improper basis.

Indeed, P&G presented damage estimates running from $62 million to over $544 million. Thus—even with the uncertainty that might be generated by that great range—there was more than a mere “possibility” of a proper award. In fact, the award was fairly moderate, given the evidence.

And so, perhaps, this “bitter” case has neared its end.

Your cover is a weapon

This Slate piece on Jay-Z's performance of a cover of Wonderwall as part of a dispute with Oasis about the legitimacy of rap music is yet another instance of copying as critique. Tori Amos did it in Strange Little Girls, remaking men's songs about women; Jay-Z, Jonah Weiner argues, "weaponized" the cover by butchering it. (Judge for yourself here.) He continues:

Jay-Z's sarcastic "Wonderwall" illustrates a deeper truth about cross-genre covers in general (indie boys covering teen starlets, lounge lizards covering metalheads, bookish singer-songwriters covering R&B Casanovas, etc.): These songs often contain a thorny tangle of value judgments, power dynamics, and aesthetic agendas. Unlike polyglot MP3 blogs, mash-ups, and the iPod's shuffle function—all of which enable exhilarating collisions and unlikely harmonies between different sounds, reflecting a digital-era erosion of musical boundaries—cross-genre covers don't necessarily reflect anything so utopian. The seemingly neutral act of singing someone else's song can function as an argument, a slap, a grenade toss.

... Snobbery animates many cross-genre covers. Alanis Morrissette's best song in years was her 2007 re-envisioning of the Black Eyed Peas' giddily inane "My Humps."

That something is critical, of course, doesn't make it right or good. It just makes it critical:

A band as ridiculous as Oasis can sustain—deserves, even—all sorts of mockery. By contrast, there can be something smug and unseemly about indie-rock jabs at big-money pop. One wonders why Ben Gibbard bothered with his live cover of Avril Lavigne's "Complicated" if he was going to snicker so much throughout it. "No, no, it's a serious song!" he shouts in false protest when the crowd snickers, too. With his band Death Cab for Cutie, Gibbard spares no syllable in his quest to detail even the most trivial emotional state; his goal here seems to be to fault Lavigne for failing to bring the same nuance to her pubescent social drama. "The thing about that song I love is, I don't really understand what's so complicated!" he says to rapturous laughter when the cover is done. "It seems pretty cut-and-dry!" There's something genuinely admiring in parts of his performance, but it's smothered by a greasy layer of condescension.

.... Even homage ... can involve a form of snobbery. For a while, the British rock group Travis included a cover of Britney Spears' "Hit Me Baby One More Time" in its set list. Travis' version wasn't mocking, but—intentionally or not—the cover carried a patronizing subtext: that the ProTooled pop ditty needs an honest-to-goodness rocker to ride along, scrub away the deadening Top 40 luster, and exhume the fine song hidden beneath. Rather than break down aesthetic prejudices, such covers can reinforce them, implying that the so-called frivolous pop song has value but that this value is only revealed and affirmed in an "authentic," rock-based iteration.

It's hard enough to identify criticism, especially in the current media environment. Staying away from good/bad or fair/unfair judgments of the copier is difficult, but important in any fair use assessment.

NYT on disputes over art auctions at sea

According to the story, there are pending claims against the auction house for false advertising and unfair trade practices; also of note is that the auction house sued a persistent internet critic for defamation. The claims and counterclaims fly indignantly and the reporter's relish in reporting these conflicts is evident:

Park West’s suit against Fine Art Registry revolves in part around the Web site’s allegations that the company’s Dalí prints are inauthentic. The suit quotes, for example, a Fine Art Registry interview in which Mr. Hochman said of the signatures on these pieces: “They’re all the same. And we feel they’re done with an auto pencil device.”

Mr. Scaglione called those assertions “bogus.” He cited the credentials of his Dalí appraiser, Bernard Ewell, and described his Dalí material as “perfectly” authenticated — “our documentation is sometimes five or six inches thick.”

When asked about the Dalí expert Mr. Field’s exclusion of certain “Divine Comedy” prints with pencil signatures, Mr. Scaglione said, “That man was so senile at the end of his life, it’s insane.” (Mr. Field died in 1998, two years after the catalog was published.)

