Saturday, September 30, 2006

TPRC: Return of the commentators, and Q&A

Faulhaber: The tone of these remarks is different from the book. The book says the whole world is changing, it’s all new. (Note: Though I believe in multiple readings, I think I read the book that Benkler thought he wrote, which is perfectly consistent with his remarks.) Faulhaber agrees with Benkler’s criticisms of copyright, so he plans to tear out the front page of the book and republish it under his own name.

Sohn: Of course that’s not what Benkler said. Rather, he argues that the history of large companies using copyright has resulted in less production, not more. He said nothing about stealing.

There are plenty of places where accreditation and relevant information is found. The difference is whether it’s user-driven. YouTube kicked up the net neutrality debate by widely distributing the Stevens “the internet is a series of tubes” speech (and remixes); it has possibly affected George Allen’s political future by popularizing his “macaca” remarks. Even if there are plenty of trivial videos there, it’s already making a difference.

Benkler understates the extent to which entrenched industries use regulation to stifle competition out of desperation.

Noam: (1) Benkler sounded much more reasonable in the presentation. User-generated content is important, but it’s only one of many ways, whereas the book seems to say it’s taking over the world. (Here I started to wonder about the shift to “user-generated content” from “peer production.” Isn’t CNN a “user” of information? What ideologies are assumed in this terminology? Benkler also made the point later that “user-generated content” is a subset of peer production, though I’d probably say rather that there’s a Venn diagram overlap between them.)

(2) We should discuss the negatives of networks. Diebold is a great story of unsuppressability, but there are other examples. (Like unsuppressable dissemination of major label music, maybe.) The effects of populism on politics may not be good.

Cohen: One important question is about the interplay between mass commercial culture and what people do with it. Lots of smart people at AOL, Disney et al. realize that mass culture depends on pop culture. They are not so much interested in stomping out participation as in conditioning it on staying within certain channels (venue, good taste, etc., as with the new Warner deal with YouTube that lets Warner remove fan videos instead of sharing revenue from them). Current stakeholders hope to use the internet to intensify and exploit our fascination with television – that’s one vision of interdependence, in which popular desires are coopted and channeled.

But lipsynching on YouTube is the kind of thing 12-year-old girls have always done. Cohen’s aim: The terms of your interaction with pop culture will not be completely framed for you by someone else. We need to research those terms and how they’re changing.

Weiser: Benkler challenges us to take peer production seriously on its own terms rather than assuming that it has to stack up against television (which it can, in some cases).

David Waterman, Indiana: Established media dominate through marketing and distribution, allowing them to raise funds and produce quality materials. Can we see peer production as a talent selection mechanism? It encourages more people to experiment, producing job interviews for the mainstream media, improving the established players.

Benkler: He tries to emphasize that selection is a discrete information problem and peer production is applied to it no less than to the initial flow of information. Agenda-setting can be unbundled from selection and from the ability to generate, store, and distribute information. The comment assumes that the public sphere continues to rely on the same actors’ judgment, but peer production improves the quality of that judgment. Benkler argues that agenda-setting and selection itself is also affected by peer production.

When you’re looking at a relatively limited number of channels, 3 or 500, you still need a relatively broad audience. With millions of people, the selection is inverted: you look for information that’s intensely interesting to engaged people rather than moderately interesting to many.

David Post: Is it coincidental that the internet is itself a consequence of peer production? [Hmm. I seem to remember a debate about this on cyberprof.]

Benkler: Hasn’t thought about that. Because current trends come from bootstrapping on initial capability, it’s worth thinking about.

Mike Nelson, IBM: Nelson is very worried about efforts to inhibit the next generation through standard-setting. ITU is developing the next-gen network, including bottlenecks allowing companies to shut down Skype, YouTube, or other “noncompliants” at the network layer.

Sohn: We aren’t paying enough attention to this in policy circles. [I think that’s what she said but I may have misheard her.]

Stuart Benjamin, Duke: Are we worried about information cascades, creating like-minded neo-Nazi groups? Deliberation leaves people more polarized by reinforcing their views.

Benkler: The one study he knows indicates that right-wing blogs link to left-wing ones marginally better than vice versa. One in six links is across the divide, which is actually pretty good, given that in normal conversation we spend lots of time reinforcing each others’ perceptions. It’s all a question of baseline (Fox or InstaPundit?). Compared to the past fifty years, it’s an improvement.

There is no question that terrorists use the internet. The internet makes human action more effective, and some humans are bad. It’s a policing problem. But will strong copyright (or pay-as-you-go instead of net neutrality) make the internet less useful for terrorists? If the internet gives us a neo-Nazi congregation, have we undermined democracy or complicated policing? At least in the US, Benkler doesn’t think we’ve caused harm to the construction of the public sphere – the concentration may make the neo-Nazis more visible in good ways too.

Polarization means that people don’t talk and don’t see each other. Fringe groups cohering on the fringes, and possibly getting more dangerous, is a separate problem.

Cohen: The question presumes that we can avoid information cascades and get to the right decision. She doesn’t think that is correct. The nice thing is that the open architecture of the internet lets you see that cascade happen. On Nelson’s question about standards: governance questions are being played out in standard-setting. Decisions will have cascade effects on lots of behaviors but we don’t see those decisions. That’s not better.

TPRC: Benkler speaks

Yochai Benkler, Yale: I would recommend not relying on a mildly obscene caricature in lieu of reading the actual book.

The cost of starting a daily newspaper in constant dollars has shot up over the century, which bifurcated us into producers and consumers. But now costs are changing in a different way. In raw teraflops, SETI@home dwarfs single supercomputers – though both are well above where they were two years ago. The result is a radical decentralization of capitalism: 600 million people have the physical capacity to communicate on the internet. Inputs into core economic activity are widely distributed in industrialized nations for the first time since the Industrial Revolution.

Peer production involves large-scale collaboration without price signals or in-firm direction. Peer production behaviors have always been there, but they’ve changed salience. You still can’t produce with your friends on the weekend a car that will compete with a Toyota, but you can produce something that competes with Britannica.

If peer production is not notable, then Apache’s share of the server market is unsurprising, Wikipedia’s ability to compete with Britannica is old news, Bill Gates surely anticipated that Corbis would have to compete with Flickr for stock photography – peer production isn’t new, but its effects are.

A novel or Hollywood movie can’t be done through peer production – the point is to figure out what can be done. How do we resolve questions of cooperation through mechanisms like granularity?

There is a related shift from well-behaved appliances like TVs and CD players to production tools like PCs. The bifurcation between commercial and consumer goods is blurring.

Businesses are trying to figure out how to use this. IBM is making more money from Linux services than from patents (I think I missed a qualification of this claim – don’t blame Benkler if this is inaccurate). The BBC is getting cellphone pictures for reporting on things like recent bombings. Google captures individual judgments about relevance, builds Blogger to generate more content, allows annotation of maps, runs on GNU/Linux servers. This isn’t a fad or bubble 2.0, but a sustainable and growing movement. But it is a threat to and threatened by incumbent business models which seek regulatory intervention. Examples: software patents, attempts to mandate trusted systems. These regulatory interventions are the key to the future.

The internet is a source of democratization. In 2002, the mainstream media didn’t cover the rollout of voting machines, but one activist got ahold of some Diebold files and posted them for anyone to look at. One academic did so and found interesting results. Someone sent the activist a bunch of Diebold emails and put them up. She got a DMCA letter, but copies had already spread to Swarthmore and elsewhere – they could not be suppressed. The content of the emails revealed that voting machines had not been properly certified in California; the revelations led to decertification of many machines. The Swarthmore students ultimately won a court case against Diebold, but that came long after the election: The internet was the source of democratization.

The first generation critique of internet democratization is that it will lead to a Babel of chattering voices.

The second generation critique invokes power laws to say we’ll all still be watching blockbusters, so nothing will change.

Benkler is Goldilocks, as he discusses in Chapter 7 of Wealth of Networks. He is making an empirical claim that the internet supports topical clusters of interest and mechanisms of peer review that move certain information up in visibility. We are not all pamphleteers, but we are not all lemmings. These changes make us more free, not completely free.

TPRC on Peer Production: Opening comments

TPRC, The Promise and Perils of Peer Production: Evaluating Benkler’s Wealth of Networks, moderated by Phil Weiser, Colorado:

Gerald Faulhaber, Wharton: Is social production a revolution? Of course it’s not new. Volunteer teachers, coaches, fire departments, newsletters are social production. What is new is change in costs. Social production isn’t the only thing affected by decreased cost of production – consider retail financial services. (I’m pretty sure Benkler recognizes these points.) Microsoft may badmouth open source, just as it badmouths Oracle; we shouldn’t expect Bill Gates to roll over because our hearts are pure.

Benkler offers a standard characterization of private property as a right to exclude, but also as a right that lets corporations control what we see and hear. Media moguls bend us to their will. He doesn’t think competition overcomes these problems because of transaction costs, so befuddled consumers can’t make free choices. (Wow. Way to dichotomize and ignore degrees of freedom.) Someone should tell the networks this because they’re now deciding which 60% of shows to cancel because they couldn’t get us to watch them, and the movie studios also can’t seem to staple us to the seats.

Gigi Sohn, Public Knowledge: Likes Benkler’s sense of optimism. He’s not arguing that networks create utopia or are the ultimate in democracy. But it’s a hell of a lot better than a top-down, centralized, mass-media system we’ve had for the past hundred years.

The term “governance” makes her nervous. That’s not behind the success of open source, Wikipedia, and Second Life. Rather, a policy of openness, modifiability, and transparency – an ability to have a discourse about what the community is doing – is behind these successes. Individuals have to make choices rather than get top-down instructions.

Julie Cohen, Georgetown: There are new things about infrastructure that favor peer production in certain ways, and Benkler urges we make the most of that. It’s hard to generalize about governance because there are so many different examples, so she’ll say something about Wikipedia. Wikipedia is fabulous. There’s a current effort by the Association of Internet Researchers to create a trusted Wikipedia, to avoid problems of authentication and verification, to certify a subset of Wikipedia articles as “trusted” and peer-reviewed. This provoked a lot of debate about how to do it and whether it would be a good idea. She’s not sure it’s a good idea, because Wikipedia allows a conversation about how authoritative knowledge is produced.

We had taken it for granted that there’s a system of peer review and certification that worked, and that there were obvious ways to organize knowledge (Library of Congress classifications), but Wikipedia exposes these things as up for debate. Peer review is good, but we all know it has its defects, and existing systems of academic certification of knowledge function to perpetuate bitter feuds about small things, to entrench the knowledge of certain cliques, and to do other things that aren’t necessarily aligned with fostering knowledge. We might still end up saying Wikipedia made a mistake in any particular instance, but comparing the two is an important thing for scholarship and for pedagogy – teaching your students to distinguish between the systems cultivates critical thinking in new and useful ways. Conversations about problems in Wikipedia are valuable in themselves, by encouraging scrutiny of what and how we know.

Another area: Blogging by people on both sides of Israel-Lebanon conflict sought to open up new windows on what was going on. Rapidly this raised questions: were the photos altered? How do you know what these people say is true? You don’t know. But that’s worth talking about: How do you know what mainstream journalists say is true? The answer sheds light on critical thinking generally.

Eli Noam, Columbia: We meet in physical space, about a physical book sold in private stores (though also available free on the internet), written by a single author, whose major collaborators are physically down the hall from him. Yet Benkler also says everything is different now, networks change everything. This is a tension in the book: Things are pretty much the way they’ve been. Of course it’s possible to organize things in open source, peer production ways. But networks also make other organizations possible, like the amazing gatekeeping role of just two private companies, Yahoo! and Google. Broadband and electronic auctions (eBay) are highly concentrated, which concentration is also enabled by networks.

History: every generation thinks it’s invented sex. Every generation also thinks it has found the way to overcome capitalism. There are centuries of experiments in socialism and anarchism of various stripes, kibbutzim, collectives etc. What is required for these systems to work?

Economics: Benkler sets up a straw man by defining economics very narrowly. Utility, hedonics, incentives, collective action and other concepts are part of economics. Voluntarism usually is about the fun stuff: writing scripts is fun, setting up lights is work (after the first month), which is why we end up paying people to do it. It’s true that tech has decreased some barriers to entry, but has increased others. We’re flooded with content, which means we have to improve the quality to compete, which is why films and newspapers have become more expensive to produce – if you look at cost weighted by viewership, mass content is becoming more expensive. This is where the organizational form of the firm, whether BBC or ABC, comes in.

Of course there’s room for peer production, often to generate a critical mass supporting commercialization. Example: radio, where amateurs created buzz, then entrepreneurs came in. Then the entrepreneurs used the political process to squeeze amateurs out.

Benkler, in the inverse of the joke about economists, is a man who knows the value of everything but won’t talk about price.

Sweeney Todd in the blogosphere

I just got the strangest promotional email I've received yet. I get law-related link exchange "offers" from time to time, but this one referred to my entry on Law & Order: Special Letters Unit and suggested I'd be a good promoter of Showtime's new Dexter, a drama with a well-adjusted serial killer protagonist.

As it happens, I have already seen the first episode, which is available on Showtime's website. I may be a hypocrite, because I adore Sweeney Todd and I loved Profit (also about an eponymous multiple murderer, played with panache by Adrian Pasdar, who later starred in Blood Trail and now plays a sleazy politician on Heroes). But on Dexter we're asked to root for a guy who tortures people to death, which is okay because he is always careful to only go for bad guys. In a combination of CSI and snuff film, the depiction of the blood and gore is loving, though somehow we only see either screaming or consequences. That is, we never see Dexter himself sawing through a living limb -- maybe that would make it too hard for us to like him. When we get to know him better, perhaps that will change. The production values are great, but I can't help thinking that this is a very strange use of the term "values."

I love a lot of things about pop culture. But I wonder if there's a connection between the penetration of advertising to every corner of existence, from legal blogs to the formerly dark tunnels of the Washington Metro, which now feature ads from Target in a sort of kinetoscope effect, and the content of what's being sold. Dexter is our new enforcer, Hannibal Lecter has moved from bogeyman to protagonist, and we will measure their merit by their success in the marketplace.

Sweeney promises,

We'll not discriminate great from small!
No, we'll serve anyone,
Meaning anyone,
And to anyone
At all!

Showtime's marketing of Dexter delivers on Sweeney's promise.

Thursday, September 28, 2006

The difference between 20,000 and 1,500

As it turns out, without sufficient evidence, the difference is not a Lanham Act loss.

Select Portfolio Servicing, Inc. v. Evaluation Solutions, L.L.C., 2006 WL 2691784 (M.D. Fla.)

Plaintiff and defendant are competing real estate companies that assess the value of residential real estate. Defendant’s principals are former employees of plaintiff. (There are complications of corporate form that are not relevant to this discussion.) Plaintiff sued on a variety of theories; the only one I’ll discuss is the Lanham Act claim, on which the court denied preliminary relief as it did all other claims.

