Friday, November 30, 2007

Against attribution rights

I had the privilege earlier this week of visiting DePaul as a Hosier Distinguished Scholar. I gave a talk about attribution rights, the subject of a forthcoming piece in the Utah Law Review – I had intended to write a proposal to grant some sort of attribution right, but the more I wrote, the less well it worked, so I ended up writing an argument against legal enforcement of attribution norms.

Here are some notes from my talk:

I frame the question as one of when law should intervene to enforce valid social and moral norms. This makes me think about the heartbalm torts, including alienation of affection, breach of promise to marry, and criminal conversation. These were largely eliminated in the first half of the 20th century as legislatures and courts decided that human relationships were too complicated to reduce to write and wrong, and that the torts were being abused by the undeserving – gold-diggers, in that case. These two arguments are in some tension, but together proved persuasive in the decline of the hearbalm torts. I make pretty much the same two arguments against moral rights, and you could fairly question me on that.

The heartbalm torts offer a story of the de-legalization of morality. Another possible analogy might be employment at will, where we have moved from near-complete legal freedom to much less freedom; this can be described as the legalization of morality. Moral rights might be like that – proponents argue that attribution rights should be added to what authors can get through contract.

I identify three sets of arguments for attribution rights. First, there are arguments from authorial high-protectionists. The object of concern: authors. Potential bad actors: owners to whom copyright has been transferred and follow-on authors who may distort/violate a text. Goal: protect the author’s special relationship to the text.

Second, copyright low-protectionists. The objects of concern: audiences and works, not authors. We want to feed authors the minimum possible to encourage them to run in their cages, generating new works. Potential bad actors: copyright owners, who may suppress access and/or extract monopoly rents. Goal: Access. Copyright low-protectionism helps authors insofar as they seek dissemination of their works and credit for them, not control. Low-protectionism also sometimes encompasses compulsory licensing, providing compensation but not control.

Third, trademark-style consumer protectionists. The object of concern: consumers, not in their special role as audiences, but simply as market participants. Potential bad actors: Deceptive marketers, whether initial authors, copyright owners, or non-owner publishers, who may induce consumers to spend time or money inconsistent with their actual preferences. Goal: Enabling rational, undeceived choice.

Can an attribution right be defended on these grounds? I conclude that the second, copyright low-protectionism, is empty – it endorses attribution as a substitute for things it doesn’t like nearly as much, especially control. Copyright low-protectionists are author’s rights advocates, but (once a minimum of copyright protection exists sufficient to incentivize creation) only when authors’ rights don’t interfere with access.

For the others, attribution rights founder in two places: First, the separation of ownership and authorship in the American system. Because copyright is transferrable, and because so many significant works are works for hire, attribution would either create huge practical problems – the same problems that pop up in every joint authorship case – or would have to be limited to a subset of works that are more likely to have single identifiable authors. The practical problems of attribution in multiple-creator works exist even in highly developed and concentrated fields like Hollywood moviemaking, in which 1/3 of films go to arbitration about proper screenwriting credit and everyone involved ends up feeling cheated. Legal rights would just increase the number of battlefields; if experts can’t make the system work predictably after decades, juries and judges are unlikely to do better (and it’s no surprise that a case-by-case system is unpredictable, just like substantial similarity determinations). Among the quirks of creative production is that people routinely disagree about how much they contributed to a work or a project; ask any group, and you’ll get estimates of contribution that add to well over 100%.

The limiting-works solution, by contrast, is bad because it would further entrench the devaluation of joint work and creative production in fields like moviemaking. That’s a theoretical objection, but I think it’s one that ought to resonate with authors’ rights advocates, and of course consumer protectionists are generally thinking about deception in precisely the types of mass-market works that are often works for hire, like (Stephen King’s) Lawnmower Man, so a work-limited right isn’t all that helpful.

Second, any attribution right that doesn’t allow suppression of a work is going to be ineffective a lot of the time. You can’t make people notice attribution (at least not without destroying a bunch of aesthetic value) and you can’t make them care. This is an obvious problem for consumer protectionists, and also I think a serious problem for authors’ rights advocates. If there is an important connection between author and text that ought to be preserved, ineffective attribution doesn’t further the artist’s right, which is one that goes to interpretation by the audience.

For more, please read the paper!

Thursday, November 29, 2007

Chiasmus of the day

Gregory P. Magarian, Market Triumphalism, Electoral Pathologies, and the Abiding Wisdom of First Amendment Access Rights, 35 Hofstra L. Rev. 1373, 1391 (2007) (footnotes omitted):

Because conservative libertarians ascribe absolute legitimacy to market distributions, the mere possibility that an access rights regime might have disadvantages or might fail to achieve its aims suffices to condemn it. Conversely, conservative libertarians dismiss concerns about nongovernmental suppression of expression by invoking a rigid public-private distinction, which denies corporations and other private entities any legally cognizable capacity to undermine expressive freedom. Any attempt to ameliorate privately driven constraints on expression runs aground on the twinned convictions that government can only harm expressive freedom and that only government can harm expressive freedom.

