Nothing's certain but death and taxes

And class actions, of course.

Laster v. T-Mobile USA, Inc., --- F.Supp.2d ----, 2005 WL 3610616 (S.D.Cal.)

In this putative class action, the plaintiffs asserted that defendants -- cellphone companies and other sellers of wireless telecommunication services -- engaged in the unfair and deceptive practice of charging consumers sales tax on the full retail value of cellphones that were advertised as "free" or at substantial discounts, in violation of California's Unfair Competition Law and False Advertising Law. Plaintiffs sought damages and injunctive relief under the Consumer Legal Remedies Act. Their state-law complaint was removed under CAFA.

Underlying facts: Cellphones are often sold as part of a bundled transaction: a free or discounted phone along with a service contract for a specified length of time. When the defendants offer the bundle, however, they generally charge sales tax of approximately 7.75% based on the full retail value of the phone. (For one representative plaintiff, this amounted to $10.31 in tax; for another it was $28.22.) Plaintiffs object that a free phone shouldn’t have any sales tax, and that the tax should be calculated on the discounted price when the phone is sold at a discount. I have to admit, this objection seems quite reasonable to me; I certainly don’t expect to be charged full-price tax on a sale item.

But this is a class action, so the legal analysis is not going to focus on the merits of the underlying claim. The contracts for the bundled phones, to which the plaintiffs agreed, included an arbitration clause that requires arbitration but bans class-wide claims in that arbitration. The Federal Arbitration Act (FAA) has a pro-arbitration policy, so the questions for the district court were whether a valid agreement to arbitrate existed and whether it encompassed the dispute at issue. But wait! Despite the federal policy favoring arbitration, state law controls issues of contract validity and enforceability. Generally applicable defenses such as fraud, duress, or unconscionability, may be applied to invalidate arbitration agreements, though the court is limited to determining whether the arbitration clause itself is unconscionable.

A contract of adhesion – a standard consumer contract imposed by the party with superior bargaining power – is unconscionable when both procedural and substantive unconscionability are present, though the amount of each required will vary with the strength of the showing on the other. Procedural unconscionability comes from oppression and surprise; oppression comes from inequality of bargaining power and an absence of meaningful choice on the weaker party’s side. Surprise comes from the extent to which the terms of the bargain are hidden in a wordy form drafted by the stronger party.

The defendants contested procedural unconscionability on the grounds that plaintiffs had meaningful choices – there were other cellphone companies on the market, including some that don’t insist on arbitration. The Ninth Circuit, however, has already rejected this very argument in Ting v. AT&T. Under Ting, take-it-or-leave-it consumer contracts are deemed to be procedurally unconscionable. The court reasoned that the T-Mobile contract at issue fell on the higher end of the unconscionability spectrum, since the arbitration provision was buried in a 52-page “Welcome Guide” that was only available to the plaintiff after she’d signed the contract. Cingular’s arbitration clause was a closer call – the plaintiff got the service agreement specifically mentioning arbitration at the time of purchase. Thus, it was on the low end of the unconscionability spectrum.

As for surprise, it’s clearly present in the T-Mobile contract. Though the Cingular service agreement talks about arbitration, it doesn’t mention the terms or the ban on class-wide claims; those elements can only be determined by reading pp. 10-12 of Cingular’s 13-page terms of service booklet, so a “modicum” of surprise is present.

Substantive unconscionability is the remaining hurdle. Plaintiffs argued that a contract by which consumers waive class action rights is subsantively unconscionable, based on the California Supreme Court’s ruling in Discover Bank v. Superior Court of Los Angeles, 30 Cal.4th 148 (Cal.2005). Defendants responded that Discover Bank didn’t hold all such arbitration provisions unconscionable, and if it did, it would be preempted by the FAA.

Discover Bank held a waiver of class-wide arbitration to be unconscionable in an adhesion contract when (1) disputes between the parties would predictably involve small damages, and (2) plaintiffs alleged a scheme by the more powerful party to cheat large numbers of consumers out of small sums. In such cases, the waiver becomes in practice an exemption from responsibility for fraud and willful injury. Applying this two-prong test, the court found substantive unconscionability. Notably, prong (2) is satisfied by plaintiffs’ allegations; they need not provide evidence at this time.

Gee, that test looks like it would invalidate class-wide arbitration waivers in most consumer contracts! Thus, the preemption argument. The FAA makes arbitration agreements enforceable except on grounds that would apply to any contract. Because the Discover Bank rule is not one of general applicability, the defendants argue, it’s preempted. The California Supreme Court found that, to the contrary, the determination that a class-wide bar is (usually?) unconscionable involves general principles of state law; it just so happens that those principles will often apply to this type of contract, as they might to any class of unconscionable contracts. The district court here agreed.

Defendants also had a motion to dismiss, so we do get some discussion of the merits of the claim. Under the newly amended unfair competition law, plaintiffs have to allege (1) actual injury (2) caused by the defendants’ false advertising. The court found that plaintiffs adequately alleged injury, but not causation. Plaintiffs claim to have been harmed by a variation on bait and switch – lured in based on promises of free phones, then induced to pay. But plaintiffs failed to allege reliance on the offer of free/discounted phones – no named plaintiff alleges seeing, reading, or in any way relying on the ads. The unfair competition claim was dismissed with leave to replead.

Plaintiffs’ Consumer Legal Remedies Act damages claim was also dismissed – with prejudice – because they failed to give defendants thirty days notice before beginning an action for damages, as required by law so that defendants can have an opportunity to fix the problem without litigation. Strict adherence to the notice requirement is necessary to further the statute’s aims.

Attracts deer but also false advertising claims

Wildlife Research Center, Inc. v. Robinson Outdoors, Inc., -- F.Supp.2d --, 2005 WL 3676530 (D. Minn.)

This case resulted in a judgment of $4.8 million, plus prejudgment interest, based on the defendant’s false advertising, business defamation, and product disparagement for hunting products – a human scent elimination spray and a doe-urine-based attractant. Monetary awards in Lanham Act cases are reasonably rare, but in this case the jury apparently felt that years of false advertising had taken their toll on the plaintiff, and awarded both damages for lost business and the defendant’s profits. Although the awards on the Lanham Act and state-law claims were duplicative, prejudgment interest was available on the state-law claims and was awarded accordingly.

Lanham Act recovery may include both actual damages and the defendant’s profits, though the total recovery is subject to principles of equity and must constitute compensation, not a penalty. In this case, the duration of the false claims, the damage to the plaintiff, and the defendant’s knowledge that its claims were false justified the award. In addition, though the defendant argued that recovery of profits is only allowed for willful violations of the Lanham Act, the court ruled that the 1999 amendment to §1117(a) abrogated earlier case law imposing a willfulness requirement: The law used to allow recovery for “a violation under section 1125(a) of this title,” but now it reads “a violation under section [1125(a)] of this title, or a willful violation under section [1125(c) (dilution of famous marks)].” The contrast makes clear that willfulness is not required for an award of profits in a false advertising case.

Northeast Mississippi Daily Journal, corrupter of youth?

The paper solicited youngsters to write in with their versions of the seventh Harry Potter novel. Inducement to infringe the derivative works right? They might as well have renamed their publication Newspapster!

Self-blurring?

Slate on Ford Fusion ads that look like iPod ads. This post was going to be called "Initial interest confusion, thy name is Ford," but at the bottom of the article, the reporter notes that Apple gave permission.

Ford's car communications manager says, "the iPod is so iconic that people stop to watch the ad." To which the reporter points out, "Yes. Because people think it's a new iPod ad. And iPod ads are often fresh and entertaining. When it turns out to be an ad for a midsize sedan, I imagine that people mostly lose interest." I'm not a big fan of the initial interest confusion doctrine, yet I agree that maybe this wasn't the best use of the brand on Apple's part.

In a future dilution action against one of the many businesses that use the iPod in advertising, should this be evidence that the mark is already diluted? Even though Apple granted permission, and thus there's no infringement, promiscuous use may still dissipatet he special attributes of fame for dilution purposes. (Compare to the idea of self-tarnishment, as in these dual-authorized rivalry figurines.)

I may be able to teach my dilution classes entirely with Apple/iPod examples.

No publisher liability for false specialization claims

American Association of Orthodontists v. Yellow Book Usa, Inc., --- F.3d ----, 2006 WL 162979 (8th Cir.)

The American Association of Orthodontists (AAO) is a trade association for, unsurprisingly, orthodontists, who have specialized training beyond that of general dentists. The defendant publishes yellow pages directories that list, by category, businesses and professionals who pay to be listed. Its Missouri publications included separate listings for “Dentists,” “Dentists-Orthodontists,” and “Orthodontists (Straightening-Braces).” The AAO sued for violation of the Lanham Act because Yellow Book listed general dentists under the last two categories, which allegedly was likely to confuse and deceive consumers about the qualifications and expertise of the listed dentists. (The AAO alleged that it was, among other things, a violation of the American Dental Association’s Code of Professional Conduct for a general dentist to claim a specialty without the requisite education.)