The Lanham Act claim was based on defendant’s advertising that it had a network “20,000 strong” of affiliates who could provide reliable appraisals. In fact, defendant only had about 1,500 brokers and appraisers – and lamely claimed that “20,000” was puffery, which it quite clearly isn’t since it’s both specific and believable.

Though plaintiff had evidence of actual falsity (indeed, the defendant’s puffery claim was a concession of falsity), the court found that plaintiff hadn’t met its burden on the other elements of a Lanham Act claim, which it listed as (2) actual deception, (3) materiality, (4) defendant’s products traveled in interstate commerce, and (5) likely injury to plaintiff.

Perhaps the pleadings and affidavits were really bad; this is the only explanation I can think of for why this wasn’t an easy case for enjoining that one misrepresentation. As the court itself noted, in explicit falsity cases courts generally presume (2) and often (3) – and a good affidavit about the business environment should be enough to show for preliminary injunction purposes that purchasers care about whether an appraisal company has a large nationwide network to ensure that it can carry out any requested appraisal. As for (4), it would seem to be inherently part of the “nationwide network” claim that defendant’s services were offered in interstate commerce. Likely injury to plaintiff is the only plausible sticking point, depending on the structure of the industry.

Lesson: Even apparent slam dunks can bounce off the rim on occasion. (The other claims, which the court found even less impressive, may also have influenced the court’s attitude on this one – if the plaintiffs couldn’t provide evidence of trade secret theft and the like, the court may have been in a skeptical mood by the time it arrived at the Lanham Act claim.)

Wednesday, September 27, 2006

Niva Elkin-Koren, GWU's IP workshop

The reading for this was Elkin-Koren’s Creative Commons: A Skeptical View of a Worthy Pursuit. I missed most of the initial presentation, but the basic argument of the piece was that Creative Commons licenses have deep flaws in that they encourage a view of copyright as permeating every creative work, such that uses require licenses, and also increase information costs because of the variety of possible CC licenses.

Her basic take on long term challenges:

Ideology: we need a clear definition of the “free flow of information,” which doesn’t exist in CC.

Practice: limiting choice – the licenses should exclude terms inconsistent with freedom of information, such as No Derivatives.

Goal: In the long term, regulation should be changed, not private action.

Also, the diversity of licenses creates problems of its own – avoidance costs. Free software uses principles to make all the licenses compatible.

Michael Abramowicz: He is skeptical about the critique of no-derivs, a restriction which is often as important as attribution. If I want attribution, I want attribution of the right thing to me.

A: But you can attribute the parts that come from another source, by quoting in a paragraph for example. (Won’t help with fictional sequels or photomanipulations unless you also make the original available side by side. Also, CC licenses don’t purport to prohibit fair uses like quoting.) Now on Flickr everyone is an amateur copyright lawyer; it legalizes a lot of relationships.

Q: How can CC increase information costs vis-à-vis the default of copyright?

A: You don’t know which rights are reserved & what’s permissible. You still have to investigate and use (real) copyright lawyers. In practice it is very difficult to implement CC licenses on a large scale.

Even before CC, people assumed that they could use material on the internet for noncommercial purposes. Now there’s a whole set of choices and licenses, people may decide to put more restrictions – like no-derivs. The concern is that CC may not have made anything much better, and may even have made things worse.

Q: Scientific & technical publishing often begins with support from public money. New proposals say that works created with public money should soon, if not immediately, be publicly available.

A: This should be addressed through legislation. CC and other open content initiatives are second-best.

Q: What about people who wouldn’t post their work without the security of a CC license?

A: If they don’t want derivatives, they should use a license that doesn’t allow derivatives. You can always choose copyright’s default instead. CC pays a price in ideological consistency by claiming to support free circulation of information but also allowing no-derivs. And the presence of that option leads people who might not have thought about it to choose no-derivs. It’s better for people to stay out of CC and make up their own terms, than for CC to have a no-derivs option. (I take it that Elkin-Koren is therefore more disturbed about the ideological inconsistency than the information costs point – or maybe she’d rather say that the persistence of information costs with CC licenses means that all you get from CC is harm to the concept of free information without the promised benefit of easy understanding of use rights. I think she’s exaggerating the information costs – it’s easy to say “CC offers dozens of different licenses,” but they have only certain basic components. But fundamentally I think she’d object to CC with no-derivs even if she thought it improved information functioning, because that would still contribute to the marketization of information.)

Q: Okay, so CC is not as helpful as it wants to be. But I’m still having trouble finding the harm, when you can always rely on fair use or on explicit agreement with the copyright holder. That baseline remains unchanged. Maybe our energies could be devoted to legislative reform instead – is that the harm?

A: Yes. Also, it legalizes the relationships in a way that didn’t exist before. NGOs and bloggers, for instance, now think about copyright when people posting on the internet didn’t bother before, so the net result is constraint.

Q: What about CC’s aid of autonomy interests?

A: It’s always easier for big corporations to license and use others’ work. The more amateurs have to license, by figuring out the CC license, the greater a disadvantage they have versus the big guys. But autonomy is an important issue because it helps explain the conflicting goals of CC licenses – that’s why CC ends up with no-derivs rather than making the hard choices.

Bob Brauneis: Institutional reality –it’s easier for CC to get grants if it’s working on new licensing variants and options.

My comments: Elkin-Koren’s critique of CC seems structurally similar to the critique of no-fault divorce: Even when relationships “work” and thus seem to be the same as pre-reform, all relations are made unstable because the participants now understand them to be choice-based, not status-based. Economic/outside norms start to penetrate into previously non-rights-based realms. People who didn’t think of themselves as rights-bearers/copyright owners now do, and relate more formally to others, taking away the informality and flexibility that previously existed.

When it comes to family law and related areas, this model has been critiqued extensively in Viviana Zelizer’s work, which argues that the divide between commerce and emotion never really existed. We just create different moral and emotional tools to define and manage relationships so that they don’t mix commerce and emotion in the wrong ways. Perhaps here we are arguing about whether using a standardized way of naming the terms on which people want others to use their works mixes creativity and “rights” in the wrong ways, or whether it empowers people to choose new types of relations previously unavailable to them. In other words, is it wrong for an amateur writer or photographer to think of herself as someone who owns copyrights, even though she knows they’re not economically valuable? Does she think of herself in different, worse ways? Does she behave worse towards people who want to use her works? What CC license, what copyright law, would encourage us to think of ourselves in better ways?

(We could also have this discussion in terms of “rights talk” and its utility or disutility to disempowered groups. CLS may be dead, but it’s still pretty.)

A: A Belgian scholar is using feminist theory to analyze CC – that’s worth looking into. Expanding rights is not necessarily beneficial to individuals, who may become more dependent on others’ ability to exclude them.

Elkin-Koren is of course right that entities with more resources benefit more from the legal system than entities with fewer resources. But that doesn’t help much unless you have a clear idea of the baseline – if you’re poor and powerless, that doesn’t mean that getting rid of the law will improve your situation.

I don’t think that the use of no-derivs in a third of CC licenses indicates that CC is making things worse in terms of norms of sharing information. I’m not sure she’s right that “people,” whoever that was, just used to ignore copyright (file-sharing aside), or that such a norm would have persisted were it not for CC. The RIAA and the MPAA have education programs they’re trying to get in every classroom, from kindergarten to college. Elkin-Koren mentioned Jessica Litman’s article Sharing and Stealing, which expounds on this 90s attitude of free circulation, but I was under the impression that Litman thought that big corporate interests were more responsible for any change in this attitude than CC.