Mr. Scaglione also dismissed Mr. Field’s “official” catalog as “the most unofficial thing you can imagine,” adding that there are “150 well-known fakes in that book” that are presented as authentic.

Frank Hunter, Mr. Field’s successor at the Salvador Dalí Archives in New York, countered indignantly in a telephone interview, “That is absurd,” adding with emphasis, “I’d like him to show me one.”

So exactly how much emphasis do you have to use to get a NYT reporter to use italics in your quote?

Fanwork-related links

I just did an interview with NPR on fan fiction and the Organization for Transformative Works. There's also a piece by Grace Westcott on the same topic in the Literary Review of Canada with some quotes from me; we don't necessarily see the world in the same way, but a Canadian perspective is welcome.

Meanwhile, the Code of Best Practices for Fair Use in Online Video, in whose drafting I participated, has been released. Many different kinds of creations were represented in our discussions, including fanworks. The Center for Social Media has many similar valuable projects, and I'm encouraged to see growing activism in staking claims for fair use counter to the we-own-it-all attitude of some copyright owners. Formalizing informal practices, which have a lot of flexibility and local norms, is always a challenge, but I don't think we can continue without speaking at least some of the time about good copyright rules, counter to the claims of institutional advocates for total control like the RIAA, MPAA, and lately the AP.

Tiffany, blue

US IP blogs are abuzz with the Tiffany’s v. eBay case. It’s certainly a major victory for eBay, and by extension perhaps numerous other internet services. The nominative fair use determinations for eBay’s on-site banners and off-site search engine optimization are particularly welcome. The decision on secondary liability seems well-reasoned to me. Eric Goldman does a general reaction post that touches all the bases.

I do want to point out, however, just how much Tiffany’s got out of eBay by pressure, in particular eBay’s willingness to prohibit “Tiffany style” and “inspired by Tiffany” in ads (with, as best I can tell by searching on eBay’s site, an exception for a “Tiffany-style setting” for diamond rings). This is troubling because “Tiffany style” is in itself an acceptable nominative use for certain products that are like, but are not, Tiffany jewelry. The presence of the word “style” means that initial interest confusion, that despicable animal, is unlikely. And the possible claim that “Tiffany style,” while not confusing to the buyer, would lead to post-sale confusion depends on the argument that the design of every piece of the underlying jewelry is protected by trade dress, an argument Tiffany’s did not make in this case. Of course, it may well be the case that “style” was so often a signal of counterfeit status that a ban was in order, but the evidence recited by the district court didn’t go to that.

The lesson is that eBay, like other internet aggregators, is interested in its own welfare, not in the maximum efficiency of the competitive system or in justice. So it will fight overreaching trademark claims precisely to the extent that it makes business sense to do so, and no further, just as our beloved Google prohibits even nominative fair use of other parties’ trademarks in the text of sponsored ads. (Speaking of our beloved Google, Scott Westerfeld’s recent novel So Yesterday has a narrator who’s sworn off mentioning famous brands in order to fight their famousness, but even he makes an exception for Google, because, he says, his story wouldn’t get very far without the ability to use the verb—and the search engine. That’s brand power, and it’s also why genericide has functionally disappeared for fanciful marks.)

Now, a bit about dilution: (1) The court adopts the interpretation that dilution requires that a defendant to use the mark to identify its own goods or services, which eBay didn’t do. (2) I found it amusing that the court’s careful discussion of the potential divergence between state and federal dilution law created by the very different wording of the TDRA ends with the same time-saving conclusion as every other court: might as well consider them together! And really, who’d want to do two dilution tests? (Who’d want to do one?)

Last, because my niche is advertising law, a word about the false advertising claims: The argument was that eBay advertised the availability of Tiffany jewelry, but, given the high percentage of counterfeits for sale on the site, that was as false as advertising that a model of car gets 35 mpg when only 25% of the actual cars do so. The court rejected this argument, and the basic intuition is similar to the one that’s hampered post-Dastar claims about false attribution as false advertising: when one’s core claim sounds in trademark, §43(a)(1)(B) should not serve as an end run around the requirements of trademark law.

Since authentic Tiffany jewelry was for sale on eBay, the claims were not literally false even if a buyer was more likely than not to get a counterfeit piece. Comment: Were it not for the trademark overlap, I’d find this a dubious conclusion, given the car analogy above. But, as the court pointed out, it had already found that the use of “Tiffany” was a protected nominative use.