The court of appeals ruled on two independent grounds. First, dentistry is a heavily regulated profession of which orthodontics is a subspecialty. If it is not illegal in Missouri for a general dentist to perform orthodontic services, the court reasoned, finding a Lanham Act violation in this case would usurp the function of the state licensing authorities.

This seems to be missing a step – it could be unlawful for a general dentist to advertise a speciality without additional qualifications even if s/he could perform specialized services. Nonetheless, if it is legal for a general dentist to claim to be an orthodontist even if s/he hasn’t completed extra training, then finding for the AAO might conflict with the state regulatory scheme. Later in the opinion, the court refers to the lack of a state-law ban on “general dentists holding themselves out as orthodontists,” which seems to be the right standard.

Even so, it would be nice to know more about the state regulatory scheme. Though there may not be a formal requirement for further training before dentists can advertise as orthodontists, if the AAO could prove consumer deception, the state's policy might not be in conflict -- only if the state deliberately decided to allow broad dentist advertising would there be a problem. (Query whether the Lanham Act would preempt any such state rule; given the traditional state role in regulating medicine, probably not, but a state policy allowing total freedom of advertising in other fields might well be preempted.)

Even had the complaint stated a claim, the court ruled, AAO lacked standing. From a trademark perspective, even assuming that consumers would mistake a listing under “Dentists-Orthodontists” as a false endorsement or association with the AAO, the relief sought -- an injunction against listing general dentists under that category – would not redress the injury alleged, which was public confusion over whether the AAO endorses the Yellow Book listings.

Moreover, despite the broad language of §1125, most circuits have long held that non-trademark false advertising claims are limited to competitors. Even under a more expansive, antitrust-like test, Yellow Book provides only an advertising medium to individual dentists, who would be the proper defendants. As the court notes, though, this isn’t exactly a point about standing.

I'm a little surprised that there was no discusion of 15 U.S.C. § 1114(2), which provides for injunction-only remedies against publishers who innocently print matter in violation of § 43(a). Though that limitation is mostly targeted towards trademark infringement, it clearly contemplates other violations of § 43(a) such as false advertising; it limits “the remedies given to the owner of a right infringed under this Act or to a person bringing an action under section 43(a)” (emphasis added), suggesting that you don’t need a trademark “right” for this section to apply. This provision implies that a false advertising cause of action against a publisher would exist, though damages would be unavailable.

When the moon hits your eye like a big pizza pie ...

... it could be a jab from a disgruntled family member.

Rosati's Franchise Systems, Inc. v. Rosati, 2006 WL 163145 (N.D.Ill.)

Rosati’s Franchise is a family business of pizza restaurants. The corporate plaintiff has federal registrations for “Rosati’s Pizza” and related marks; it has ten director/shareholders, all of whom are family members. Frederic, Michael, William, and Jeffrey Rosati, the first three of whom are minority director/shareholders, are the defendants in this trademark and false advertising case.

As a result of disputes between the majority and minority Rosatis, the shareholders agreed to split exclusive territorial rights. Rosati’s Franchise agreed to cease franchising and instead issue licenses to each of the shareholders to use and sublicense the Rosati marks and recipes (which are claimed as trade secrets). After this agreement, the shareholders created a marketing cooperative to advertise the individual pizza stores, both existing franchises and new licensees. All ten shareholders used the cooperative to market the 140 Rosati’s.

In 1999, “a website was created” – I use the passive voice because that’s how the complaint says it – at rosatispizza.com (warning: plays music). It listed the names of all Rosati’s nationwide. A third party owned the domain name.

In 2005, unbeknownst to the majority, the minority shareholders purchased rosatispizza.com and rosatis.com from the third-party owners. Soon thereafter, the family rift became open, and the minority group’s lawyer sent a letter to one of the majority Rosatis, stating that rosatispizza.com would be revised to list only the locations owned and controlled by the minority. And indeed, the 94 Rosati’s stores franchised or licensed by the majority were taken off the site.

As a result, the plaintiffs alleged, both customers and licensees had expressed confusion and anger, which had resulted in a substantial loss of business and goodwill. Moreover, because the website was changed, they were forced to pull ads because their Rosati’s stores weren’t listed on the site named in the ads.

Moreover, at the time the complaint was filed, a message appeared on the listings for Arizona restaurants:

Note to our valued customers:

… In 2001 a second group started licensing the Rosati name to independent owner operators. Due to the high number of complaints received at this web site in relation to locations controlled by the second group, we want to make it clear that the Original Valley Owners have no ownership or authority over locations that use the Rosati name that are not listed on this web site. Any complaints for locations not listed on this web site should be directed to that location and should be resolved by the parties that own that location. We apologize for any confusion.

Plaintiffs alleged that this constituted unfair competition under the Lanham Act and violation of the Illinois consumer fraud and deceptive trade practices statutes.

The court dismissed the federal trademark claims based on the authorization granted to each shareholder, including the minority shareholders, to use the mark in connection with their own sublicensing activities. The license, however, did not allow the minority to make false or misleading representations of fact about the majority, so the federal false advertising claim survived, as did the coordinate federal claims.

This case included a standing challenge – defendants argued that the individual plaintiffs, as non-exclusive licensees, had no standing to sue. This is the rule for trademark infringement under §1114, but §1125(a) confers standing on a broader range of plaintiffs, “any person who believes that he or she is or is likely to be damaged by” prohibited conduct. The individual plaintiffs were such persons.

Brief comment: Usually, quality controls within a family business will be assumed to exist, avoiding the charge that the mark has been abandoned through naked licensing. Can that general rule possibly apply here, where it appears that one segment of the family has no control over the other? The existence of this litigation shows an attempt to monitor the use of the marks under the license; perhaps that’s enough. But the reviews at epinions suggest that consumers might not understand the convoluted ways in which this franchise has developed.

Farmed salmon: under the pink

Gallego v. Wal-Mart Stores, Inc., 707 N.W.2d 539 (Wisc. Ct. App. 2005)

Gallego filed a class action complaint against Wal-Mart for misrepresenting the origin of salmon and failing to disclose that the salmon was artificially colored. The trial court dismissed the complaint. The court of appeals affirmed in part and reversed in part, allowing one of his claims to proceed.

Gallego alleged that he bought artificially colored salmon from a Wal-Mart because he believed, based on the color, that it was “naturally raised or wild” rather than farm-raised; farm-raised salmon allegedly has “gray, unappealing flesh.” (Farmed salmon don’t eat the shrimp and krill that produce the red color of wild salmon, so salmon farmers add the color.) Gallego alleged that this was a misrepresentation, since consumers consider color to be a sign of wildness and think that wild salmon is tastier and more nutritious. Wal-Mart did not disclose the presence of the dye at the point of sale or on the packaging. Gallego sought damages for false advertising and unfair trade practices.

The court of appeals reasoned that Wisconsin law has a specific statutory provision prohibiting false advertising with regard to food. Unlike the general false advertising statute, which covers “merchandise” and other things that clearly aren’t food, the food law does not provide for a private right of action. Because of this more specific provision, which indicated that food is not merchandise, Gallego could not assert a private claim based on the general law.

He could, however, state a claim for unfair trade practices under a separate section of the law. Wisconsin regulations require food sold or distributed for sale in-state to be labeled in compliance with FDA rules, and the law provides a private cause of action for violation of state regulations. Wal-Mart did not dispute that FDA rules require disclosure of artificial coloring in salmon; instead, it argued that, for technical reasons, the relevant regulation didn’t trigger a private right of action, but the court disagreed.

More on the issue of dyed farmed fish, including other lawsuits: here here, and here, the last two of which include the marvelous fact that farmers can use a device called the Salmofan® to choose the color of the dye.

A new justification for the derivative works right

Michael Abramowicz has written A Theory of Copyright's Derivative Right and Related Doctrines, 90 Minn. L. Rev. 317 (2005), offering a new justification for the derivative right: not that it offers a tiny increase in the incentive to create over and above the reproduction right, but that it serves to force product differentiation in the derivative markets. I was amused by "[without the derivative right,] it is certain that there would be many written adaptations of Harry Potter, as amateur authors presumably would create a large number of unauthorized sequels and adaptations to other cultural contexts." Because that surely doesn't happen now.

More generally, though Abramowicz's work is typically thorough, I'm not yet convinced that competition in the derivative markets is a bad thing. As Mark Lemley has pointed out, when people copy each other in the market for (unpatented) products like office supplies, we call it the free market; we don't think that forcing product differentiation so that only one producer can make paper clips is efficient, even if the result of the free-for-all is that lots of producers rush into the market and drive the product down to its marginal cost. In fact, that's kind of the point.