Kozinski: Questions and answers

From the question period:

Josh Sarnoff: In light of eBay v. MercExchange, don’t we need to rethink the adequacy of damages prong of the copyright injunction test? The interest at issue (in the Seuss case) is something like a tarnishment/moral right.

A: That’s worth talking about. Don Quixote’s first part was very popular, and people wrote sequels. Cervantes rushed to complete the second volume, then died weeks later. Two points: (1) nobody remembers the knockoffs, because people can distinguish between the authentic and the unauthorized, and (2) we owe the knockoffs a debt! What if Cervantes had felt less pressure? A little competition is a good thing.

Jonathan Band: Doesn’t eBay allow a court to avoid an injunction now?

A: Kozinski hasn’t looked at eBay as a copyright decision. He assumes it applies, especially because of the First Amendment implications of copyright. But his guess is that courts won’t apply it to copyright. We don’t think of patents as moral creations in the same way. They’re just commercial, not personal. You don’t damage a reputation with patent infringement. (Though according to his argument above, you don’t generally damage a reputation with copyright infringement, either. And can’t you tarnish a company’s reputation for having a unique product with patent infringement?)

Kozinski thinks the moral aspects should be handled by trademark/state law, but he isn’t 100% convinced of this.

1L: What about new forms of adaptation, videos, mashups? They’re not coming from just a few established actors like Penguin, but hundreds and even thousands of creators. Could the new mechanism you describe be scaled up?

A: The internet creates enforcement problems distinct from commercial enterprises. This may be something that would require an injunction because people can’t pay. (So much for the First Amendment aspects of copyright!) But first, Kozinski would have to be convinced that remixes materially impair the copyrighted work’s market. If that’s not the case, we’d look at profit. If it’s nonprofit and nonimpairing, what would be the harm? (The circularity problem looms large here. In Kozinski’s world especially, copyright owners have every reason to say there’s always a market, since there’s always a price.)

Internet question: Are you thinking statutory licensing or court-determined rates?

A: Private parties would negotiate first if injunctions were unavailable. If they couldn’t agree, a court would decide.

Q: How does this fit in with the Berne Convention’s 3-step test?

A: Not really sure.

WCL student: If Congress doesn’t take up your proposal, what can we do to fix what’s broken?

A: No real advice. Congress has been more favorable to IP owners because it’s hard for people with undifferentiated interests to lobby, and the Supreme Court seems uninterested in limiting copyright.

Q: The CDA expressly excludes IP from immunity but covers state law causes of action. Where do trade secrets fall?

A: It’s hard to answer that question without an example. In general, the interplay between state and federal law is contentious. Kozinski isn’t crazy about Bonito Boats. On the other hand, we have the Vanna White case, which is a serious interference with copyright in the name of state rights. He hasn’t thought much about trade secrets. By and large he is wary of state-law solutions – the problem is that copyright and trademark are national and state law is piecemeal.

WCL student: What would happen to people deterred from using works, such as fan fiction authors who distribute their creations for free and can’t afford to pay?

A: He doesn’t feel too bad about that. If you want to use another’s story, you’re distributing something you didn’t create. (Comment: The answer seems to miss that this is the same question as the one about mashups, to which he gave a different answer. Also, it’s not what he said about the creativity required to write Dr. Juice.) If people are big fans of the work, you profit in reputational terms – you’ll get a book deal next time. Anything read by millions has monetary value or can be converted into monetary value. (Okay, this really gets my goat. It assumes that everything naturally proceeds into the market, which isn’t true and treats amateur creators disrespectfully, as if they were either just practicing or just failures. Also, collapsing value into monetary value eliminates concepts of noncommercial/nonprofit use and generates the familiar problem of pretending incommensurables don’t exist by creating a universal metric; even if such a metric exists, money isn’t it.)

Q: How would your proposal affect educational fair use?

A: Kozinski doesn’t know enough to know how academic fair use works. He wrote an article in the New Yorker, “Tinkering with Death.” Every so often he gets a letter with a royalty check from educational uses. He’s written many times telling Conde Nast that educational uses of the article should be free and without permission as long as the use is of the entire work. They acknowledge the letter, then later he gets another check. His conclusion: Educational fair use doesn’t work that great right now. (Here’s a suggestion: put the article up on the web, with a CC or even an education-specific license. The unofficial Judge Kozinski site doesn’t have the article, but perhaps it should.)

Kozinski’s view: If an item is directly used by a professor for class, it ought to be free. If it’s in a casebook or textbook that’s making money, that’s different. (Interestingly enough, this is pretty much how the teaching exceptions in the Copyright Act work, or should work!)

Q from BNA reporter: How do you apply your theory to trademark, if at all?

A: Kozinski is less sympathetic to trademark law than he probably should be. The source-identifying aspect is legitimate and deserves injunctive relief to protect consumers. Claims of dilution or simple association are less impressive. Trademark owners don’t like the use of their marks to communicate. When trademarks go beyond source association to linking feelings, ideas, and concepts with a mark, they create a “subtle and perhaps not improper form of mind control.” They want to limit the path of your thinking, create Pavlovian reactions. Kozinski resents it. Once trademarks are implanted in our minds, they aren’t the trademark owner’s exclusively any more.

All in all, an interesting talk. Kozinski has offered his proposal as a practicing judge, not an academic, and that’s reflected in some of the details he hasn’t considered, especially things distant from what’s likely to get litigated in front of him (Berne compliance, educational exceptions, etc.).

Kozinski on fair use and injunctions

Judge Kozinski on Fair Use, part of the Washington College of Law’s IP program:

One of the controversial fair use cases of the past few years: Dr. Seuss Enterprises v. Penguin Books: “One knife, two knife, red knife, dead wife.” Kozinski delivered a Seussian take on the resulting litigation, including the deathless lines “it copies rhymes from here and there, it infringes everywhere!” He tried to get a copy of the book from one of the lawyers, but the lawyer pointed out that there was a federal injunction against distributing it!

He finds it difficult to say the opinion is clearly wrong. When you apply a multifactor test with unclear factors, it’s difficult to be clearly wrong, though you can do it if you work at it. The real issue is that fair use doctrine is a red herring that we should just dump.

Fair use is our legal tradition’s way of grappling with the central issue of IP: at what point does protection start to defeat the very purpose of protection in the first place? There’s no place for a nuanced answer about whether something is fair use – it’s binary. It’s infringing and enjoined, or it’s fair use and you can thumb your nose at the copyright owner while you rake in the bucks. Kozinski is uncomfortable with both solutions.

If the disappointed defendants had libeled a living Seuss/Geisel, he wouldn’t be able to get a preliminary injunction, and he probably wouldn’t be able to get a permanent injunction. Copyright is bizarrely different. Congress has given copyright owners the power to burn books. (A line I’ve used myself.) By contrast, you can publish the secret Pentagon Papers!

Public value isn’t an appropriate distinction between the Pentagon Papers and The Cat NOT in the Hat. The district court might have been right that the OJ Simpson book wasn’t all that good, but it involved creative effort and expressed opinion on a topic of considerable public interest. Well, did the authors need to use the Cat in the Hat? Sure, and Paul Cohen could have said “I strongly resent the draft.” Form is content; restrain words and you restrain meaning.

It takes creativity and hard work to write a sustained satirical pastiche that people will be willing to pay money for. It’s not true that this type of satire is just done to “avoid the drudgery of working up something fresh.” It’s also not true that the satirist could pick something else just as easily. Not all vehicles get you where you want to go. You need to start with an original that’s well-known and that either seems congruous or particularly incongruous with the satirical topic. The Capitol Steps had Paula Jones sing “Don’t Cry for Me Justice Scalia,” and it was useful for their message to be able to tap into our associations with Evita.