"Vista capable": capable of confusion?

Apparently even one of Microsoft's marketers had some trouble explaining what "Vista capable" meant in the context of logos applied to computers that could only run Vista Basic, not the advanced features on which Microsoft's ads focused. Story here.

Wednesday, November 28, 2007

Fashion photos: despite brawl, copyright belongs to photographer

Tang v. Putruss, --- F. Supp. 2d ----, 2007 WL 2909459 (E.D. Mich.)

Plaintiff Tang is a photographer. Defendant Putruss is the principal of Maria’s Collection, which sells designer clothing, and defendant Pageantry publishes a trade magazine. Tang and Putruss arranged a photo shoot in August 2005. According to Tang, each photo used would credit Tang, and partial payment was made in advance. When the images were delivered and the balance paid, Tang was going to issue a license. Putruss gave Tang a $2000 deposit, leaving a $2000 balance.

At the photo shoot, more images and dresses were used than the parties anticipated. According to Tang, their agreement provided for extra fees for extra hours and dresses, such that his remaining fee was $5050, not $2000. A few days later, Tang sent two “associates” to pick up the balance and hand over the images, but Putruss refused to pay and forcibly took the DVDs on which the images were stored. Putruss was charged with assault and battery against one of Tang’s associates, and pled no contest.

Tang alleged infringement of his public display right. He also alleged that he told Pageantry that his images were unlicensed, but Pageantry still reproduced one in its Winter 2005 issue.

Among other things, the court ruled on questions of joint authorship and the number of works infringed for purposes of calculating statutory damages.

Putruss was involved with the photo shoot, selecting the models, the gowns, and the accessories for each. He also requested certain poses and made suggestions. Regardless of the extent of his contributions, however, Tang argued that they didn’t intend to be joint authors, and that his contributions were not independently copyrightable. The district court determined that it would apply the requirement that a person contribute independently copyrightable material in order to be considered a joint author, but in the end that wasn’t important, because the court found insufficient evidence of intent to jointly author the photos.

The court reviewed prior cases involving photographs. In SHL Imaging, Inc. v. Artisan House, Inc., 117 F. Supp. 2d 301 (S.D.N.Y. 2000), the court found that the defendant frame manufacturer was not a joint author of photos taken by a photographer hired to take photos of framed mirrors. There, the photographer selected all the equipment, arranged the lighting, and chose the framing. The manufacturer’s selection of subject matter and right to control the photos were insufficient, especially in the absence of other evidence such as joint credit or copyright notices on the work. In Brod v. General Publishing Group, Inc., 32 Fed. Appx. 231 (9th Cir. 2001), by contrast, the court found joint authorship, where the defendant asked the plaintiff to take photos of vintage TVs for a planned book. Along with coming up with the idea, the defendant arranged the composition, directed the plaintiff to change camera angles, and enhanced the images; he even looked at an initial Polaroid test photo of each image and made suggestions before the plaintiff took the final version. This was sufficient artistic control to be a co-author. Moreover, the plaintiff “deferred” to the defendant and listed the completion date in the copyright registration as the date the book was completed, providing objective evidence of an intent to co-author.

The court found Putruss’s level of artistic control closer to that in SHL Imaging than Brod. Though Putruss offered suggestions that Tang accepted, he didn’t exercise “a high degree of control.” He was responsible for the subject matter of the photos, not the taking of the photos themselves. The court specifically noted that Tang supplied the photographic equipment – a use of professional status to indicate authorship – and arranged the lighting.

Moreover, Putruss lacked objective indicia of an intent to be joint authors. The parties’ contract was silent on authorship, but made clear that the images would be delivered when payment was received. Tang’s ability to withhold the images indicated that there was no intent to be joint authors. Tang’s other actions shortly after the shoot – registering the copyright in his name, telling third parties not to run the photos -- are consistent with sole authorship.

However, Putruss had an implied license to use the images on the first CD, the one Tang voluntarily delivered to him with the intention that Putruss could copy and distribute them. Tang’s remedy for Putruss’s failure to pay for those is a breach of contract claim.

The court ruled, based on the existence of a single registration and the “independent economic life” doctrine, there was only one “work” for damages purposes. Photos of models wearing Putruss’s line of dresses have no independent economic value, even if each photo has artistic merit. They were taken at a single session, by a single photographer, for a single purpose. So Tang is only entitled to one award of statutory damages for the photos as a whole. Thus, the implied license finding above amounts to a finding that Putruss had a license to sample a particular portion of the work, but not to use other portions.