The product differentiation theory says works are worth more to consumers when they lack close substitutes, so the production of many similar derivative could be less valuable to consumers than the production of a variety of highly differentiated works. The empirics of this are unclear and my intuitions are that the derivative right does not add social value, in that I see network effects in fandom so that the production of hundreds of stories about one TV show creates more value (including the value of having a fan community in which enthusiasms are shared) than one story about each of a hundred shows, and I also think there's a special pleasure in fetishizing small differences, comparing different treatments of the same basic story - or collecting vegetarian cookbooks, to take one of Abramowicz's examples. Nonetheless, as Abramowicz acknowledges, even assuming that creative works benefit from not being clumped together, and that a derivative works right increases the average space between works, consumers might be better off if free competition drove the price of derivatives down.

My description of the theory suggests that, at least with respect to the highly creative works that tend to spark fan derivative works, the model needs to be modified to take into account fans who enter the "market" and distribute their works freely, as in the Harry Potter novel archive linked above. We can add in non-monetary prices, but I suspect it makes the whole thing much more complicated, especially since sellers of authorized derivative works want to be paid with money. Perhaps there's some work on open source versus proprietary source software that might provide some insights.

There's no such thing as a controlled experiment in copyright, but it might also be worthwhile to look at the spate of unauthorized derivatives of Uncle Tom's Cabin, Tom Sawyer and the like. Those derivatives didn't crowd out other, nonderivative works as far as I'm aware, nor do modern versions of Shakespeare dominate the Blockbuster shelves, suggesting that the product space for copyrighted works is broad enough to give us variety without needing an extra derivative right.

Maybe the real problem I have is with the idea that, if we can propose a detailed enough economic model, we'll know something useful about copyright scope - the difficulty, as with the difficulty in Judge Posner's detailed equation in Sex and Reason that purports to show whether or not abortion should be banned, is that we have no idea what the values of the variables are and no real hope of determining those values. Thus, as Abramowicz acknowledges, his theory shows that a derivative right might be a good idea and might not be. Perhaps the models are helpful if they get us to think about considerations that otherwise might just be unintended consequences - Abramowicz uses his model to argue that we should think about the reproduction right and derivative right separately, and even assign them different scopes, to take into account the difference between reproduction's plain incentive justification and the derivative right's more complex product differentiation justification.

I have of course given only the merest outline of Abramowicz's argument. Interested readers should definitely check it out. Unfortunately, it does not seem to be available at the journal's site or on SSRN.

Mandarins and Geographic Origin

"I guess you could say it's a sense of terroir." What I find particularly interesting (aside from the idea of more yummy tangerines) is that the concept of terroir is, it appears, well enough known to food section readers in LA that it need not be defined.

International survey of nontraditional marks

This excellent site, available in English or German, includes useful surveys of applications and registrations for smell, taste, sound, motion, and other nontraditional marks -- a topic I'll be covering in my trademark class on Tuesday. It seems hard to imagine a taste mark that would be distinctive of the goods and nonfunctional, since (unless you're a baby) you tend to taste objects only when taste is a product feature.

Laches, patent claims, and false advertising

Icon Health & Fitness, Inc. v. The Nautilus Group, Inc., 2005 WL 3681813 (D. Utah)

False advertising cases, like trademark cases, are often decided at the preliminary injunction stage. Because one of the factors in granting preliminary relief is whether the plaintiff delayed in bringing its case, indicating that immediate relief is unnecessary, there is substantial Lanham Act caselaw on the topic. There is somewhat less precedent on the related subject of laches, which was at issue in Icon Health. Laches will bar an action if the plaintiff inexcusably delays in bringing suit and the defendant is prejudiced by that delay.

Icon, which produces fitness equipment under brand names including NordicTrack and Reebok Fitness, challenged two of the Nautilus Group’s claims for its Bowflex exercise machine: (1) that the Power Rods on the Bowflex were patented, and (2) that the Poly-Hexamethaline-Adipamide ("PHA") used in the Power Rods was "developed exclusively by Bowflex" and "not available anywhere else in the world." (Though it doesn’t appear in the decision, it seems likely that PHA is a misspelling of polyhexamethyleneadipamide, also known as nylon.)

The Bowflex patents were issued in 1986 and 1988, and Nautilus has made the claim that the Power Rods are patented for many years. In 1995, Nautilus asked its manufacturer what the Power Rods were made of, and, upon receiving the answer, added the PHA claims to its advertising.

Icon is a large Nautilus competitor with its own patent portfolio, but, the court found, in such a competitive market (at least 100 serious competitors), it cannot reasonably monitor everyone’s patents. The court accepted Icon’s testimony that there is so much advertising in the exercise industry – including via infomercials - and so much work to be done selling one’s own products that keeping track of every competing claim is impossible. Icon occasionally examines competitors’ products when it suspects patent infringement or is developing a similar product. The court found it significant that Nautilus, too, did not generally attempt to verify its competitors’ claims.

The claims at issue here came to Icon’s attention when it developed its own resilient-rod exercise machine, the Crossbar, and Icon had outside patent counsel investigate the matter in 2002. Icon had, however, encountered the Bowflex before, in 1987 when its creator was seeking marketing partners. The creator testified that he always brought along a copy of the patent in his marketing presentation. He sent marketing materials and a product sample to Icon before their meeting, and at the meeting the parties discussed the Bowflex patents as well as the function and features of the Bowflex machine. Icon chose not to invest in Nautilus. The court found that, though the parties are now competitors, they weren’t in 1987 and Icon had no reason to investigate further (presumably because Nautilus was still struggling to get off the ground, and thus was like every other self-promoting small business convinced that it had the Next Great Idea; Nautilus, unlike most ventures, might have been right, but Icon couldn’t have known that at the time).

Aside from that specific encounter, the Bowflex has been widely marketed since the 1980s, and Icon’s witnesses were generally aware of it, whether they watched SportsCenter and saw Bowflex ads or couldn’t sleep and therefore saw infomercials.

The Lanham Act has no limitations period; courts recognize a laches defense using an analogy to the most appropriate state limitations period as a starting point. The parties agreed that the analogous limitations period is Utah’s 3-year statute of limitations for fraud. (This is not a foregone conclusion, since state unfair competition law or even state trademark law are also candidates for the analogy.) Utah applies a discovery rule that starts to run when the plaintiff knew or should have known of the facts constituting the fraud or mistake.

The question was not when Icon knew of the Nautilus statements, but when it should have looked into the truth or falsity of those statements. The court found that Icon had no reason to investigate before 2002, and filed suit shortly thereafter. Its actions, in the context of the highly competitive and claim-clogged exercise market, were not unreasonable. Thus the Lanham Act claim will proceed. (A similar result obtained with respect to Icon’s claims for false patent marking.)

Other observations: (1) Critics of competitor suits for false advertising have pointed to cases like this (objections to a competitor's claim of patent protection) as evidence that competitors sue over matters about which consumers in fact care little. Materiality will still be an issue as the case proceeds, but I think it's reasonable for consumers to be influenced by claims of uniqueness and patent protection, both of which imply special efficacy. Consider patent medicine, which used the legal concept of patent (or, more often, trademark) to give nostrums a convincing mystique.

(2) This case features a 1:14 ratio of plaintiff’s attorneys (attorney, actually) to defendant’s attorneys. The race is not always to the swift, nor the battle to the strong – though, present result notwithstanding, that’s the way to bet.

I suppose it was inevitable

Ned Snow, writing in the Syracuse Law Review (unfortunately unavailable at the Law Review's site), argues that Grokster makes Tivo liable for inducing infringement, because commercial-skipping undercuts the economic basis for commercial-supported TV. I told my copyright law students that there's no such thing as a natural right to a business model, but Congress can always provide.

I disagree vigorously with much of what Snow says; what I found downright puzzling was his claim that "In Sony, the claim of contributory infringement against the VCR manufacturer stemmed solely from the fact that the manufacturer sold VCRs; the manufacturer did not encourage VCR users to reproduce copyrighted broadcasts." Take a look at this ad, if the absurdity of Snow's claim isn't plain on its face.

Full cite: Ned Snow, The Tivo Question: Does Skipping Commercials Violate Copyright Law?, 56 Syr. L. Rev. 27 (2005).

Remember that hypothetical about whether taping lectures infringed on rights in the prof's notes?

Hypothetical no more: UCLAProfs.com offers money for tapes and notes of targeted professors' classes. The idea is to expose ideological bias. Once students are taping, or even taking notes, for pay, they probably have exceeded the scope of any implied license. And here's an instance where the copy-shop cases pose a problem for students: while UCLAProfs.com's political program undoubtedly offers it a fair use defense for reproducing portions of lectures/notes that show professors' bias, students who provide the entirety of a semester's content -- as required by the site's offer - are engaging in wholesale, for-profit copying, and the fact that this copying is in the service of someone else's ultimate fair use is, under current precedent, unlikely to help.

A couple of points: The disclaimer says the site won't accept any tapes if the professor hasn't agreed to be taped, so that could solve the taping problem, but that still leaves the issue of whether detailed notes of a class could be a derivative work of the professor's notes.

The disclaimer also says the site won't pay "for copyrighted materials in any form." Yet students only get full payment for "full, detailed lecture notes, all professor-distributed materials, and full tape recordings of every class session." Plainly (and understandably, since I doubt anyone behind the site is a copyright lawyer) they're ignoring the copyright in the lecture notes -- no matter who holds that copyright, it exists unless the class is entirely unoriginal even in selection and arrangement -- and the tape recordings. I guess the disclaimer means students are supposed to turn over their John Stuart Mill handouts but not their Re-Elect Obama handouts.

Ben & Jerry's Ice Cream

Ben & Jerry's Ice Cream Greeting Cards ... from Florida State University. Photomicrographs (photos taken through a microscope) of popular Ben & Jerry's ice cream flavors, available as greeting cards. FSU apparently licenses the production of various decorative/promotional goods from its photos to Amber Lotus. Available bookmarks, for example, include PowerPC 620 and Cherry Garcia.

Pretty, but possibly infringing? Though Chocolate Chip Cookie Dough is generic, the line of greeting cards is called "Ben & Jerry's Ice Cream," and Chunky Monkey and Wavy Gravy are arbitrary/fanciful. Under the microscope, Wavy Gravy is no more psychedelic than the other flavors.

Nominative fair use?

When I was in law school -- but clearly on my way to becoming an IP prof -- I wrote Ben & Jerry's asking about the trademark aspects of the name change from Coffee Heath Bar Crunch to Coffee Toffee Crunch and back. This was before they'd been bought out; I got an answer, which was that, though they had used Heath Bars to make Coffee Toffee Crunch (and thus its presence in the Flavor Graveyard is a mite misleading), they decided to pay to use the trademark because taste tests showed that people liked the ice cream more when it was called Coffee Heath Bar, a result whose physiological basis has now been suggested by Read Montague's brain-imaging studies of Coke v. Pepsi preferences: people like Coke more in non-blind taste tests but Pepsi more in blind taste tests; the name "Coke" triggers positive memory associations.

Under Champion Spark Plug and the nominative fair use cases, did Ben & Jerry's really need to pay to use the name if they were using real Heath Bars?

Don't read

So, apparently the American Library Association sent a cease and desist letter alleging that Audible.com's Don't Read campaign "violates" the trademark of the ALA's "Read" campaign. Oh, ALA, how you have betrayed me! You're so good on copyright; wherefore are you making such a silly trademark claim?

Yesterday, as I was saving the Audible "Don't Read" posters, which were available from the website in PDF form, that feature was disabled, so I only got a few. I guess that change, which eliminates the version of the ads most like the ALA's poster-based campaign, was made in response to the threat letter, but I continue to see the "Don't Read" ads pop up on sites I visit.

I think the Don't Read campaign is icky, but that doesn't make it infringing. I do wonder about the use of a .org domain as the website, which seems a teeny bit misleading.

False advertising over domain names

C.E. Petit pointed out this IPKat piece on Nominet's Australian victory against companies that mined data from Nominet's database of .uk registrants and then sent them what looked like official invoices, offering .com domain names. The decision, which I have not yet read, apparently rests both on the copyright in the database and on unfair trade practices. As might be expected, I think the former is silly (though it might well be within the law, if defendants extracted a substantial portion of the database contents) but the latter is sensible. As I understand it, this sort of invoice fraud happens with all sorts of basic business supplies.

Lawrence Lessig on Google Book Search

Lawrence Lessig has produced a typically impressive audiovisual presentation on Google Book Search as fair use He updates Wilde to point out that, in America, all men sue the thing they don't like.

Though I understand exactly why he does it, I began to get uncomfortable with his repeated references to Google's willingness to let copyright owners opt out of Book Search. (I understand why Google does it, too.) If Google's project is fair use, consent or objection should be irrelevant, right?

In a case in which a person selected a particular work to criticize or even just quote, the fact that the person refused an "opt-out" request from the copyright owner shouldn't affect the fair use analysis one jot. Is Lessig prepared to endorse the idea that large-scale digitization, where the transformation (if any) comes from turning individual objects into data for a search engine, should allow opt-out in order to be fair use? That's not a crazy principle by any means, but it is a different principle than that applicable to individual, non-aggregating fair uses.

AALS Section on Intellectual Property, part four

2006 AALS Meeting, Jan. 7
Section on Intellectual Property
Trademarks at the Supreme Court: Evolution or Revolution?

Jessica Litman’s theme was “Neither Evolution Nor Revolution.” Like Barton Beebe, she also surveyed Supreme Court trademark decisions over time, and in an illustration of the limits of empiricism came up with different results. The Supreme Court’s Lanham Act jurisprudence involves many unanimous rulings against trademark owners, about twice as many rulings against as for. Also, many pro-owner decisions end up with a narrower standard than what the lower courts had applied: Color is registrable, but not without a showing of secondary meaning. Before the Lanham Act, the pattern is similar. Outlier cases exist in all periods (e.g., Taco Cabana), but Litman finds 130 years of marked, often unanimous skepticism towards expansion.

She is always afraid that the Court is going to bollix IP cases. The Court has been unwilling to recognize the danger in metastatic copyright law, so it’s surprising to see it resist metastatic trademark law, especially since lower courts are equally vulnerable to calls to expand both. (Perhaps the Court thinks copyright is Congress’s business whereas the Lanham Act, with its basis in common law, is fair game for the Court to slice up.) The Supreme Court doesn’t pay much attention to lower courts, so when it looks at past cases it sees an unbroken line of precedent saying trademark is about competition, not incentives or free riding. And the precedent seems relevant because the trademark statute, unlike the Copyright Act, is substantially similar to the law in effect sixty years ago.

Sure, there have been some big changes -- intent to use being a major procedural change, but not one that altered the scope of trademark; dilution, ACPA, and treaty-based limits on geographic marks are others nibbling around the edges -- but the core is still the same. I’d also note, in support of Litman’s argument, that the trademark statute is still pretty much as compact as it was when enacted, whereas “metastatizing” is a fair description of the Copyright Act’s word count, reflecting a move from standards to technical rules that hasn’t penetrated very far in trademark.

But if all this is true, what’s up with the lower courts’ expansive interpretations, which make it easy to miss that Congress hasn’t changed the law much? Litman suggested that courts tend to see cases with copyright and patent claims alongside: They see trademark as a looser form of IP, so if copyright claims fail over some technicality – like the work being in the public domain [cue laughter] – trademark claims can still succeed.

The Supreme Court’s jurisprudence fails to constrain lower courts because each opinion leaves room to argue that courts should follow its rule only in narrow, factually identical circumstances. After each decision we see a lot of CLE and scholarship saying that whatever section of the Lanham Act was at issue should still be construed broadly – Dastar caused a huge epidemic of this reasoning. While Sears/Compco was enough to quash general unfair competition law for ten years, that’s not the case today.

Lower courts’ expansionism may not be completely pernicious. At least it keeps INTA from running to Congress with a 200-page wish list that would be opposed by the ACLU, Public Citizen, automobile insurers and nobody else.

My reaction is that INTA may have reached equipoise, at least with respect to rights granted against competitors if not rights granted against artists, critics and the like. The INTA wish list for dilution contains some major cutbacks in the scope of the right. Unlike the situation in copyright, where – even though all new works have their roots in earlier ones – expansive copyright systematically benefits entrenched interests, trademark battles routinely involve major companies on both sides. Although trademark, too, can be used against new entrants – think of the effect of a ban on using another’s mark in comparative advertising – repeat players tend to be both plaintiffs and defendants on a regular basis. Interestingly, Litman made the same argument with respect to false advertising law: Because it is so common for the same party to be on both sides of advertising cases, she said, we see more articulation of the competing principles instead of a unidirectional thrust to expand the law. I agree; the question is whether you’re comparing trademark law to copyright law (in which case the heavy legal firepower in the private sector looks much more balanced in comparison) or to advertising law (in which case the heavy legal firepower looks concentrated on the side of ownership claims in comparison).

Litman’s goal is to have courts remember why a narrow scope for trademark is a good thing. She wants to separate producer goodwill from product goodwill, so that trademark will protect the former but not the latter. She liked Laura Heymann’s argument about letting consumers choose, a rhetoric that hasn’t been invoked enough to date. We also should talk more about the interests of new market entrants in competing with established brands. My thought: The free speech claims we academics like to make, though usually in reference to noncommercial speech, are also very likely to be extended to competitors and even noncompetitors as the First Amendment provides ever more protection to commercial speech.

As I mentioned above, Litman sees potential for borrowing principles from false advertising law generally. I agree, with the same caution I expressed in the previous post: Consumer competencies with respect to evaluating trademarks may be much greater than with respect to other things. We should be careful about the feedback effects on false advertising law; I would hate to see consumers required to exercise as much care in evaluating misleading substantive claims as they should be in evaluating trademarks. I would also be very interested to hear Litman’s take on the relevance of doctrines like puffery to trademark. Some scholars claim that allowing puffery has a corrosive effect on overall consumer beliefs, leading us to discount all claims more or less equally and pushing us toward the inefficient and unhappy market for lemons. Do similar mechanisms operate in trademark?