IP rights aren’t property sufficient to trump the interests of others regardless of circumstance. IP protection isn’t one of the ends of government, but a means to the end, as set forth in the Exclusive Rights clause. Thus, balancing utilitarian considerations is appropriate. In Dr. Seuss, though, the balancing process could have gone either way, and the result is uncertainty for future authors.

Looking beyond the specific, the question is whether courts should have the power to enjoin infringing works in the first place. Private ownership leads to efficient allocations, but private property can also be used inefficiently, as when you say no to Donald Trump’s offer to buy your home for a billion dollars so he can build a casino. You can say no for economic, sentimental, or mean-spirited decisions. We don’t scrutinize the rationality of your refusal.

What happens when holdout authors inefficiently prevent the creation of value in new works? The analogy doesn’t hold because the secondary use is nonrivalrous. So long as authors are rewarded for their contributions, we could all be better off if derivative works can be created.

We also respect the right to hold out in real and personal property not just because they are efficient but because they are anchors of personal autonomy and liberty. Overriding private property every time it would be socially beneficial to do so would be totalitarianism. It’s not clear that the same things apply to IP. Suppose someone writes a sequel to Harry Potter. (Yes, suppose.) If everyone knows it’s not Rowling’s, does taking Harry Potter deprive Rowling of her character in the same way that taking her car deprives her of her car? Her day-to-day life is the same, her reputation is the same. The only thing wrong is that other people are making money off her creation and she’s not being compensated.

Allowing the Dr. Juice book on the market without compensation to Dr. Seuss would be unfair. Much of the value of the book comes not from Dr. Juice’s authorship but from Dr. Seuss’s. So the plaintiff should have been able to share the profits, rather than to enjoin the work.

A different approach to derivative works would offer a nuanced approach to remedies, rather than infringement. If you use someone else’s work to make profits, or in such a way as to reduce a copyright owner’s ability to profit, you’d be held financially accountable. At the same time, there’d be no right to enjoin in most cases. Copyright owners could only collect actual damages or defendants’ profits. Both parties would thus have incentives to bargain instead of sue. (Comment: This of course assumes that defendants/copiers plan to charge for their works; if they don’t, the system breaks down. The question period got into this a bit.)

What if the copyright owner hates the book? It can still sue, alleging actual damages, and if that were true compensation would be in order, along with a portion of the defendant’s profits.

Copyright owners will oppose this proposal. (Comment: What about fair users? Kozinski worries about Seuss’s heirs hating Dr. Juice, but Alice Randall may not want to pay more money into the coffers of what is in her view the racism-built and –glorifying Mitchell Estate.) But don’t worry about that: Betamax shows that copyright owners aren’t great at divining their own interests. Owners of IP are control freaks. Control is possible only in secrecy, though. Once a work is released to us, it enters our minds and becomes ours as well.

People will find new ways of extracting value from IP that original authors wouldn’t risk. Creators always think they’ve created the perfect work. Sometimes they’re wrong. (Comment: Love is not love that alters where it alteration finds?)

This proposal is unlikely to be adopted. But at a minimum, we should think about when injunctions are appropriate.

Monday, September 25, 2006

Abortion and deceptive advertising

Crisis pregnancy centers exist to discourage women from abortion. They therefore compete with and attempt to divert women from abortion providers. Sometimes this crosses the line into bait-and-switch advertising and promises of services they can't actually provide. Eliot Spitzer reached agreements to prevent this with several crisis pregnancy centers.

Now crisis pregnancy centers are turning the same reasoning on abortion clinics: If they're commercial competitors with abortion providers, they can sue for false advertising. (Defendant's site.) As far as I can tell, the claim is that the clinic advertises under the heading "Abortion Alternatives" as well as "Abortion Providers." I have not seen a copy of the complaint.

These are all state-law claims. It's not entirely clear that either side would have standing under the Lanham Act, since they aren't competitors in the sense of providing the same services, which is the usual Lanham Act scenario. Abortion services and prenatal care are substitutes, but so are bicycles substitutes for cars, and we don't necessarily want to put bicycle makers into the strict-liability, preponderance of the evidence regime of the Lanham Act when they advertise that bike riding is better for the environment than driving a car. Courts have used standing as a way to limit the situations in which this problem arises. The free speech reasons for limiting standing this way are even clearer in the abortion context -- but in that case, using state law doesn't avoid the potential First Amendment problems.

It may be possible to distinguish bait-and-switch (a class of false representations into which trademark infringement falls) from other types of misrepresentations (say, about the safety of abortion). See Birthright v. Birthright, Inc., 827 F. Supp. 1114 (D.N.J. 1993) (applying the Lanham Act to a dispute between two crisis pregnancy organizations, the smaller of which had disaffiliated with the larger but continued to use the same name). So a crisis pregnancy center might not be allowed to advertise as an "Abortion Provider," but if a woman wants to discuss alternatives to abortion, its statements can only be regulated to the same extent as other noncommercial speech -- which, if the center is dispensing medical advice, might or might not allow a fair amount of regulation. Given how much leeway states have to regulate speech by abortion providers, because it's associated with a medical procedure, they might also have plenty of leeway to regulate speech about childbirth, or about the relative risks associated with childbirth and abortion. But if the centers don't provide medical services, we may be back in the pure advocacy/fully protected category -- even as the deceptiveness of the message "abortion alternatives" substantially increases when the centers don't offer prenatal care or other medical care.

On a larger scale, I'm not sure the distinction between bait-and-switch and other misrepresentations can work. For one thing, as the link above indicates, consumers may be misled by ambiguous statements like "Pregnant? Need help?" or even "Abortion Alternatives." If we call that bait-and-switch, we've already decided to regulate a fair amount of what could be deemed persuasive speech.

I suspect many people will find something fundamendally disquieting about thinking of crisis pregnancy centers and abortion clinics as commercial competitors. But we don't have a very good way of talking about businesses with a mission in advertising law.

Wednesday, September 20, 2006

KinderStart: The return

KinderStart’s amended complaint against Google sure is … longer than the original. Eric Goldman covers some relevant points.

The amended complaint contains an extended discussion of Google’s Book Search program which is, I think, supposed to support the idea that Google is a state actor because it’s partnered with state university libraries, as well as to make Google seem like a pirate indifferent to others’ rights. KinderStart alleges, in the same vein, that numerous schools and libraries tell their students and patrons to use Google to look for information and even teach classes on Google use. I guess that means that based on the FDA’s food pyramid and health classes in public schools, Dole and Chiquita are state actors too!

There are portions of the complaint that I found incomprehensible. Example:

63. Defendant further engaged in and continues to engage in anticompetitive and exclusionary practices and conduct as follows

a) Identifying various Websites unfairly and arbitrarily deemed by Google in its sole discretion to be spam or marginal viewer content, and removing them from Google’s index in order to redirect users and valuable search traffic to sites competing against such Websites;

b) Lodging and profiting further from banked AdSense Advertisements onto such sites without the full knowledge of AdSense Partners, by welcoming a stream of search users re-directed from other search engines onto these low-quality sites;

c) Appropriating low-quality sites as a means to unfairly increase the fees paid by AdSense partners to Google for no meaningful absolute gain in uniquely acquired and paid for search traffic;

d) Capturing and retaining such traffic redirected from low-quality sites sent via search results of other major competitors, thereby intentionally degrading the search user experience for these competitors that leads them to migrate to Google as their search engine of choice in the short or long term.