Harder, better, faster, cover.

I was listening to 30 Seconds to Mars cover Kanye West’s Stronger, and it occurred to me that covering songs that, in the original, contain samples is not an easy matter. Stronger samples Daft Punk under license. 30 Seconds to Mars does not sample Kanye or Daft Punk, just sings both parts, so it has no problems with the sound recording copyright. In addition, the musical work Stronger is subject to a compulsory license. But the musical work excerpt from Daft Punk wouldn’t be – unless there’s some theory that the voluntarily licensed incorporation of the Daft Punk musical work into Stronger allows compulsory licensing of the entire new work.

I wonder what the contract says about Daft Punk’s participation in royalties from the musical work; if Daft Punk gets a share, isn’t that an argument that it shouldn’t also be entitled to demand a voluntary license from anyone who covers the song? If Daft Punk does have separate rights against a cover artist, then there’s a way around the musical work compulsory license: make sure your musical work has a voluntarily licensed portion from another song, and then no cover can proceed without another voluntary license. (That presumes, of course, that eliminating the licensed portion would fundamentally change the musical work. If it wouldn’t, the cover can proceed, sans sample.)

This isn’t just limited to sampling, of course. Anyone who covers My Sweet Lord is also, according to precedent, copying He’s So Fine, but not in a way subject to the compulsory license. Bridgeport Music, I believe, has already noticed this issue. Indie rockers ironically covering hip-hop, take note.

Monday, November 26, 2007

There's just no way to make "chicken by-products" sound appealing

Which is why pet food makers who use them don't like to mention them, I presume.

Hill's Pet Nutrition, Inc. v. Nutro Products, Inc., 2007 WL 4105571 (C.D. Cal.)

Hill’s, maker of the very Science Diet I feed my cat, sued competing pet food producer Nutro for, among other things, false advertising. A couple of points: a statement on Nutro’s “Health Lesson” ad display that its Complete Care “offers the optimum combination of premium ingredients” was nonactionable puffery. Hill’s also challenged various statements allegedly implying that Complete Care doesn’t contain animal byproducts, but did not show admissible evidence of consumer deception. Likewise, as to Nutro’s MAX Cat product, the court granted summary judgment on the claim that Nutro’s ad display falsely implied that chicken by-products are unhealthy for lack of evidence of deception, but, based on a consumer survey, allowed Hill’s to proceed against the alleged implication that MAX Cat doesn’t contain animal by-products.

The court also denied summary judgment regarding the statement that MAX Cat’s chicken meal is made only from those parts “you’d feed your own family,” based on an industry organization’s pet food labeling guide, which states that such claims are “false and misleading unless the entire product, itself, meets the USDA and FDA standards for feeds edible by humans.” Industry consensus is rarely used to show falsity, much less misleadingness, but it can happen.

Hill’s also claimed that Nutro infringed Hill’s “Nature’s Best” mark by using “Nature’s Very Best Ingredients” on its displays and “The Best of Nature” on its packaging. The court granted summary judgment in favor of Nutro based on the weakness of the “Nature’s Best” mark. The court referred to the absence of evidence of actual confusion and “obvious dissimilarity” in sight, sound, and meaning, but neither of those would have been all that helpful if not for the high descriptiveness of the mark. The court also noted differences in the parties’ house marks, and pointed out that Nutro’s slogan is actually “The Best of Nature. The Best of Science. The Best of Health.” Taken as a whole, it wasn’t likely to confuse.

Tuesday, November 20, 2007

Deceptive advertising case leads to aggressive advertising

Anti-lawyer advertising, that is, when a dispute over Hogan & Hartson's work on a Colorado state deceptive advertising claim against one of its clients led to a lawsuit and some bitter anti-Hogan newspaper ads.

Nip/Sucker: Reality TV as advertising

On the heels of a recent decision immunizing a radio station from liability for the professionals highlighted/advertised by its programs, the LAT runs a story on the promotional effects of reality TV for doctor-stars, and the skewed perceptions of those doctors' expertise and the risks of plastic surgery produced thereby:
Even as shows such as "Doctor 90210," "Extreme Makeover" and "The Swan" have thrust telegenic doctors into the limelight, it remains unclear what standards networks use in selecting the physicians -- or how closely they check credentials.

.... Meanwhile, their rank-and-file colleagues and the American Medical Assn. are growing worried that reality-TV doctors and the producers of the shows distort what plastic surgeons do by over-hyping the results and downplaying the pain, complications and risks associated with surgery. The shows and their celebrity doctors, they contend, mislead consumers into thinking cosmetic surgery is not much more complicated than buying a new dress.