AALS Section on Intellectual Property, part three

2006 AALS Meeting, Jan. 7
Section on Intellectual Property
Trademarks at the Supreme Court: Evolution or Revolution?

Laura Heymann spoke about the concept of the public domain in trademark law. She defined a trademark commons/public domain not by abandoned or genericized terms, or by a pool of shared expression, but by private parties’ ability or inability to control the meaning and associations of marks. That is, she was concerned not primarily with relations between competitors, but relations with consumers. We should recognize consumers’ capacity to negotiate multiple associations with marks rather than controlling the meanings to which they’re exposed.

Trademark meaning is not just made by producers, but by consumers whose intellectual dexterity lets them recognize what’s at stake. We can get the joke “Where’s the Beef?” in a political campaign, know what a swoosh on clothing means, know that Continental Airlines and Continental Bank aren’t the same. The public can select, accept or reject meanings. That playfulness is guided by advertising but still not fixed. We need to trust consumers to manage and negotiate meanings, and to make distinctions. (This reminds me very much of Ann Bartow’s work on trademark law’s gendered assumptions about consumers’ gullibility.) We should tolerate multiple associations with a mark; not all meaning should be controlled by trademark owners.

Though Heymann is no fan of Dastar’s reasoning, she notes that the Supreme Court at least placed trust in the consuming public to choose wisely. Relatedly, Dastar undercuts Boston Professional Hockey Ass'n v. Dallas Cap & Emblem, 510 F.2d 1004 (5th Cir. 1975), and other promotional goods cases in which the consumer wants to display allegiance to some group but doesn’t much care about the official endorsement of that group; the distinction between expressing allegiance and assuming endorsement is not too fine for an average consumer to make. Likewise, K.P. Permanent posits that, faced with two competing associations, one used as a trademark and one not used that way, courts need not step in because consumers can often tell the difference (or, at least, the existence of some confusion doesn’t justify legal intervention when the difference remains visible and useful to many other consumers).

In dilution, Moseley limits the cases in which consumers are thought not to distinguish marks. Just because one mark reminds a consumer of another doesn’t mean she will fail to separate the two. Indeed, often the second-comer depends on the consumer’s ability to make the distinction and thus get the joke, whether it’s Victor’s Secret or The Greatest Snow on Earth.

Returning to Dastar: Heymann thinks the court made a mistake about the role of attribution in copyright law (to wit, copyright doesn’t protect attribution, though authors may sometimes leverage their copyrights to get contractual protection). Though she wants to trust consumers generally, she sounded a cautionary note about the Court’s trust in consumers’ ability to sort matters out and not mistakenly buy both sets of tapes. That trust is warranted in some cases, especially parodies, but by refusing to consider the possibility of deception at all, the Court put too much burden on consumers. Traditionally courts have held consumers of high-end goods to a higher standard of care, but in Dastar that’s extended to a mass market video and in Moseley to adult novelties.

Given that the war buffs I know tend to have dozens of books about the same events, I find it easy to believe that most consumers of WWII videos who’d consider buying two sets wouldn’t mind some repetition. If it’s just a case of slipping them into different sleeves, as Morrissey sings, that could be deceptive – but the Supreme Court seems to have preserved the possibility of a false advertising claim under such circumstances.

Heymann ended with the suggestion that the trust in consumers displayed in Dastar and K.P. Permanent might affect initial interest confusion, which evidences a lack of faith in consumers’ ability to sort things out for themselves. That would be a great result. My take: In false advertising law, consumers are often held to too high a standard in judging substantive matters – reading nutrition claims, for instance – when they have no relevant expertise. At the same time, trademark law presumes that the very same people are easily confused in an arena in which we are all experts: modern marketing practices.

AALS Section on Intellectual Property, part two

2006 AALS Meeting, Jan. 7
Section on Intellectual Property
Trademarks at the Supreme Court: Evolution or Revolution?

Graeme Dinwoodie began by saying that the Court’s decisions looked slow and cautious, filled with routine textual interpretation – even if you think the result in Moseley is strange, the tools used to reach it are familiar. It’s tempting to see a conscious attempt to change the law by finding for defendants, especially given the strained logic of some of the cases, not to mention the important role played by Justice Scalia’s view about what consumers look for when they go to stores. (I bet Scalia does know what it’s like to shop for himself a bit more than George H.W. Bush did, but Dinwoodie’s point is still fair.)

The dicta give more clues to what the Court wants, but the themes are consistent with classical trademark theory. Prudential concerns abound: the Court seeks to promote commercial certainty, as in Wal-Mart, where the secondary meaning requirement was designed to prevent costly litigation, and Dastar, where the concern was that the defendant was likely to get sued no matter what it did as long as failure to attribute was actionable. In K.P. Permanent, the Court didn’t want to burden people with surveys if they could rely in good faith on fair use.

Given recent opinions’ brevity and incoherence, they raise more questions than they answer (which, I hasten to point out, is true in most areas of the law these days; the Court grants cert to deal with circuit splits, then dodges the question or creates a new rationale that itself requires interpretation – trademark is by no means unique). In K.P. Permanent, this incoherence allowed the 9th Circuit to ignore the decision on remand. In Traffix, the questions include how the two tests for functionality (competitive necessity/cost or quality) relate and how, if at all, one rebuts the evidentiary inference generated by an expired utility patent.

Competitiveness has always been a central part of trademark, as is avoiding bad interactions with copyright and patent law. K.P. Permanent’s conclusion that we can live with some level of confusion is thus consistent with functionality doctrine and not tremendously radical.

It’s true that trademark law has expanded since Kellogg and Sears/Compco. So is the Supreme Court pushing a version of “trademark law in exile”? No, there’s no revolution at hand. Much of the expansion was justified by changes in the social and commercial environment, but courts never fully jettisoned common-law principles. The Lanham Act was just supposed to make the common law easier to apply, and courts have always been willing to impose limits on its scope.

We should also remember that the Supreme Court cases are not really about the bulk of trademark law. The recent haul includes two trade dress cases (when most marks are word marks); dilution (only for famous marks, a small subset even if fame is construed broadly); public domain works; fair use where likely confusion is shown – these aren’t core trademark issues, which are fact-intensive. They are important as signals of how the ordinary tests should be applied, though, and Dinwoodie thinks such signals matter. The Third Circuit’s recent Lending Tree decision, for example, extended K.P. Permanent to nominative fair use (I would note that a panel in the 9th Circuit had already determined that nominative use trumped likely confusion, though what a precedent on nominative use means in the 9th Circuit is anybody’s bet). Courts are likewise following the Supreme Court’s signals in trade dress, finding configurations to be product design instead of packaging where the classification is contested.

In the long term, Dinwoodie foresees more deviations back towards expansion. The biggest thing to fear is the assimilation of unfair competition to trademark, so that any free-riding becomes infringement. A major problem is that the Court’s analytic tools are too blunt to deal with trademark’s current goals, which, as Barton Beebe noted, deal with expression and identity, not just search costs.

AALS Section on Intellectual Property, part one

2006 AALS Meeting, Jan. 7
Section on Intellectual Property
Trademarks at the Supreme Court: Evolution or Revolution?

My notes only – I understand that podcasts will eventually be available at the AALS website.

Barton Beebe began by saying that we are in the fourth wave of trademarks, in which the brand is a symbol of itself and everything is branded, including every product feature and tagline. Everything is distinctive of itself – it has an identity or at least could have an identity -- and this seems to occur spontaneously, a process he called semiogenesis (if I understood him correctly). TRIPS, which allows assigment of marks in gross, recognizes this detachment of mark from underlying product, though the US may not have fully incorporated that particular change into law yet.

Beebe traced the legal recognition of this phenomenon to Breyer in Qualitex, who refused ontological distinctions and said anything can be a mark. The new subject matter of trademark is not products or services but meaning itself. This is the key to the recent wave of Supreme Court case law, which, with the exception of K.P. Permanent and Moseley, concerns what can count as a mark rather than issues such as infringement, assignability, etc.

What’s the Court’s response to the potentially infinite expansion of non-ontologically-defined trademarks? Functionality or efficiency are the limits offered. The Court’s opinions tend to be terse and conclusory – there have been no dissents beginning with Two Pesos. Dissents were pretty scarce before that, too, present in Bulova, Park ‘n Fly, and Kellogg, but no others in Beebe’s survey.

Why such unanimity? Two Pesos and Qualitex came back to haunt the Court in Wal-Mart and Traffix respectively. The Court in recent years has thus been burned badly by what appears to be a small field but has lots of confusion. In Moseley, the Court spent a little time on the issue and got out. No one wants to write another disaster. (I’m not sure this is anything but a recipe for another disaster; Beebe may well agree, but he didn’t comment.)

The panel’s title indicates a perception that the Court is cutting back on trademark rights, but it could have been even more restrictionist in results. Has Moseley, for example, made any difference in lower courts? Beebe alleged that courts were already hostile to dilution before the Supreme Court acted.