On information and belief, over 50% of sites that have been banned or de-indexed by Google continue to feed in detoured and redirected search user traffic amounting to large amounts of click-through revenue from the AdSense program.

Is this trying to say that Google doesn’t pay AdSense partners according to their contracts? How can AdSense partners have to pay fees for traffic they don’t get? What the heck is “uniquely acquired and paid for search traffic” anyway? If half of banned sites running AdSense are still making money from having AdSense, doesn’t that suggest that the alleged link between AdSense and ranking in Google results isn’t that tight?

A more suggestive allegation: Google discriminates against certain unnamed political and religious positions. Again, this is a case where the complaint needed narrative rather than invective.

Also in the amended complaint: A detailed listing of many times and many venues in which Google has said that its rankings are completely automatic and without censorship. As I’ve noted, I have some sympathy for this claim, but I doubted KinderStart could make a go of it under state unfair competition law. Sensing this difficulty, the amended complaint asserts Lanham Act claims as well, on behalf of (1) a class of directories and search engines who’ve had their PageRanks dinged by Google, and (2) a class of sites who lost AdSense revenue because their PageRanks were decreased by Google. Class (2) seems pretty clearly to flunk the standard standing test for the Lanham Act; those are customers, not competitors. Class (1) is within the group whose interests are protected by the Lanham Act, but it may stumble on causation/harm, a separate requirement that often precludes Lanham Act suits by non-market leaders: Unless Yahoo! is in Class (1), it will be hard to prove that even the aggregate group lost business because of Google’s misrepresentations about comprehensiveness and automated ranking.

If Google continues to tell searchers one thing about how search results are generated and tell webmasters another, it might behoove the FTC – the only entity with a realistic chance of affecting Google – to look into the matter. The FTC has already expressed concern about failure to disclose paid placement. Google does disclose and segregate paid search results (though the complaint now alleges that Google accepts compensation for placement as the top search result – I’d love to see the evidence supporting that claim, because if it were true it would be quite explosive). The concern here is a subtler type of distortion, one that might not be all that material to consumers – but it’s still probably a good idea to say that the index is almost entirely automated, except when manual corrections are made to honor webmaster requests, obey relevant law, or deter manipulation by advertisers. In communications to consumers, that’s the type of thing that could easily be done with an asterisked disclaimer.

The Lanham Act count also alleges that assigning a PageRank of zero to sites like KinderStart constitutes a misrepresentation by a competitor about KinderStart’s goods and services: “Don’t go there; it’s not really relevant to your search.” (This also is the basis for new defamation and libel counts. Here’s a question: How often do Google users see that KinderStart has a PageRank of zero, if they’re so effectively diverted from it?) Again, not a crazy Lanham Act claim, and this one doesn’t have the same standing/harm problems as the claims about Google’s representations about itself. Here Google’s contention that its rankings are pure opinion protected by the First Amendment will be tested – and given that rankings of competitors seem like commercial speech, Google’s rights are probably at their lowest ebb. One possible argument: Given that Google doesn’t control search inquiries and that KinderStart pages are mixed in with lots of other non-search engine/directory pages for any given query, it’s uniquely impossible to separate out rankings of search engines from (fully-protected) rankings of noncompetitors.

The amended state-law unfair competition count starts with the alleged deceptiveness of Google’s promise that AdSense is a good way to make money, without a simultaneous disclosure that Google arbitrarily manipulates PageRank. This count also adds in the rest of the allegations of Google’s anticompetitive, arbitrary, and deceptive practices.

Up next: Google will surely renew its anti-SLAPP motion. It will be a fight worth watching. Maybe they could put oral argument up on Google Video?

Viral False Advertising

Truth or Illusion: What’s Real on YouTube?: This article about undisclosed advertising on YouTube raises several points of interest to me.

First, on Lonelygirl15, “soon viewers became suspicious. The high quality of video lighting, slick editing and lack of copyrighted music led to accusations that Lonelygirl15 was a hoaxer” (emphasis added). Keeping it real apparently now includes keeping it with a popular soundtrack, which itself is understood to be unlicensed. Will we now see licensed but low-production-value attempts to appear viral on the part of Lonelygirl15’s successors?

The article takes the position that Lonelygirl15’s creators aren’t making art, as they allege, but deceiving others for profit. “Misrepresenting commercials as independent user-generated content, actors as members of the public, and fiction as fact is not art, it's advertising. The Lonelygirl15 videos were created for the explicit purpose of promoting a product, in this case the actress Jessica Rose.”

When Marty Schwimmer pointed me at this brouhaha, my reaction was that it may well have been falsity, but consumer protection law hasn’t generally applied to pure entertainment. Since “supposedly fact, actually fiction” is a standard description of any false advertising claim, though, one can call this false advertising without too much work – though First Amendment considerations come into play. The closest thing I can think of is two lawsuits against the exaggerated claims made by the Beardstown Ladies investment advice book, which produced split results – one allowing consumer fraud claims to proceed, one barring them on First Amendment grounds. The developments here also have an intriguing symmetry with the false advertising claims against the James Frey “memoir” that turned out to be highly fictionalized. Here, however, there are no refunds available.

Although the deception here doesn’t seem to have been all that significant, the article points out that it relied on a feature of “user-generated content” that can be used more ominously: Its apparently greater credibility, because it’s not coming from an advertiser with an incentive to distort, and it’s not assessed using our standard advertising filters.

The article also warns of a new format, the “smear-video” depicting a rival brand’s product performing badly. Since a disparaged competitor would have a much easier time of making out a false advertising case than a deceived viewer, “astroturf” smear videos seem incredibly risky, especially since anonymity in posting is rarely as strong as people think it is. I’m not sure how big a worry competitor-generated disparagement is, but user-generated disparagement is surely a branding concern.

Tuesday, September 19, 2006

Let me not to the marriage of true business models admit impediments

YouTube’s deal with Warner: I’ve agreed with Fred von Lohmann that the DMCA provides substantial, probably complete, protection for YouTube against claims of copyright infringement, whether direct or contributory. But now I wonder about this deal, which allows Warner to choose to share ad revenue with YouTube when a user-posted video uses Warner music. Given that now, YouTube will make more money from a video with unlicensed, unWarner music than a video with licensed Warner music, isn’t it now directly profiting from the fact that the other music is unlicensed? A possible answer is that these aren’t the only two possibilities: Many videos may contain no infringing content at all; this deal just takes some of the videos out of the calculation. As long as YouTube isn’t making more money on videos with unlicensed music than on videos with no infringing music, it’s not excluded from the safe harbor. But not everyone will agree with this analysis.

A separate issue: apparently Warner took on the responsibility of licensing the musical work in such cases. Wow! Obviously, the deal makes no sense for YouTube if it’s only got half the necessary rights, and yet Warner has committed to a lot of work for what might be a low payoff. I’d love to see a detailed analysis of mechanical rights, sync licenses, and the other components of this deal.

And finally: The reporting notes that Warner isn't giving a blanket license. It can still do takedowns for anything it doesn't like. Put a Warner song on your amateur porn or anti-Bush (or anti-Obama) screed, and I bet you that Warner's not going to go for an ad revenue split. This is why blanket licenses and pay-per-use solutions are not enough to allow ordinary users a full ability to remix; when it comes to derivative works, copyright owners are just not able to relax.

Without Placebo I'm Nothing

Federal Trade Commission v. QT, Inc., -- F. Supp. 2d --, 2006 WL 2587914 (N.D. Ill.)

"The pain just went away."

"Within seconds the pain was gone."

