Tuesday, December 12, 2006

Final NYU panel on dilution

Final discussion: James Whitman, Yale University: The comparativist’s perspective

Of course European law protects free expression, but it’s balanced against other constitutional values of reputation, honor, etc. It’s not the only constitutional value on the playing field. Whitman would have assumed that TM belonged to protection of personality, not property, which would make it easier to understand what’s going on here.

We talk about common versus civil law all the time but that offers very little help in dealing with the problems that arise with things like dilution. One possibly useful contrast: law oriented towards consumers versus law oriented towards producers. America had a broad consumer movement mid-20th century while Europe was consciously moving towards a producer orientation. There is of course no general or uniform consumer (or producer) interest. But producer-oriented law takes some producer interest as primary, and tends to asks questions about producer-producer conflicts, such as how to balance workers’ interests against capitalists’ interests.

An easy example of the contrast between producerist and consumerist interests is antitrust. The great shift in American antitrust law has been to focus on consumer interests – questions are resolved by asking about the economic interests of consumers, rather than of competitors. Until recently, European law was otherwise.

Ambiguity: one way of defining consumer interest is low prices and shopping convenience. But another way of defining it, often in conflict, is the consumer’s interest in being paternalistically protected.

People think that consumerism is triumphing worldwide. But in the European case, it’s not so clear that the consumer interest – understood as an economic interest – is triumphing.

It’s silly to imagine that there are two different classes; everyone is both a consumer and producer. It’s very difficult to figure out who’s winning in any given case. Rather it’s a conflict over identity politics: who ought to matter more in a modern economy.

So what’s going on in Europe (France and Germany)? These are comparative, relative claims, not absolute one: we see more consumerism in the US and more producerism in Europe. We do see a lot of talk in Europe about the consumer, but the law that’s being produced in response is overwhelmingly consumer protection law, not oriented towards consumer economic interest or shopping convenience. The law of retail, for example: Despite lots of change, there’s a lot more regulation of retail than in the US, much of which is intended, despite the entry of large retailers like Wal-Mart, to protect small shops.

This looks like classic producerist law. It’s defended on consumer protection grounds, though. The French & German statutes identify the small retailers’s interests and the consumer’s interest in being able to choose between types of goods. Consumers are also being protected against deceptive practices and against “incitement” – overly low pricing that incites people to buy inopportunely. This is key because there is extremely limited consumer credit in France. Consumer protection of this kind leaves lots of room for the old kinds of producer protections.

Can you analyze TM in these terms? He thinks so. To the extent that Europeans are more open to dilution, that’s easy to fit into the producerist/consumerist box. If you justify the law on consumer protection grounds, you’re making the European move of justifying producer protection as a benefit to consumers. Americans are generally less receptive to producerist legislation, so lingering resistance is understandable.

To the extent we’re trying to defend antidilution legislation on “status goods” grounds, it’s similar to the justification that there should be a variety of goods available, from cheap to expensive. Thus we should suppress competition even when it would lower prices. The French & German legislation is interested in artisanal goods specifically though, while status goods will not necessarily be artisanal.

He imagines that it’s awfully hard to pull off a consumerist explanation of producer protections such as Jacoby has undertaken. Understanding consumer interest as an interest in low prices makes it kind of hard to understand TM at all.

You can reconcile all this with consumer interests: It’s really all about identity politics. What is a consumer’s identity? Low prices are not the only possible objective for consumer interests.

Zimmerman: Dilution is about protection for corporate owners’ rights to locate themselves in sections of my brain and not be disturbed in their sovereignty – this just seems creepy to an American.

Whitman: We seem creepy to them too.

Carroll: TM law enables product differentiation so that products don’t become commodities. The consumer interest is then fully satisfied; why add dilution?

Whitman: Differentiations aren’t all the same. The claim is that the artisanal sector needs specific protection to avoid perishing. He has some sympathy for this. Artisanal goods are much better in Europe – you can’t get a good baguette in NYC, which tells you a lot.

Jacoby: Creepy as it may sound, the picture of an owned brain is not too far off from what MRIs now show about neural networks in the brain. We do see physical correspondence between brand recognition and neurons. (Comment: There is a big difference between ownership and occupation. Providing a legal right to prevent others from ousting the TM owner from consumers' neurons is a huge leap from identifying parts of the brain where brands are remembered and processed. I do not understand why MRIs showing that the name Coke triggers good memories provide a sounder basis for dilution law than previously existed; we already knew that trademarks were associated with brand value in the mind -- where did we think that came from if not some physical correlate in the brain? Knowing where that correlate is doesn't change any of the normative questions.)

Mühlendahl: The European justification for harmonized IP is a single-market-based approach to create equality across nations. There is no consumer protection justification; IP enhances consumer welfare in the broadest sense but isn’t directed at doing so. You do this on a property theory, as for patent and copyright, creating an ecology of competition across legal systems.

Congratulations to Rochelle Dreyfuss and NYU on an excellent conference.

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