I must disagree; having clerked in the Third Circuit, with its awful Sporting News decision, I’d say that lower courts were deeply divided about dilution, with some handing out plaintiffs’ verdicts on very thin reasoning. I haven’t checked recently, but at least for a year after Moseley I found no reported cases in which a dilution claim succeeded that didn’t also involve a successful infringement claim, which suggests to me that lower courts responded aggressively to the Supreme Court’s anti-dilution signal. (And by the way, it’s pretty wacky how state dilution claims get dragged around by the scruff of their necks in this process, with courts routinely saying “the analysis is the same” based on circuit precedent that preceded Moseley’s declaration that state and federal dilution claims are very different creatures.)

But Beebe’s broader point is more persuasive – he argued that the Court could have insisted on an explanation for trademark rights founded in search costs rather than accepting the overall expansion. Slowing that expansion doesn’t count as restrictionist in his book.

What about Dastar? People have read it as an apology for Eldred. Beebe thinks the Court rendered “origin” in the Lanham Act meaningless. Contrary to what the Court said, origin need not refer to a producer. In modern trademark, Beebe argued, a mark is essentially a certification mark. Dastar illustrates the whack-a-mole approach of the Supreme Court: each case solves a single problem, but that creates problems for the rest of the doctrine. (I wonder if the metaphor of epicycles helps here; is trademark’s Copernicus anywhere out there?)

Beebe ended by talking about a particular kind of commodity fetishism. Modern marketing encourages us to assume the natural existence of products: they just appear on store shelves, with no need to trace origin or investigate conditions of production. Trademarks are about speaking to us, not about product origin. Dastar did nothing to attack this basic arrangement.

AALS Section on Law and Anthropology, part four

2006 AALS Meeting, Jan. 6
Section on Law and Anthropology
A Cultural Analysis of Intellectual Property

Alexander Bauer, an anthropologist from the School of International Affairs at George Washington University, bravely ventured among the lawyers. He spoke about the lack of protection for cultural property.

Cultural appropriation, mutilation, and commercialization are all threatening to traditional cultures, which are swept up into fusion cuisine and world music and the like. In the past, cultural protection policy has overemphasized tangibles and ownership, as with the Elgin Marbles. “Cultural heritage” may be a better term than “cultural property” for explaining the subject of concern. IP rights are also not good enough, because their time and scope limits leave too much in the public domain for others’ appropriation.

UNESCO requires states to draw up lists of cultural resources and make plans to protect them. But the intervention of law can destroy what it’s supposed to preserve. State policies often require the definition of authentic culture and the adoption of correct practices, which can destroy the practices of those who don’t quite meet the standards of official approval and can calcify an evolving culture.

One example is the Indian Arts & Crafts law, which essentialized the notion of Indian artists, excluding people without official tribal memberships, and also essentialized appropriate subjects for Indian art. Law tends to lead to objectification and commodification of what was supposed to be protected. (Similarly, I wonder whether the greater identifiability and manipulability of artifacts pushes cultural preservation policy in the direction of identifying things rather than practices.) What’s particularly painful about this is how preservation isolates art from dynamic change, the kind of creativity that produced the tradition in the first place.

What are the interests we want to protect? (1) Control (authenticity, integrity, secrecy/sacredness); (2) acknowledgement or proper credit; (3) just compensation – this last is often not as important or is valued only in reaction to perceived Western rapaciousness.

What are the solutions? IP, as noted above, fails because it protects individual rights in specific, novel creations for limited times. Sui generis laws? They struggle with cultural changes and with who’s authorized to do what. Defensive disclosures and prior art databases can at least help with interest (2) and parts of (1). But even proper credit is dicey – oftentimes neighboring groups have competing claims to the same knowledge. Moral rights legislation, as proposed in Australia? That would address (1) and (2).

But what gets lost is that culture always moves, for all that people are committed to the version they know. It is difficult and often detrimental to compartmentalize cultures, which are often products of contact with others, as the use of tomatoes in Italian food or wool for Navajo blankets shows. Law may not be the answer.

AALS Section on Law and Anthropology, part three

2006 AALS Meeting, Jan. 6
Section on Law and Anthropology
A Cultural Analysis of Intellectual Property

Susan Scafidi summarizes her participation on the panel at her blog. I will add a few comments.

According to Scafidi, the value IP is charged with supporting is creativity, which, unlike equality, autonomy, and democracy, cannot be mandated or well-defined. I agree with everything except the parts about equality, autonomy, and democracy, which have their own problems of definition and preservation through legal structure. But I did very much like Scafidi’s explanation of the basic tension in IP law: Creativity is only successful if good ideas are copied.

Our cultural values are revealed by and embedded in decisions about what kinds of creativity get legal protection. Some things (like fashion) are generally excluded from IP protection, decreasing their economic and cultural value, for reasons tied to race, class, and gender. I particularly liked Scafidi’s discussion of how class and gender popped up in policy debates: People who opposed extending IP rights to fashion in the 1930s asked rhetorically what the poor working girl would wear, but neglected to ask what the poor working girl would read.

Mark Lemley argued in the comments period that we should not fall into the trap of “if value, then right.” Specifically, fashion’s economic value could be increased by refusal to protect, and I think that’s right, but Scafidi’s point about cultural value – and about why we’re so kind to fashion when we ruthlessly grant copyright and patent protection to software – is still valid. Moreover, Lemley’s argument is systemic: the overall value of fashion as an economic sector may be higher because no one can take monopoly profits based on legal rights to exclude. But highly creative individuals within that sector may make less money because we’ve judged their creativity to be less worthy of protection than the advances made by individuals in other creative fields.

The gender aspects of the problem are the most salient for me. Low-protectionists like me are comfortable with the argument that people will create art even without legal protection because of the intrinsic, reputational, and other non-copyright rewards for creativity. Empirically, this is true. Nonetheless, when you start to compare fields that get IP protection (software, sculpture) with fields that don’t (fashion, cooking, sewing), it becomes uncomfortably obvious that our cultural policy has expected women’s endeavors to generate surplus creativity but has assumed that men’s endeavors require compensation, just as our society has expected women to do the hard work of raising children and keeping house out of love and duty but not expected men to show up at the factory for the same reasons. Propertization of work done out of love would lead to the horrors of the market (bravely borne by men) – where have we heard that before?

Lemley invoked the principle that ideas are too important to be protected by monopoly IP rights. Although I agree with him, even if Scafidi was understood to be arguing for equalizing protection upwards, nothing she said suggested that ideas should be protected – a dress is no more (and no less) an idea than a painting.

I agree with Lemley that the solution is probably not to grant new IP rights in traditionally excluded areas but to decrease the rights available to other kinds of creativity. But somehow I don’t see that happening any time soon. This is the kind of dilemma Catharine MacKinnon described when she analyzed the conflict between equality and difference feminism. Where, I wonder, is the dominance theory of IP?

AALS Section on Law and Anthropology, part two

2006 AALS Meeting, Jan. 6
Section on Law and Anthropology
A Cultural Analysis of Intellectual Property

Sonia Katyal returned to discuss the relationship between the cultural analysis of IP and other approaches. She began with the initial reaction to the Chicago social norms theorists and the debate over whether this was new or just recycled insights. (Given my theoretical approach to originality, which is somewhat similar to that found in Ecclesiastes, I find this dispute almost meaningless; the question I’d ask is whether the social norms folks offered tools and concepts that were good to think with.) There’s been a similar debate in IP for years, focused on what economic incentive theory has to offer. Interdisciplinarity can help.

Katyal identified trademark law as a field where the limitations as well as the possibilities of economics are visible. Trademarks exist, dominant legal theory tells us, for the benefit of the public, but trademarks carry excess meaning: They support multiple simultaneous non-exclusive identities. (I’m not entirely sure what this means – is it that the person wearing branded apparel tells us something about himself, a meaning that is enriched, complicated, or even contradicted by other contextual elements, like location, physical appearance, or other brands? Or is it that various trademarks – American, “Where’s the Beef?” – have multiple meanings depending on the contexts in which they appear? Or something else?)

The official story of trademark is that branding is socially valuable. It facilitates information transfer, closely identifying a product with its source. In economic theory, a trademark is a way to promote efficiency. Against this theory, what role does cultural analysis have?

Here Katyal invoked the work of Barton Beebe on the semiotics of trademark. The economic approach fails to explain doctrines like dilution and distinctiveness. Trademarks are themselves status-signalling goods, and this social meaning – the meaning invoked when you wear a Coke T-shirt or, for that matter, one that says Enjoy Cocaine – is protected by law.



Trademarks function to draw consumers into relationships; they can work as floating signifiers that can be used for any purpose and don’t have to be tethered to any particular product. But, at the same time, trademarks don’t have to carry the owner’s meaning; they can be flipped (like Burberry’s adoption by chavs?). Social and cultural theory can help us understand why trademarks have become so powerful and how their meanings can be altered.