"You don't have to live with pain."

These are just a few statements, from many, many similar ones, found in infomercials for the Q-Ray® Ionized Bracelet®. The infomercials were highly successful in selling the bracelent.

The FTC sued, claiming that the defendants marketed it in a deceptive and misleading manner by falsely representing that (1) the bracelet provides immediate, significant or complete pain relief and (2) scientific tests prove the pain-relief claims. In addition, the FTC alleged that (3) defendants falsely represented that QT's 30-day satisfaction guarantee permits consumers to readily obtain a full refund of the purchase price if they return the bracelet within 30 days. The court agreed with the FTC on all three points.

Since at least 1996, QT has advertised, marketed, and sold the Q-Ray bracelet via U.S. media outlets and Internet sites such as www.qray.com.

The bracelet is made of copper and zinc, though the infomercials say the bracelet isn’t copper. The defendants claimed that composition differences in the various styles are irrelevant because the effect comes from ionization, “a high-voltage process that changes metal conductivity.” Defendant’s principal Que Te Park testified that he picked the term “ionized” without having a definition for it and without intending to convey that the bracelet is electrically charged. He doesn’t know what that’s supposed to do to the bracelet. QT doesn’t test any bracelets it gets from its supplier to insure they’re ionized. Park made up the theory that the bracelet works like acupuncture or Eastern medicine. The court found his testimony contradictory and full of obfuscation. “He is a clever marketer but a poor witness.”

QT offered various studies, mostly from other countries, mostly non-blinded, using very small numbers, some as few as two or three people. The better of QT’s half-baked studies showed no effect versus placebo. QT’s market surveys showed a 50/50 split in consumer satisfaction with pain relief; 25% of people who purchased the bracelets, historically, demanded refunds. Park claimed anecdotal evidence from personally meeting 8,100 satisfied consumers (1% of all purchasers), but many of the warranty cards defendants offered as testimonials distorted incentives by telling consumers they’d get a 20% discount for their next purchase if they submitted a testimonial. (Now, presumably dissatisfied consumers wouldn’t make a next purchase, but people who’d experienced relief due to the placebo effect or natural regression to the mean might well do so.)

In sum, there was no scientific evidence that the Q-Ray bracelet receives, retains, or emits an electrical charge or has any properties different from any other bracelet made from the same metals. Nor was there a “reasonable basis” to make the advertising claims, which in the case of health claims requires at least one well-conducted, placebo-controlled, randomized, double-blind clinical trial. This was a scheme to defraud consumers out of millions of dollars by preying on their desire to find a simple solution to alleviate their physical pain. The website had the chutzpah to claim, “Once the positive benefits that you enjoy while wearing the Q-Ray Ionized Bracelet begin to fade or disappear it is time for a new Q-Ray as the ionized power in your bracelet has been exhausted, and cannot be restored.”

Notable components of the ruling: The defendants introduced an expert to defend the idea of traditional Chinese medicine, which is generally not tested using Western double-blinded, placebo-controlled clinical studies but is based on long experience. This might have been a tougher sell for the FTC had there been any evidence that the Q-Ray bracelet derived from any aspect of traditional Chinese medicine. As it was, the court simply held that traditional Chinese medicine offered no support for defendants’ claims.

Defendants also introduced an expert to testify that the placebo effect is real and offers benefits to patients when they believe a device will work. Defendants’ marketing was, he thought, likely to induce a successful placebo effect. The legal argument here was that older cases, which barred products that satisfied consumers although they lacked any physiological basis for effectiveness, have been overtaken by new scientific evidence that the placebo effect is real. The court, however, ruled that previous cases had considered the existence of the placebo effect and had held it an illegitimate means of making sales, because it requires lies to consumers.

Even if one can argue that a placebo effect means that claims of pain control are not technically false, they are “misleading” under the FTC act because the device isn’t inherently effective. It’s the marketing and not the device itself that produces results; any device so marketed would serve. This reasoning is trickier than it seems, though I think it’s the right way to go. Ordinarily, we don’t care why a product works; we don’t even understand why a product works. Mechanism of action, in other words, is not material. But in this case, if we learned why, the bracelet would stop working. The basic premise of the sale is trickery. And that, I think, matters to consumers, just as conditions of production that don’t affect physical qualities – dolphin-free tuna, Made in America, etc. – matter to consumers.

Remedies: The retail price of the Q-Ray bracelet sold by QT ranges from $49.95 to $249.95. QT's wholesale cost for the Q-Ray bracelet ranges between $7.50 and $28. Defendants thus marked up the bracelet over 650 percent in setting the retail price to consumers. Its sales during the relevant period were over $137 million, and its net profit $22.5 million. The court granted restitution and recission. Defendants had to disgorge profits plus interest. Every purchaser will be allowed a full refund, not to exceed a total of $87 million (defendants’ net sales). Thus, the amount paid will be somewhere between $22.5 million (plus interest) and $87 million.

The court also held defendant Que Te Park personally liable.

Final note: The remaining claims on the website seem to be pure mumbo-jumbo about balance, health, energy and performance. Though they’re possibly too vague to be misleading, I think that they still falsely promise a health benefit – especially when combined with the warnings in the FAQ not to let the “terminals” touch, not to use without a doctor’s permission while pregnant, etc.

Trail of ... failure to attribute

Chalfant v. Tubb, --- F.Supp.2d ----, 2006 WL 2524242 (N.D. Okla.)

Plaintiffs Chalfant and Preston alleged that defendants used a screenplay they wrote to make a film, Blood Trail. In 1995, Defendant Tubb told plaintiffs that he wanted to use the screenplay for his film, but stated that contractual details could be worked out after the film was produced. After some contentious negotiations, plaintiffs allegedly agreed that Preston would have control over film rights, but both would get screenwriting credit. Preston allowed Tubb to begin production without a written contract, but with an oral agreement that he’d execute a contract once the film was produced and had a distributor. Preston worked as an actor in the film.

In August 2004, Tubb filed for registration of the copyrights for the screenplay of Blood Trail and the film itself. Tubb listed Preston as a coauthor, but failed to mention Chalfant. The application did not note that the screenplay for Blood Trail was a derivative work of the 1995 screenplay. The registrations issued.

Tubb did not notify plaintiffs that he had received registrations, but he did begin marketing and distributing the film. The DVD is now commercially available – though the reviews indicate that, even with Profit’s Adrian Pasdar in it, it’s not worth watching.

Plaintiffs claim that the final version contains large segments of dialogue lifted directly from the original screenplay, as well as the same characters and events taken from the original work. They’ve never been paid. The DVD states that the screenplay was coauthored by Tubb and Preston. They sued for copyright infringement, various state-law torts, unfair competition (state and federal), and breach of contract.

Unsurprisingly, the copyright claims survived a motion to dismiss, even though Preston participated in the creation of the film. Plaintiffs allege that Tubb only had a limited license, and that he failed to meet the conditions of that license.

Of somewhat more interest is the post-Dastar result on the unfair competition claims. Plaintiffs alleged that defendants intentionally omitted Chalfant’s name as a coauthor of the derivative screenplay and film. They argued that Dastar didn’t preclude this claim because it left open the possibility of false advertising/attribution cases. The court disagreed, since the complaint didn’t allege any consumer harm from being misled as to the film’s authorship, only harm to Chalfant.