In terms of implicit falsity, the court held that Tiffany’s claim depended on eBay’s knowledge of high counterfeiting levels. Again, as false advertising doctrine, this is wrong—false advertising is strict liability. But it is common in §43(a)(1)(B) cases brought over threats of patent infringement to hold that only knowingly false claims made about patent rights can be false advertising, while sincere but wrong claims are not actionable. Intent/knowledge here play the role of boundary markers more than elements of a false advertising cause of action: these subjective elements manage the scope of patent rights, or trademark rights, and are not true measures of whether false advertising has occurred in the abstract.

Finally, the court found that the false advertising was sellers’ responsibility, not eBay’s. Again, I don’t think much of this, to the extent that eBay itself chose to advertise the term “Tiffany & Co.” However, insofar as the court was suggesting a secondary liability analysis for false advertising in the context of online auctions, that makes more sense—just as eBay is not directly liable for trademark infringement by counterfeiters, it’s not directly liable for false advertising by sellers of bad merchandise.

The conclusion “it cannot be said that eBay was misleading customers when eBay was diligently removing listings from the website that were purportedly counterfeit” sounds factual, but it’s actually normative: it is logically possible and even plausible that buyers were misled despite eBay’s policing (and perhaps in part because of it)—indeed, the record contained numerous emails from buyers complaining about counterfeit Tiffany sales that slipped through the screening; such buyers were materially misled by the listings’ claim to offer authentic Tiffany jewelry. Nonetheless, the court was unwilling to impose liability. One way to think about this might be materiality: given the availability of authentic Tiffany merchandise on the site, there wasn’t a sufficient connection between eBay’s general advertising that Tiffany items could be found on the site and any particular auction listing.

FTC prevails against false green tea claims

Federal Trade Commission v. Bronson Partners, LLC, -- F.Supp.2d --, 2008 WL 2698673 (D. Conn.)

The FTC brought an enforcement action against defendants for the claims made in their ads for Chinese Diet Tea and the Bio Slim Patch. Since defendants conceded liability on the Bio Slim Patch, the court only considered the ad claims made for Chinese Diet Tea, touting it as a weight-loss product. “[W]hen read objectively and in context,” the advertising “virtually guarantees the user that, by drinking the tea, the user will lose large quantities of weight in a relatively short period of time without dieting or exercising.”

The tea, however, is not materially different from any other green tea product on the market.

Defendants nonetheless advertised that the tea “SHEDS POUND AFTER POUND OF FAT-- FAST!” while allowing users to eat their favorite foods. The exemplar ad claimed that the tea “eliminates an amazing 91% of absorbed sugars[;] [p]revents 83% of fat absorption; [d]oubles your metabolic rate to burn calories fast”; et cetera. The ad went on to claim that “clinical trials” proved the weight loss claim (163 patients, all of whom lost between 18 and 75 pounds over 12 weeks) and to “guarantee[]” the weight loss. It offered “courses” of varying lengths, promising “You’ll lose up to 25 lbs” for the shortest and up to 75 pounds for the longest. There were also a number of testimonials claiming significant weight loss, including “After 10 weeks my weight was down to 104 lbs. I lost weight so fast my doctor ordered me to slow down” and “I have been on the program 6 weeks and have not religiously followed the schedule of a cup of tea after each meal. However, I have gone from 240 lbs. down to 210 lbs.”

Defendants, with the same bald-facedness that characterized the ads, argued that the ads didn’t make the false claims that the FTC alleged. First, they argued that some of the claims were “merely testimonial.” But that doesn’t render it weightless. Indeed, the FTC has long held that a testimonial is an implicit representation that the person providing it had a typical experience with the product. Nor does the case law (or common sense) suggest that consumers interpret testimonials with a more jaundiced eye than they do the rest of an ad.

Then, they argued that the FTC was required to provide extrinsic evidence of consumer perception. This was wrong on a number of levels. No extrinsic evidence is ever required when the claims at issue are express. (In a footnote, the court suggested that, as a matter of logic, all claims that are necessarily true if the express claims are true are necessarily implied by an express claim—thus, a claim that a car gets 30 mpg necessarily implies that the car gets “more than 10 mpg.” This seems to me true but not all that important, except insofar as defendants were ridiculously parsing the FTC’s expression of the claims made by their ads. It isn’t really what the doctrine of necessary implication in the Lanham Act covers; that doctrine is more about applying my favorite Gricean maxims of relevance, quality, etc.)