Katyal identified the recent Falwell case as one in which the court allowed the semiotic function of the term Falwell (or Fallwell) to remain floating. (I wasn’t clear on whether she thought the court’s reasoning followed the same paths semiotic theory would take.) A semiotic model of trademark pushes in the direction of a speech-oriented theory, whereas the economic model leads to a product-oriented theory.

Finally, Katyal suggested that the idea of corporate personality helps explain why corporations would invest in making marks meaningful beyond their products. And this – as one commenter pointed out – is why the normative thrust of adding semiotic theory to trademark law is less clear than you might first think, given the whiff of high academia about semiotics. Economic theorists have at least sometimes been skeptical of dilution and other extensions of trademark precisely because only core trademark infringement has an easy incentive/information story to tell. Semiotics explains why it would be worthwhile for a corporation to control meaning more broadly, even if the theory also suggests that such endeavors will often be futile. Corporate personality is the propertized (and smiling) face of semiotics.

AALS Section on Law and Anthropology, part one

2006 AALS Meeting, Jan. 6
Section on Law and Anthropology
A Cultural Analysis of Intellectual Property

The panel was arranged by Madhavi Sunder, but was chaired in her absence by Mark Lemley. Standard disclaimer: this report is transcribed from my notes, not complete or necessarily completely accurate. With respect to Julie Cohen’s work in particular, I may have missed a helpful concept or two.

The basic topic was whether and how to construct a cultural analysis of IP that would counter the dominant economic analysis. A better, and longer, description is available at the AALS site (scroll down).

My colleague Julie Cohen began by talking about the recent methodological debate of which the panel was a part. IP has had a fairly insular debate over whether one should start with a law and economics view or a natural rights view; law and economics has been opposed to deontological, Lockean, individual-oriented theories of IP rights. With those two theories setting the terms of the debate, natural rights theories have made the case for the self while law and economics presents itself as looking at overall structure and society. Economics, however, also refers ultimately to the individual by making individual preferences king; one needs a theory of utility to make sense of the rest of the analysis.

(Wendy Gordon, in the comments period, referred to her own work building a Lockean case for IP limitations. I think the dominant meaning of natural rights has been IP expansionism, just as the dominant meaning of law and economics has been IP expansionism; within both theories there is room to criticize the relentless growth of IP, and Gordon’s work is the foremost example of that criticism within the natural rights tradition.)

The natural rights v. law and economics divide ignores social and cultural theory, which can talk about other things. Such theories are empiricist in orientation, focusing on thick description of cultural practices. They promise insights not so much into the behavior of cultural goods after production (supply and demand), but into the process of creation. One still needs a normative argument at the end of the day, but social and cultural theory have rigorous tools to bring to the table (to the shop?).

What can these theories add? (1) Attention to the endogeneity not just of preferences but of processes and products as well; the world looks different under regimes that enable different kinds of practices. (2) Focus on everyday practices that contribute to the production of creative and intellectual culture. (3) Attention to processes of creation that are relational, that involve networks of individuals, artifacts, and groups. Cohen mentioned narrative and myth, spatiality and physicality – you make new things by using what’s around you, which often involves creative and unpredictable play. This type of creation is hard to model in law and economics because of its lack of intentionality, and hard for natural rights theories to comprehend for similar reasons (and perhaps because of its incrementalism; it is both accidental and cumulative).

Cohen’s preference is for using the toolkit from science and technology studies (STS). STS builds on Kuhn’s central insight, the paradigmatic quality of scientific knowledge; artistic practices also evolve cyclically. STS has as a central concern how artifacts are configured for everyday life and how they configure the user. (I have a piece on libraries coming out soon that relates to this, including how the metaphor of DRM as “speed bump” turns out to be richer than you might think – speed bumps themselves are highly contested technologies that have prompted the creation of technical workarounds, which then forces regulators back to using law to make sure people obey the rules.)

Cohen called her view a milder version of actor-network theory (ANT): Artifacts crystallize more or less durable relations of power; though they are not actors, they exert causal control over others in the network. Further work to be done: How do artistic works crystallize patterns of belief and practice?

Larry Lessig’s Code, Cohen said, does not make the same arguments as the ones she wants to see. The idea of code = law has become very technocratic and is used in debates over how to design technology for regulatory purposes. ANT is more about unintended consequences that, while not inevitable, come to seem natural and determined.

AALS Section on Art Law, part four

2006 AALS Meeting, Jan. 6, Section on Art Law
Art Law and Intellectual Property Law: Convergence and Conflict

K.J. Greene of Thomas Jefferson spoke about piracy, black appropriation, and copynorms. This is a series of thoughts, he said, that he is working through, so the connections between them may not yet be fully formed. He argued that considering the impact of intellectual property on black cultural productions and the treatment of black artists could offer opportunities to strengthen artists’ rights, improve antipiracy norms, and provide some atonement for what has been taken from black artists over the years.

He began by saying that the copyright system doesn’t address modes of black cultural production, for example by requiring fixation when black music is often improvisational. In addition (and perhaps at the other extreme), copyright’s low standard of originality, allowing minor variations to be copyrighted but affording no protection to ideas, means that black innovators end up contributing the “idea” that gets appropriated and commercialized by white artists. Formalities historically also posed problems for artists who didn’t know what they needed to do to retain rights. Thus, black artists have had value expropriated in a variety of ways, from the blues to now. Copyright today still hurts black artists – Public Enemy’s “wall of samples” effect can’t be repeated today because labels require clearance of all samples, which is impossible/prohibitively expensive to get.

As Larry Lessig has pointed out, the history of the copyright industries is that they use others’ creations without payment to jump-start the market; this is particularly true with black artists. If we consider compulsory licensing as a response to current problems, why not consider atonement? In reparations discussions generally, opponents often protest that it’s hard to identify who got screwed; that’s less true when we can point to artists who died or are struggling in poverty (one of Greene’s examples was Jelly Roll Morton).

As one measure of the importance of black artists to copyright, Greene noted how many big IP cases involve black artists. The leading case on fair use, Campbell, had black defendants; Murray v. Nat'l Broadcasting Co. Inc., 844 F.2d 988 (2d Cir.1988), the leading case on protection of ideas in New York is about the idea behind the Cosby Show; etc. I’d be very interested to hear him say more about cases in which both plaintiffs and defendants are black – including many of the sampling cases, Murray, and the Ringgold case on de minimis use.

One notable feature of this history, Greene said, is how many black artists have continued to create without being paid (though the relative return of art versus other occupations open to the artists might also have something to do with this).

Greene also argued that we should judge an IP regime by how it treats people at the bottom – I found this claim to be a provocative application of Rawlsian-type reasoning, and would love to see more discussion of it.

How does this link up to file-sharing? Both the RIAA and black artists face a situation of mass appropriation, though the RIAA is in this position because of technology, not legal regimes or discrimination. The RIAA confronts a culture of lawlessness: People think it is okay to download. The film and music industries are heavily implicated in the history of discrimination, and people who download often know this (though I'm not sure how many of them, especially the white ones, think they're striking some sort of reparative blow -- couldn't whites downloading black music be just another link in the chain of uncompensated appropriation?). Perhaps some moves towards atonement would help rehabilitate the content industries and help anticopying norms. Sometimes labels have offered token payments to expropriated artists, but Greene believes that more could be done.

AALS Art Law Panel, part three

2006 AALS Meeting, Jan. 6, Section on Art Law
Art Law and Intellectual Property Law: Convergence and Conflict

Christine Haight Farley addressed the question of commercial artistic speech, and whether there should be an exception in right of publicity/privacy law for such speech.

She spoke about the work of Philip-Lorca diCorcia, a critically acclaimed American photographer. Her summary: DiCorcia does street photography; many of his pictures look spontaneous but are actually highly staged. He uses hidden lights to give the photos an “eerie and cinematic glow,” capturing subjects, even in public, in deeply contemplative poses. The photos are voyeuristic, inviting us to construct a story about and analyze the psychology of his subjects.

DiCorcia took pictures of people walking through Times Square, without their knowledge or consent. He took thousands of pictures and selected a few for a show. Understandably, the subjects’ expressions are very natural. Blown up to monumental size, and captured by the special lighting that makes them look like they’re in a spotlight even in a photo taken during the day, they look like celebrities – giving a “cinematic gloss to a commonplace event,” Farley said.

The photographs sell for $20,000 each, and a catalog of the show sells for $30.

One of DiCorcia’s subjects was an 84-year-old Orthodox Jew. He sued the artist, the gallery, and the publishers of the catalog under New York’s statutory right of privacy/publicity, which requires written consent for advertising or trade use of a likeness. He is reportedly upset that the artist benefits financially from a photo of him, though he also objects to the creation of a graven image.

New York law makes an exception for “artistic expression.” But artistic expression is often done for profit, just like many other human activities. When art and commerce are both present, which shall prevail? Kozinski in the Barbie Girl case says art trumps commerce, while the Second Circuit has tended to balance the interests. Other cases just look at whether the artist is making money (here I presume Farley was referring to the Tony Twist case).

A dichotomy between art and profit is false: Artists do make money and they want to make money. Farley believes that courts do have to decide whether a contested work is art, but out of discomfort with judging art they usually seek to avoid it, leading to some sort of balancing. One way to avoid the problem is to beef up the requirements for what constitutes commercial speech, so that most things don’t qualify (and then only apply publicity law to commercial speech); she likes this approach. There’s a mess now in terms of the definition of commercial speech, which Congress is trying to address in reworking dilution law. It’s hard to state a consistent principle in statutory language.

In Farley’s opinion, focusing on what is art would make for easier cases. Barbara Kruger’s composite art, for example, clearly qualifies: It’s shown in the Whitney, people react to it as art, etc. But what about the harder cases? We need a clearer rule about what’s a potentially infringing commercial use. Trademark law has historically been clearer than copyright about this.

In the comments period, Glynn Lunney asked about the difference between diCorcia’s work and Girls Gone Wild, a video series that has generated right of privacy claims from young women who didn’t expect their Bourbon Street antics to end up in neighbors’ living rooms. Farley doesn’t want to protect Girls Gone Wild, even though it’s film. She’d prefer to use some distinction like the (presumably thin) resume of the filmmakers or their desire to sell an infinite number of copies instead of being satisfied with a limited edition.

I don’t find these distinctions persuasive (though I note that Farley did not have a chance to develop her points, since everyone was working very hard to stay within the allotted time). A lack of current recognition/pedigree shouldn’t matter, since it’s both over- and under-inclusive in terms of artistic merit -- the over-inclusiveness is usually overlooked in these debates, but I think it’s important too. Likewise, the number of copies doesn’t seem that important to me: Is art only available to an elite? Is Tropic of Cancer not art? Contrariwise, wouldn’t the publisher of diCorcia’s catalog have been happy to sell a million copies? Couldn’t Girls Gone Wild produce a limited edition “Best Of”?

AALS Art Law Panel, part two

2006 AALS Meeting, Jan. 6, Section on Art Law
Art Law and Intellectual Property Law: Convergence and Conflict

Sonia Katyal spoke on artistic disobedience and market failure. She argued, as part of a larger project with her colleague Eduardo Peñalver, that disobedience could have a productive effect, highlighting the need for change in overly restrictive IP law. Conscious challenge to law can thereby produce dynamic legal changes in entitlements through legislative and judicial actions. Disobedience, in other words, can be a signal that a market failure has occurred.

In Campbell v. Acuff-Rose, the Supreme Court intervened to cure a market failure relating to transformative use (and it’s useful to remember that the case settled on remand). The copyright owner’s non-economic reasons for refusing to license parody were the relevant market failure; in this, Katyal’s analysis goes back to Wendy Gordon’s foundational work on fair use and market failure. I have to admit, I don’t quite get why non-economic reasons are evidence of market failure: Perhaps my personal valuation of my IP is just infinite; if I refused to sell you my house, even though you offered me three times the market value, because I really like my house, that wouldn’t be a market failure. In a world where parodies (and satires!) are increasingly licensed within large corporate groups, however, perhaps there is a story to tell about transaction costs in negotiating with independent/unknown/unfamiliar artists, though then the “parody” part seems less important than the general problem of negotiating over hard-to-predict value.

Katyal discussed several other similar cases of parodic/transformative use – The Wind Done Gone, the Food Chain Barbie case, Dungeon Dolls – and here I started to wonder why all these transformative fair use cases involve the sexualization and mockery of women’s (or dolls’) bodies. (The Naked Gun case, the Starballz case, and the Barbie Girl case are the same.) In fair use cases, sexualizing a text is treated as automatically constituting relevant commentary on the original. By contrast, adding in violence may well not be transformative, as with The Cat NOT in the Hat! -- I’m willing to bet that making the Cat in the Hat a child molester instead of just a spouse-killer would have counted as fair use -- though the “Chicken Step on Barney” case shows that adding violence can be the foundation of a successful fair use.

But I digress – Katyal then turned to the historical precedent of situationist art, which posed theatrical challenges to consumerism, attempting to pierce the veil of the society of spectacle. (I really like the idea of a book with a sandpaper cover, such that it would destroy the other books on the shelf with it – sort of like really buggy DRM.) A more modern example would be the Grey Album day of disobedience during which people were encouraged to download the mashup of the Beatles’ White Album and Jay-Z’s Black Album.

Resistant art of this type, if it incorporates copyrighted works, does so without permission, but is also not likely to be considered transformative because of its lack of direct critical commentary on the original; at most, it will recontextualize the original, like putting a urinal in an art gallery. Katyal pointed out that copyright law’s two kinds of “protection” – protection for the copyright owner against unauthorized copying, and protection from liability for the fair user – are two peaks on either side of a spectrum of uses, but there are also activities in the middle of the spectrum. Deliberately disobedient uses in this middle range may signal the need to reform copyright law, perhaps by compulsory licensing. Katyal’s paper Semiotic Disobedience discusses these issues in greater detail, though it doesn’t seem to be available at SSRN.

Finally, Katyal discussed the role of private underenforcement of copyright law. No one was sued over the Grey Album, despite some threatening noises (and despite the well-known willingness to litigate of the music industry). The formal system prohibits many types of appropriation, but informally copyright owners tolerate a lot, especially when public relations nightmares are at stake. The music industry has been willing to bear PR hits, but with the Grey Album apparently the copyright owners concluded that it wasn’t worthwhile to go after people who were only copying the mashups. I personally found the Grey Album only interesting as an experiment, not as music I’d like to listen to again; I expect most of the downloaders didn’t use it as a substitute for purchases of Jay-Z or Beatles albums.

AALS Section on Art Law, part one

Latest in a series of posts on the panels I attended at the Association of American Law Schools this year. My notes are not complete and record my own impressions; they may not accurately reflect everything that occurred.

2006 AALS Meeting, Jan. 6, Section on Art Law
Art Law and Intellectual Property Law: Convergence and Conflict

Cyrill P. Rigamonti, a research fellow at Harvard’s Berkman Center, spoke about net art and the theory of moral rights. He used the example of Cornelia Sollfrank, a German artist who commissioned a program called the net art generator. It creates pictures based on Google search results. You type in a search term; the program finds 4-8 matching pictures and manipulates them in various ways, with an element of randomness. The result is a composite picture plus information about the source pictures. Because of the random elements, the chance of creating the same picture twice is quite low. Sollfrank entered the same term again and again to create a themed set of pictures. She wanted to show a room full of the printed-out results, but the art gallery she worked with refused, because her pictures seemed to be unauthorized derivative works of Andy Warhol’s Flowers.

Andy Warhol's Flowers:



Rigamonti showed a picture of one of her results, and that seemed like an accurate characterization to me. I tried "Warhol flowers" at the art generator myself. The version I used, net art generator #3, allowed users to select 2, 4, 6 or 8 source pictures; this first set used 8:


Using 2 images instead produced these results:



Though it's hard to see in the small version, that third has some neat distortion, but they're all pretty recognizably based on Warhol's Flowers.

Warhol himself used Patricia Caulfield’s photo of flowers without permission to create his works; he settled the resulting copyright suit for $6000 in royalties (rejecting Warhol’s offer of 2 paintings instead; bad decision, or principled one?). Warhol also gave silkscreens to the appropriation artist Elaine Sturtevant, who used them to create works called “Warhol Flowers”; he apparently believed that she knew more about his technique than he did.

Sturtevant's Johns Flag (I couldn't find a picture of her Warhol Flowers):



Sollfrank’s response to the gallery’s concerns was to videotape four interviews with copyright lawyers reacting to the issue and showed them on four different screens for her exhibit, creating a babble effect.

Are such pictures derivative works? They were created by machines, thus perhaps lacking the necessary creative addition to qualify as independently copyrightable derivative works. Or perhaps we need some concept of co-authorship with the person who enters the search terms and the person who wrote the program.

According to Rigamonti, Sollfrank’s work challenges the theoretical foundation of moral rights – the claim that works embody an author’s personality or personhood. What are the functions of moral rights, and how should we think about them in the digital age? (1) Art preservation – though Germany doesn’t use moral rights for this purpose, as graffiti artists found out when they couldn’t protest the destruction of the painted Berlin Wall. (2) Copyright substitution, to allow continued authorial control if the author transfers economic rights. (3) Setting default or mandatory terms in copyright contracts; this matters if the accused infringer of moral rights is the copyright owner.

Rigamonti suggests that we should rethink these foundations, and particularly that we should examine how moral rights are used in practice instead of trying to cram all these objectives into one theory. Though I agree with this conclusion, I have to admit, I’m not too clear on how Sollfrank’s work operates as a challenge to moral rights: It seems like a devout moral rights proponent would be able to say that what she does isn’t art and therefore, though it can violate artists’ moral rights like any form of defacement, it can’t make competing claims to protection for Sollfrank’s personhood.