"TV is looking for the best doctors who will show well and get ratings. They have to have looks and personality," said Dr. Valerie J. Ablaza, a board-certified plastic surgeon in Montclair, N.J. "But there are no criteria for evaluating their medical credentials. That's a big problem."

.... In the first study documenting the influence of shows such as "Extreme Makeover," researchers found that reality TV shows directly influence first-time patients who decide to have cosmetic plastic surgery. The study was published in the July issue of the journal Plastic and Reconstructive Surgery.

"These folks were really avid watchers and believed what they saw on TV was a reflection of reality," said Dr. Richard A. D'Amico, president of the American Society of Plastic Surgeons and chief of the department of plastic surgery at Englewood Hospital and Medical Center in Englewood, N.J.

In the less enthralling real world, however, results are not always predictable. A 2004 study published in Plastic and Reconstructive Surgery of procedures performed in office-based surgical facilities found that serious complications occurred in one in 298 cases and deaths in one in 51,459 cases.

.... Adds D'Amico about celebrity TV doctors in general: "TV doctors, to me, are the most dangerous, because they may or may not have the true credentials or the expertise. . . . But the public perceives they have credibility because they are on TV."

Monday, November 19, 2007

Mixed ruling for chiropractors against insurers

Encompass Insurance Co. v. Giampa, --- F.Supp.2d ----, 2007 WL 3359703 (D. Mass.)

Plaintiff sued five people (one named Edward Kennedy, but not the Senator of that name) and two businesses that provide chiropractic services, alleging fraud in obtaining insurance benefits for services that were excessive, unnecessary, or never even provided. Defendants counterclaimed based on the lawsuit and an accompanying press release, alleging defamation and libel; intentional interference with advantageous business relations; unfair and deceptive acts or practices under Massachusett’s Chapter 93A; and false advertising in violation of the Lanham Act.

The court dismissed all the counterclaims except the defamation/libel and Chapter 93A claims based on statements in the press release that could fairly be read to characterize the defendants as criminals.

In 2005, based on an extensive investigation, Encompass sued defendants for fraud, RICO violations, etc. Defendants contend that Encompass lacked a good faith basis for its claims. Two days after filing suit, Encompass issued a press release, “Boston Area Chiropractors Named in Million-Dollar Fraud Case.” Among other things, an Allstate VP (Allstate operates Encompass) stated, “these judgments against criminals range from individuals to sophisticated organized crime syndicates,” and the press release continued: “In addition to financial victories, Allstate and Encompass SIU work closely with local, state, and federal authorities for criminal investigation and prosecution--resulting in arrests around the country, taking criminals off the street.” The press release was disseminated in the trade and by various media outlets.

Encompass argued that it was entitled to the absolute litigation privilege. Though this privilege covers statements made in connection with filing and prosecuting a lawsuit, it doesn’t absolutely cover press releases like this one. Unreasonable and unnecessary statements outside the lawsuit can negate the privilege. Here, plaintiff not only repeated the complaint’s allegations, but added “statements about its investigation, the costs of insurance fraud to consumers and the insurance industry, and Encompass' commitment to fighting fraud and prosecuting criminals.” In fact, statements to newspapers and in press conferences are generally excluded from the absolute privilege, since protection for such statements is not necessary to further the policy of encouraging full investigation of claims and communication of those claims to the court and other parties.

The Lanham Act claims, however, faced an obvious standing barrier. Whatever the test applied, defendants couldn’t show any competitive injury.

To state a claim for defamation, plaintiff must allege both falsity and negligence. The court found these elements sufficiently pleaded at this stage of the litigation, but only “to the extent that the statements describing insurance fraud as a crime, discussing Allstate's financial victories against criminals and describing Encompass' efforts to take criminals off the street could reasonably be interpreted as falsely accusing the defendants of criminal behavior.” Those statements on their face don’t concern the defendants, but in the context of the whole press release, they could reasonably be seen to falsely impute criminal behavior to defendants. There’s nothing in the record suggesting criminal charges have been or could be brought, so defendants satisfied their pleading burden.

Statements of the amount in controversy and the length of the pre-suit investigation, however, were true and thus not actionable, even though defendants alleged that Encompass “grossly exaggerated” the nature of the case and the amount in controversy. Even if the complaint had no basis, Encompass actually did ask for $1.8 million in damages, so calling the lawsuit an "$1.8 million case" is an “unrefutable statement of fact.”

Fault was adequately alleged, because state of mind can be averred generally. Encompass retains other defenses, like the fact/opinion distinction, but those have to be argued on summary judgment.

