Thursday, January 12, 2006

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?

No comments: