Session 3, Copyright and Trademark Intersecting
Jennifer Rothman, Customary Intellectual Property. Rothman starts with TJ Hooper case from torts. Whose province is it to determine best practices, courts or industries?
Three problems with using custom in IP: (1) Customs develop in the context of avoiding litigation and preserving relations, as with the “clearance culture.” They’re not meant to apply to end-game litigation where relations are already disrupted. (2) Customs include suboptimal practices developed by interactions with non-repeat players. Large players have an easier time proving their version of custom in court. (3) There are just too few repeat players and ongoing relations in IP to justify resort to custom.
She’s not saying custom has no role. It may be evidence, as in trademark law where we assess likely confusion. Because of product placement, consumers are more likely to think a product that shows up is licensed – that’s a legitimate use of customary evidence. Likewise in contract interpretation where terms have specific meaning in an industry, custom has relevance.
Courts are already incorporating custom, so, if we’re going to use it as law, let’s at least say what we’re doing. Courts are now using custom implicitly rather than explicitly which makes it incoherent.
Principles for legitimate reliance on custom: (1) The party must have agreed to the custom or have opportunity to dissent. (2) The party must have known of custom. (3) Custom needs to be reasonable, so we assess public policy. (4) Customary agreements within industries such as gentleman’s agreement between publishers and libraries shouldn’t be applied to nonparties. (5) Custom should be applied equitably – right now it’s only used to reject defenses and never to accept them or expand fair use.
This analysis makes reliance on best practices statements problematic. They will likely be used as maxima rather than minima. Rothman wants to highlight the need for dissent. Customary law develops when people have the opportunity to consent. When they haven’t, we need to make clear that people dissent from “customary” practices.
Mark Lemley: Additional factor: Custom should apply if we can see the existence of a two-sided and not just a one-sided norm. If only copyright owners believe X and nonowners believe Y, neither norm should be adopted because neither is really a norm.
We can separate customary practices (behavior) and customary law (belief). For trade secrets, for example, we look at behavior rather than belief, since people may never have thought about the rules. We may want to distinguish between trademark-like beliefs that authorization is required and actual practices, and apply the practices instead. Rothman agrees that, though there is a feedback loop, it’s worthwhile to distinguish the two.
Matthew Sag: Technology changes customs – the shift from mix tapes to file-sharing. Do we allow the custom to port to the new technology? Response: This is where a legal vacuum may exist and get filled by customary practice, for example with photocopying technology where people decide that copying for scholarly purposes is fine and then publishers decide that there’s money there, and get courts to back them up.
Another example for the paper: NCAA would license marks to the broadcast network showing its games. The network didn’t care because it just wanted to broadcast the games. The licenses became useful against other parties when the NCAA used the licenses to show that it had rights against any use/display of its marks.
Greg Lastowka, Digital Attribution: Copyright and the Right to Credit. What are the ways we can recognize attribution interests in law? Copyright now is pretty limited, as is trademark after Dastar.
Advertising law is a possible source of useful principles. It’s hard to differentiate advertising content from other forms of copyrightable material, especially with things like product placement and viral marketing. Copyright law has generally ignored advertising, but it’s a big source of creative content and it’s supported, essentially, by attribution to the advertiser.
Proposal: Modify fair use to put attribution in as a fifth factor, borrowing language from orphan works. A shift from copyright as property to copyright as reputation-enhancing production is going to be long and complicated. His claim is not normative but descriptive: this change is happening and the law needs to react.
Comment: Didn’t Kelly take the link back to the original into account in finding fair use? You can use the positive economic effect on the original as a proxy for attribution, since attribution is what produces the positive effect.
Jennifer Rothman: What about subconscious copying? Wouldn’t this imply that such copiers should always be liable? And how far back to you have to go (as the concern was in Dastar)? Answer: We should fashion attribution rights along the lines of trademark. Credit for diffuse contributions, as with movie credits, is too broad – you should only require identification when there’s a substantial borrowing.
What about wrongful blame, such as copyright owners who object to being named? Courts can work out false attribution problems, such as a trademark lawsuit spawned by the fact that the user gave credit. Society can be harmed by the failure of attribution as an incentive to create (a copyright harm), and also by misattribution of a creation to the wrong person (a trademark harm).
James Gibson, Risk Aversion and Rights Accretion in Intellectual Property Law. This paper has strong resonances with Jennifer Rothman’s, above. The reach of IP entitlements naturally and organically expands over time with relatively little dependency on the positive law, because of risk aversion and licensing practices by ordinary market participants. Gray areas become less gray because licenses are common, and then there’s a whole new gray area. It doesn’t matter whether courts sanction the new regime, though that’s nice for copyright owners, but practitioners know the licensing culture and generally follow it.
Trademark’s feedback loop is a little less pronounced because it filters through consumer protection, but the dynamic is the same. Product placement, merchandising, and the like offer lots of benefits for the parties, so they agree to licensing deals. It’s not just risk aversion but cross-promotional opportunities. But it affects consumer perception because consumers absorb “persuasion knowledge” about marketing practices and then come to understand things like product placement as something authorized. It doesn’t sneak past consumers’ defenses any more, and by the same token they think that it is done with the trademark owner’s consent. Result: further expansion of entitlements. (Expressive defendants’ increased reliance on “use in commerce” and nominative fair use may then be the same phenomenon as the increased reliance on fair use in copyright.)
Patent law generally doesn’t take account of licensing in most circumstances, so this doesn’t happen.
Are there any solutions? Less standards, more rules? That has problems of complexity and rights expansion of its own. Courts will have trouble too; risk-averse entities will comply with the law in the most rights-protective circuit. Perhaps a move to liability rules? That largely depends on your view of liability rules and hold-ups.
Follow patents’ lead: Courts shouldn’t simply ask whether there’s a licensing market but why there’s a licensing market. Courts already say that the fact that the defendant sought and was refused a license shouldn’t weigh against the defendant, and they should expand on that. Likewise, in trademark courts should impose a materiality requirement, even if consumers think there’s been a product placement.
Observation: Even among the relatively powerless community of independent filmmakers there’s strong support for a clearance norm, because they see themselves as creators.
There have been some moves in that direction, as with the filmmakers. But the insurance people are the ones who need convincing.
Mark Bartholomew & John Tehranian, The Secret Life of Legal Doctrine: The Divergent Evolution of Secondary Liability in Trademark and Copyright Law.
Two-part problem: the expansion in secondary liability theories for copyright, coupled with the lack of expansion in trademark secondary liability. Both IP regimes derive from the same origin, the common law of torts and agency. Courts deciding dual claims often refer to these common origins to justify their eventual holdings, even though the Supreme Court has said you can’t move from one to the other. The result is an unclear and unprincipled situation which allows for too much wiggle room and not enough clarity for market participants. The authors suggest that the myth of romantic authorship, combined with the panic over digital technology, produced an expansion of copyright liability that didn’t occur with the purely corporate property of trademark.
Comment: TM infringement may be more unpredictable than copyright infringement, given the digits of confusion, so the monitoring cost may be much higher for trademark and the harm allowed relatively law. Response: You could argue that copyright fair use is just as/more nebulous. In the Lockheed case, it wouldn’t have been that hard to tell NSI to maintain a list of major corporations – easier than maintaining a list of song titles as Napster was supposed to do.
Comment: Maybe TM owners don’t want expansion because if they had to police secondary liability or risk abandonment they’d have to invest inefficient resources in policing.
Comment: Our copyright cases seem to be more often about the technology of copying – the category of “printer” is now bigger than it was – but technology itself drives copyright cases in ways maybe it hasn’t driven trademark law. (Seems like Eric Goldman’s work on search engine liability applies here.)
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