Defendants also asserted claims for intentional interference with business relations between themselves and their patients, prospective patients, and other insurance companies. These were dismissed because defendants failed to allege intentional interference, even though plaintiff’s knowledge of those relationships can be inferred from the pleadings. Though the counterclaims allege “wrongful” interference, and even intent to damage their reputations, there are no allegations that Encompass intended to interfere with business relationships.

Defendants’ counterclaims for violations of Chapter 93A (barring unfair or deceptive acts or practices) survived to the extent that they were predicated on the allegedly defamatory statements in the press release, but not to the extent they were based on the lawsuit. Though filing a frivolous lawsuit can violate Chapter 93A, defendants failed to allege any specific facts supporting the claim of frivolity or ulterior motive.

Sunday, November 18, 2007

Radio nowhere: no duty to investigate program sponsors

Park v. Korea Radio USA, Inc., 2007 WL 3358139 (Cal. App. 2 Dist.)

Plaintiffs gave money to two investment companies but the companies diverted the funds for their own use. Plaintiffs here sued the two radio stations on which the companies had investment programs, alleging negligent endorsement and promotion of the companies as qualified and trustworthy.

Specificially, plaintiffs alleged that the defendants gave the companies “free radio time during prime commuting hours” to advertise themselves. During the programs, company “hosts” gave financial advice, answered listener questions, and solicited new business. The stations produced content for the companies’ programs, including by providing employees to play the roles of ordinary consumers and provide voice commentary during the programs. When listeners called the stations, defendants referred them to the investment companies. The complaint alleged that the radio stations promoted and endorsed the companies “as licensed experts in the fields of financial planning and investment advice” and that the radio stations knew or should have known that listeners would rely on this endorsement, given that the stations were dominant media with extraordinary influence in the Korean community and understood the expectations of that community.

Thus, the stations allegedly breached their duty to exercise due care “by failing to investigate whether the hosts were licensed, by failing to determine if the hosts were investing plaintiffs' funds as represented, and by failing to warn listeners that defendants took no responsibility for the hosts' actions.” Also, the stations negligently made express and implied misrepresentations about the investment companies’ qualifications and experience.

The court determined that there could be no negligence because the defendants owed no duties to the plaintiffs. A publisher is not liable for simply failing to investigate an advertiser’s product or claim, nor for failing to warn of potentially false advertising. There were no formal endorsements of the investment companies, nor explicit representations that the stations had researched the companies and had faith in them. (I’m not sure this gets at participation in creating program content, but perhaps station employees only did “and now a word from our sponsor”-type statements.) “Because defendants never undertook the task of vetting or recommending the hosts, no duty to plaintiffs arose.”

Moreover, “merely printing an advertisement in a magazine does not constitute an endorsement of the product because there is neither a representation about the product nor a specific effort to promote it. By the same reasoning, the mere fact that defendants engaged the hosts to broadcast financial shows did not equate with an endorsement of their services or a warranty of their integrity.” In fact, the court continued, “no reasonable listener would infer an endorsement simply because a radio station broadcasts a program.” If only courts in right of publicity/trademark cases would be so careful about finding implied endorsements!

Even prominence in a niche market such as the Korean community cannot substitute for an explicit endorsement. (This does raise questions about cultures in which explicit statements are disfavored, but messages nonetheless readily understood. I am reminded of work on patent inventorship disputes that involve claimants other than native-born Americans who argue that cultural norms prevented them from making explicit inventorship claims.)

The court emphasized that this wasn’t a case about money lost because of reliance on bad investment advice or other broadcast contents. Instead, this is about the “patina of legitimacy” conferred on the investment companies by the radio stations. But there’s no duty for the broadcaster to monitor its hosts’ actions to ensure they invested the money as advertised.

More trademark than trademark

The NYT Magazine’s Consumed has a story about Last Exit to Nowhere, a British purveyor of T-shirts advertising fictional brands from (largely American) films, including Blade Runner, with the Tyrell company's slogan More Human Than Human. (Battlestar Galactica interpretation here.) The T-shirts would cost an American about $45 with shipping, though if you’re willing to draw from the smaller screen, you can get shirts on the same theme much cheaper from Television Without Pity (blogged about here). The Consumed story makes the point that the recognizable fictional brands mock branding while also engaging in it at the level of reference to the original movie, and not all the TWoP shirts make that double move, but I still like them a lot.

A “PK Tech” shirt would win my undying gratitude, personally.

Friday, November 16, 2007

The cost of gas is the price of standing

Anderson v. Riverside Chrysler Jeep, 2007 WL 3317819 (Cal.App. 4 Dist.)

Anderson sued Riverside under California’s Consumer Legal Remedies Act and Unfair Competition Law. She alleged that she saw an ad in the paper for a specific car and called the dealership, where an employee told her the car was for sale. She drove to the dealership and, though the vehicle was in the service department, she took it for a test drive and indicated she would return to buy it. When she did, she negotiated a final price, though the salesperson told her that the car wasn’t for sale because it hadn’t been through a safety inspection. Four days later, she called the dealership and was told the car had been sold, but the same car was later advertised for sale.

The basic defense here was that Anderson hadn’t suffered injury in fact or lost money or property, required under the UCL (and similar defenses for the CLRA). Injury needs to be concrete, not conjectural, and specific, rather than some harm suffered by the public at large. Anderson alleges that she lost money from losing leisure time and mileage and costs associated with driving to the dealership twice. Leisure time is insufficient, because it’s not money or property. But the loss of the cost of gas and accompanying wear and tear on her old car was a “concrete and actual monetary loss.” In a nod to the price of gas, the court pointed out that other losses held sufficient to confer standing were less than the value of a tank.

However, the CLRA claim failed because Anderson failed to plead facts necessary to show any violation of the code sections that she cited.

An extended dissent challenged the idea that gas and wear & tear could support a claim of injury in fact. Anderson chose to drive to the dealership without any guarantee that she’d buy a car. “When a consumer enters a store in response to an advertisement, irrespective of whether the advertisement is misleading, there is no guarantee that the advertised product will be purchased. The fact that Anderson left defendant's dealership empty handed is not a sufficient reason to translate the costs incurred while responding to an advertisement into actionable injuries.”

The dissent argued that other cases finding standing involved benefits to the defendants, as well as injuries to the plaintiffs, as when a charge for gas was paid directly to the defendant. I’m not sure why standing should be “measured by defendant’s gain and not simply by Anderson’s loss” – it’s certainly a rule for deciding what claims are valid, but that seems to go to whether defendant was unjustly enriched, not whether plaintiff suffered harm, which I thought was the definition of injury. The dissent also argued that, because damages aren’t recoverable under the UCL, they shouldn’t suffice to show injury either – something capable of restitution should be involved. (The majority rejected this argument on the ground that the remedies available in the UCL are in the disjunctive; plaintiffs can seek injunctive relief without seeking restitution). More persuasive, perhaps, is the dissent’s fear that any negligible loss – cellphone minutes used to ask about an advertised product, or shoe tread ground down while walking to a store – will now confer standing, undercutting Proposition 64’s purpose.

Thursday, November 15, 2007

Comcast sued for blocking Bittorrent

Story here; California putative class action complaint here, alleging false advertising ("Download at Crazy Fast Speeds") and unfair business practices.

Lululemon: a lulu of a story

The Trademark Blog noted this fascinating NYT story:

Lululemon, which has received positive media coverage for its fabrics, … says the VitaSea clothing, made from seaweed fiber supplied by a company called SeaCell, reduces stress and provides anti-inflammatory, antibacterial, hydrating and detoxifying benefits.

There is one problem with its VitaSea claims, however. Some of them may not be true.

The New York Times commissioned a laboratory test of a Lululemon shirt made of VitaSea, and reviewed a similar test performed at another lab, and both came to the same conclusion: there was no significant difference in mineral levels between the VitaSea fabric and cotton T-shirts.

In other words, the labs found no evidence of seaweed in the Lululemon clothing…..

When told about the findings, Lululemon’s founder said he could not dispute them.

“If you actually put it on and wear it, it is different from cotton,” said Dennis Wilson, Lululemon’s founder, chief product designer and board chairman. “That’s my only test of it,” said Mr. Wilson, known as Chip.

The shirt tested by The Times was labeled as being made of 70 percent cotton, 6 percent spandex and 24 percent of the seaweed fiber.

The Times commissioned its test after an investor who is shorting Lululemon’s stock — betting that its price will fall — provided Chemir’s test results to The Times. ….

The tests raise obvious questions about Lululemon’s marketing. Consumers generally pay more for high-tech sportswear, and companies like Lululemon are trying to capitalize on interest in organic materials.

…. Lululemon executives said that they had not independently tested the VitaSea material to see whether it lived up to the claims on Lululemon’s tags. Instead, it trusted the claims of its suppliers, executives said.

…. Analysts said it is the responsibility of the companies to test all of their products.

“It’s frankly up to the companies to do sporadic product quality tests to make sure everything is being manufactured to the parameters they set,” said Sharon Zackfia, an analyst who covers Lululemon at William Blair & Co., an investment firm based in Chicago. “At the end of the day, it’s Lululemon’s name on the line.”

…. SeaCell is owned by a German company called Smartfiber. Smartfiber provides scientific documents on its Web site about the effects of the SeaCell fibers, but it also says on its site that SeaCell assumes no liability for that information’s accuracy.

…. One customer outside a Lululemon store in Chicago said he would not stop buying VitaSea clothing, even if tests disproved Lululemon’s claims.

“I couldn’t care less, because it is so comfortable,” said David Wilkinson, 49.

So much here! First, perhaps someone should have asked a lawyer, not an analyst: If the paper’s report is correct, then by making material, explicitly false (seaweed content) and admittedly unsubstantiated (health) claims Lululemon is violating the law, and pretty much anyone – the FTC, the state AG, a competitor, or a customer – could come after them for it. In the US, too, Smartfiber’s disclaimer might not help it much. One could argue that it sells its products to sophisticated businesses, not end customers, but clearly the customers aren’t all that sophisticated about seaweed, as opposed to standard clothing components like cut or color – their particular expertise can help them neither with evaluating evidence about seaweed’s health effects nor in testing for the presence of seaweed. I wouldn’t let Smartfiber off the hook if its claims are, in fact, false – but since the relevant laws are strict liability, I have no particular sympathy for Lululemon either.

Second, the use of the media by the short-seller is of interest. I had not thought of short-sellers as consumer protection advocates, but I guess they are when it helps them, just as they question companies’ representations to the stock market. And in fairness to Lululemon, I should point out that most of the clothes listed on its site aren’t VitaSea; there is no indication in the report that its other clothes are not what they say.

Third, the statement from the satisfied customer demonstrates that false advertising can change preferences and that counterspeech does not restore the system. As I discuss in my forthcoming article on dilution, people hate to feel like dupes; once we’ve made a purchase, we often convince ourselves that we had really good reasons to do so, and even corrective information just gets us to elaborate an explanation of why we were still right. I’ve got nothing against the satisfied customer; it’s just that he could still have been satisfied if Lululemon hadn’t made false claims, polluting the information environment and making it harder to trust everyone in the world of new, green-type claims.

Wednesday, November 14, 2007

Summer funding for law students

Google Policy Fellowship, funding ten weeks of work on undergraduate, graduate, and law students interested in Internet and technology policy at places in San Francisco and Washington, DC, including the American Library Association, Cato Institute, Center for Democracy and Technology, Competitive Enterprise Institute, Electronic Frontier Foundation, Internet Education Foundation, Media Access Project, New America Foundation, and Public Knowledge.

Haute Diggity affirmed

Louis Vuitton Malletier v. Haute Diggity Dog (4th Cir. 2007)

District court ruling discussed here; pictures of Chewy Vuiton dog toys here. The Court of Appeals affirmed the grant of summary judgment in favor of HDD on LV’s copyright, trademark infringement, and trademark dilution claims.

Trademark infringement was easy. As the court said, “[t]he dog toy irreverently presents haute couture as an object for casual canine destruction. The satire is unmistakable.” The court emphasized that, in parody cases, the valence of several key confusion factors is reversed – mark strength decreases the likelihood of confusion by making deviation in the form of parody easier to recognize. (I think this is true of many non-parodic deviations as well – but I don’t expect courts to agree any time soon.)

Of some interest is the fact that many orders for HDD’s products misspelled “Chewy Vuiton” as “Chewy Vuitton,” making it closer to LV’s mark. But those invoices, which often contained orders for other HDD parody products, made clear that the buyers understood the source; they were confused about the name of HDD’s product, not about source.

Dilution: LV argued that parodies necessarily cause blurring, and that HDD’s products would cause tarnishment because they pose a choking hazard to some dogs. According to the Fourth Circuit, dilution requires (1) a famous mark, (2) defendant’s use in commerce of a diluting mark, (3) similarity between the famous mark and the defendant’s mark that gives rise to an association between the marks, and (4) that the association is likely to impair the distinctiveness of the famous mark or likely to harm the reputation of the famous mark. Crucially, the court thought the first three elements were clearly satisfied here. The parody “gives rise to an association” between the marks.

Rather than applying the statutory factors from the TDRA, the district court simply held that parodies don’t dilute because they depend on retaining a continuing association with the original. (The court of appeals politely said that the district court didn’t “directly apply” the statutory factors.) On appeal, LV argued that any use of an imitation of its mark would cause dilution as a matter of law, because LV’s use has to date been exclusive. The court of appeals perceived this as overreaching. Distinctiveness, it explained, “refers to the public’s recognition that the famous mark identifies a single source of the product using the famous mark” (emphasis added). Dilution, in this understanding, is simply about the information conveyed by the mark, not any emotional associations – it is about the mark, not the brand.

Conducting its own independent analysis of the six-factor TDRA test, the panel concluded that the district court had the right answer. Parody is not a complete defense when the defendant uses the parody as its own designation of source, as here. The parody exclusion only applies to non-source-identifying uses. But the TDRA doesn’t require courts to ignore the significance of parody even when the challenged use is a trademark use.