Moreover, even when claims are implied, the FTC is not necessarily required to submit extrinsic evidence of deceptiveness. The FTC can find that reasonably clear implied claims are conveyed to the audience by using common sense and administrative experience, as the Seventh Circuit held in its Kraft case. (I think this rule would make sense for some obvious implied claims in Lanham Act cases as well; in fact, that is some of what the necessary implication doctrine does—it adds common sense to the mix.)

And, regardless of one’s view of the law, the court had no doubt that the ad made the alleged claims: “The advertisement is not subtle. It does not employ innuendo, subliminal messages or hints to convey its message. It does not contain conflicting messages that are reasonably susceptible to different interpretations. It makes no meaningful qualifications. Instead, it is clear, stark and dramatic. Only four words in the entire advertisement do not relate to weight loss in some way: ‘makes great iced tea’” (footnote omitted).

Defendants argued that their “guarantee” was a “satisfaction” guarantee, not a weight loss guarantee, but “satisfaction” doesn’t appear anywhere in the ad, while weight loss claims do: e.g., “[a]ll participants lost between 18 lbs and 75 lbs over the 12 week period. If you do not lose similar amounts of weight we guarantee to refund your purchase price in full.” (Defendants never produced any evidence that any such clinical trial was conducted.) I should note that this is an instance in which easy cases might make bad law: even had the word “satisfaction” appeared in the ad, it would still have been a false representation of guaranteed weight loss.

To see what else the district court had to put up with, consider defendants’ argument that “SHED [ ] POUND AFTER POUND OF FAT--FAST!” only meant “at least two pounds,” since “pound” after “pound” makes two pounds. “Unreasonable,” the word the court used for this interpretation, seems charitable.

Defendants tried to highlight the ad’s statement that “drinking Chinese Green Diet Tea is not a license to gorge yourself.” But that isn’t close to the truth, which is that you’d still need to diet and/or exercise to lose weight. Even if it were true, “one true statement, in the presence of a mass of false and misleading statements, does not render an otherwise misleading advertisement non-misleading.”

So, the ad made the functional equivalent of the claims as the FTC stated them: clinical proof of rapid and significant weight loss for all users, without increased physical activity or decreased caloric intake, and while consuming high-fat and high-calorie foods such as “sweet buns and chocolate” (mmm, chocolate), as well as a fat- and sugar-blocking effect.

Defendants then argued that these claims were not false or misleading, because green tea promotes weight loss. They retained a professor from the University of Wisconsin-Madison, Dr. Hasan Mukhtar. His expertise is primarily in dermatology and cancer research, and he has no significant nutrition-related education or experience. Nonetheless, he was offered as a leading expert on green tea.

Mukhtar’s report suggested that green tea could be a useful part of a weight-loss program; that green tea helps reduce sugar and fat absorption; and that green tea increases metabolic rates. He concluded that green tea consumption “could” lead to weight loss. He relied on studies showing potential effects on various metabolic processes, including studies performed on rats and mice. One study was actually a double-blind placebo test on 46 women; it found “modest weight loss” from green tea.

This was all very nice, but even if true (which was unclear at best), nothing in this report supported the claims actually made by the ad. At deposition, Mukhtar even said that the ad’s claims were too strong. The ad claims themselves were either completely unsubstantiated or patently false—there were no clinical trials, no evidence that green tea eliminated most sugar and fat absorption, and no evidence of fast and significant weight loss in people. As the FTC’s expert noted, the claims were simply beyond the realm of scientific plausibility.

Blatant lies can work on people desperate for solutions they haven’t found elsewhere; this is why we need consumer protection law.

The real story of the superheroes

This photo essay shows Mexican immigrants in well-known superhero costumes. Photographer Dulce Pinzón wanted to raise questions about our definitions of heroism and the invisibility of immigrant labor. The title, "The Real Story of the Superheroes," shows that when it comes to titles and other expressive uses of trademarked icons, only words as explicit as "authorized" and "official" ought to trigger any control by the trademark owner. Reality and truth are for all of us.