The interesting twist is that the court then held that plaintiffs’ state law statutory and common law unfair competition claims weren’t preempted, even though it would seem a logical application of Dastar to so hold. Under the reasoning of Dastar, conflict preemption would seem appropriate. Maybe even express preemption, since “failure to attribute” doesn’t seem like the extra element required to avoid express preemption, even if that failure allegedly produces consumer harm. The court reasoned that the state law tort requires plaintiffs to prove that defendants engaged in deception for the purposes of misleading a consumer about the identity of the producer of goods or services; simple misappropriation isn’t good enough. But that description sounds like a narrowing of the class of actionable behavior based on intent, and, as the court notes when dismissing plaintiffs’ claim for tortious interference with business expectations, copyright preemption doctrine generally holds that state claims that make a defendant liable for copying plus some level of intent are preempted. The court was unable to cite post-Dastar cases supporting its interpretation that state-law false advertising claims based solely on failure to attribute survive preemption, but then there aren’t all that many that deal with false advertising.

More solidly, the state-law claims for defrauding the plaintiffs and for breach of contract also survived.

Friday, September 15, 2006

Cory Doctorow on transformation in fiction

Henry Jenkins announces an interesting video project for helping teachers and students think about new media. Cory Doctorow is the first interview subject, and among other things discusses the value of fictional, as opposed to non-fictional, responses to fiction.
One of the nice things about writing fiction that has some didactic elements, or that has a mission and is intended to educate as well as entertain, is that it's very hard to rebut a short story. If you write an essay, someone can come along and write another essay that says your essay is rubbish. The number of people who can write a short story to rebut your short story is much smaller.
If you believe that most fiction has didactic elements, at least in the sense of having theories of how people ought to behave and feel, then this becomes a pervasive justification of transformative fictional use, a response to the question "why don't you just write a review?"

Elsewhere in the quoted bits, Doctorow discusses his own reasons for making pop-culture references in his stories. I find it particularly interesting that he speaks of putting such references in his otherwise "original" stories (original in a copyright sense, anyway) because "It lets you be a fan [without] giving up authorship." Fan fiction usually does involve surrendering some incidents of authorship, but hardly all -- attribution and the resulting respect of the fan community are the key retained rights.

Doctorow continues that pop-culture references allow him to stay "a drooling fanboy without surrendering [my] position at the top of the geek hierarchy by working in these fanboy references in [my] stuff as [I] go." And this is literally true in the sense that the geek hierarchy has published sf authors at the top, with fan fiction authors occupying the middle-to-bottom positions, depending on how well they fit normative expectations for what people (mostly women) can legitimately write about. Yet as my description indicates, I was somewhat put off by Doctorow's wording because it struck me as so specifically fanboy -- a claim to cultural capital that relies on distinguishing his activities from the things that the real weirdos do. There's always a tension in any movement for cultural acceptance between insisting on the validity of alternative values and throwing the most extreme members of the group off the sled to prove that the remaining members are just normal folks. I understand why Doctorow, and to some extent Jenkins, take the normal-folks-with-benefits approach. But my fan community just got tossed off the sled.

(As a side note, Doctorow's advice about blogging seems very good.)

Monday, September 11, 2006

Lanham Act puzzles revisited

Mark McKenna’s useful piece on trademark’s history and development argues that trademark traditionally protected property rights, not consumer confusion, as shown most plainly in the limitation of classic infringement to use on competing goods. Courts would deny relief even if confusion was likely when the plaintiff didn’t lose business. He argues, then, that complaints about present-day expansions of the law can’t refer back to a golden age in which trademark law was dedicated to consumer protection and not producer property rights. Instead of appealing to history, critics of expansion have to rely on the normative merits of limited trademark rights. In fact, he suggests, consumer protection models enabled trademark’s expansion because courts were good at finding consumer interests everywhere, even when a trademark owner wasn’t losing sales. Essentially, courts licensed trademark owners to be private attorneys general, protecting consumers wherever consumers might be in need of protection – and even where they weren’t.

On rereading McKenna’s article, I was struck by how well this older model of trademark infringement explains current Lanham Act false advertising law, specifically with respect to standing. Given that the Lanham Act uses the same language for both false advertising and trademark language, it’s a puzzle why there are special standing requirements for false advertising, and yet every circuit employs them (mostly to avoid allowing citizen suits). See Jean Wegman Burns, Confused. Jurisprudence: False Advertising Under the Lanham Act, 79 B.U. L. Rev. 807 (1999).

In false advertising, public deception doesn’t matter if the plaintiff can’t prove that it’s losing sales, which can happen, for example, in a highly competitive market that isn’t dominated by any one seller. McKenna doesn’t actually address false advertising law, but one application of his work is to suggest that the problem isn’t that false advertising standing is too limited, but that trademark standing is far too broad, in that plaintiffs don’t have to show likely loss of sales to prevail.

Thursday, September 07, 2006

Paying for parodies

We've gone beyond voluntary licensing of parodies: Some companies are now paying to be mocked, as a variant of product placement. Being parodied proves your brand is valuable.

I've written about the empirical failure of the argument that IP owners won't license parodies. This new twist takes trademark law into an even deeper conundrum. If consumers are well-educated about product placement, as evidence suggests they increasingly are (Henry Jenkins's new book Convergence Culture discusses this in the American Idol chapter, as does James Gibson's piece, coming soon to a major law review near you), then they may well assume that even the unflattering uses of a product are authorized. But turning that into an infringement case is a really, really bad idea, for the free speech/pro-competition reasons we all know.

Developments of this sort increase the pressure on courts to create rules, like the nominative fair use doctrine, that essentially declare that whatever the de facto confusion, there is no de jure confusion -- no confusion the law will intervene to stop. I borrowed the de facto/de jure terminology from functionality doctrine, but it explains some otherwise mysterious things about nominative fair use and related trademark doctrines.

The new focus on "use as a mark" as an element of infringement, paralleling the "commercial use in commerce" as an element of dilution, is a related way for courts to avoid inquiries into actual confusion. Finding that a product parodied in a TV show isn't being "used as a mark" is a much cheaper and cleaner way to allow the parody than reliance on the multifactor confusion test. The latter allows the trademark owner to introduce evidence that some consumers actually believed that Caterpillar endorsed George of the Jungle 2 or that Slip 'n Slide was associated with Dickie Roberts, Former Child Star. Essentially, we can no longer rely on consumer perceptions to define the appropriate scope of the "endorsement, association, or affiliation" branches of infringement law -- if we ever could.

Wednesday, September 06, 2006

Superheroes or super-jerks?

Virginia Postrel writes about trouble with her latest column for the Atlantic (free only for the next three days):

There's an interesting intellectual property story behind the column's art. The art director originally wanted to reproduce Savador Larroca's Storm image from the comic book pictured above. But Marvel dragged out the permission process until the day before the issue was supposed to go to the printer. As a condition of permission, the company's lawyer then insisted that the article treat the word superhero as a Marvel/DC trademark, spelling it Super Hero. Fortunately for me, The Atlantic declined and went with Superman.

As is so often the case, aggressive IP lawyers trumped smart business strategy--good fodder for a future Forbes column. Marvel is supposed to be promoting second-line characters, including Storm, and The Atlantic is clearly not trying to publish a superhero comic in competition with the trademark holders.
Postrel links to a pro-trademark-owner discussion of Marvel & DC's claim to jointly own rights in SUPERHEROES, which totally misses the basic trademark rule that no amount of secondary meaning can turn a generic term like superheroes into a trademark. As a commenter astutely points out, the fact that large numbers of people associate a generic term, whether "superhero," "soda," or "search engine," with the market leader does not mean that they perceive the term to be a mark. It just means that the market leader is top-of-mind. To find out whether consumers perceive the term as a mark, you have to go far beyond asking for associations and look at meaning.