Thus, the court used the same ju-jitsu on the dilution factors as applied to parody as it did with confusion. “Indeed, by making the famous mark an object of the parody, a successful parody might actually enhance the famous mark’s distinctiveness by making it an icon.” Because mark strength favors the defendant in such an analysis, and because only strong, famous marks get protection in the first place, parodies start out ahead in the multifactor analysis. So also with the other factors: Intent to parody is not the same thing as dilutive intent; associations created by parody are not necessarily likely to decrease distinctiveness.

One way to read this is that a successful parody is a complete defense to dilution, even when used as a mark; the court’s analysis is not specific to anything about dog toys or high fashion. One phrase holds out the prospect that a properly conducted survey might help: “the facts impose on LVM an increased burden to demonstrate that the distinctiveness of its famous marks is likely to be impaired by a successful parody” (emphasis added). But what a survey might ask about is hard to figure out, since association alone – the usual focus of inquiry – is insufficient, at least in a parody case.

The court also limits its holding another way, perhaps attempting to avoid the conclusion that all successful parodies are nondiluting: “It is important to note, however, that this might not be true if the parody is so similar to the famous mark that it likely could be construed as actual use of the famous mark itself.” Use of LV’s “actual marks” as a defendant’s own marks could dilute, even as parody. (What that would look like is unclear to me.) Here, HDD’s dog toys “imitate and suggest, but [do] not use, the marks of a high-fashion LOUIS VUITTON handbag.” The “imperfect[ion]” of the use prevented any diminution in the link between the pristine LV mark and LV products.

Note: The Ninth Circuit takes a looser stance towards the amount of similarity required for dilution (at least until Judge Kozinski gets his pen on the TDRA), though it hasn’t yet considered a parody case.

Note the second: As with many recent trademark cases, “use” is a key term, but -- perhaps because it is so important -- it goes undefined. “Use” here seems to mean an actual replication, rather than a distinguishable facsimile.

The court also rejected the tarnishment claim because there was simply no evidence of a choking hazard. (Also, if the parody is recognized as a parody, even a product that reflected badly on the parodist should not harm the trademark owner’s reputation.)

On the copyright claim, the court observed briefly that LV was attempting to shoehorn copyright into what was really a trademark case. Applying copyright fair use to these facts was “awkward,” but, without further explanation, the court concluded that there was no copyright infringement.

Tuesday, November 13, 2007

breaking news: Fourth Circuit affirms in Haute Diggity Dog

Opinion here -- the dilution claim loses on grounds different from those on which the district court relied. More soon.

Google knows, but it doesn't understand

A Google sponsored link that appeared in Gmail for the target "false advertising": [xxx].us/advertising/false+advertising/advertising+agency.html

My guess is that the listed ad agencies are not well served by this particular page, though it’s clearly not worth it to screen out humorous results like this. I wonder if/when it will be.

Beyond mashups as parody

New York magazine runs a Q&A with Luminosity, a fan video creator. Included with the story are two of her vids, one with video from 300 set to Madonna’s “Vogue” – hysterical, yet also a pointed critique – and one, Women’s Work, with video from TV’s Supernatural set to Hole’s “Violet” – a disturbing look at the way popular culture uses violence against women to titillate and to provide reasons for men to undertake the hero’s journey. These are excellent examples of how editing and selection generate new and even critical expression. 300/Vogue also makes the magazine's best of Web video humor list. Micole offers further context and many more excellent vid recommendations here.

Both she and Luminosity make a point of interest to copyright theorists: Women’s Work uses Supernatural not to critique Supernatural as such, but the entire narrative apparatus that produces Supernatural and a zillion narratives like it. Here’s Micole: “‘Women’s Work’ is a doctoral thesis in the misogyny of basic, unexamined story structures--structures which are more obvious because they are more literal in horror, but which are present in every genre and every variation of style, from pop culture to high art. The vid explicitly and viscerally demonstrates how SO MANY of the stories we know and tell and re-tell depend on the suffering of women ….” Here’s Luminosity: “We wanted to point out that in order for us to love a TV show—and we do—we have to set this horrible part of it aside. A lot. Often. Sisabet [the co-vidder of the project] and I believe that we could have made this vid using almost any show, from Heroes to CSI, but we are fans of Supernatural.”

I am struck by how much these statements resemble claims made by Jeff Koons that he is entitled to appropriate any particular pop cultural object, regardless of its fame or obscurity, because each object participates in the overall economy he is critiquing. See Blanch v. Koons. 467 F.3d 244 (2d Cir. 2006). I’ve disapproved of the gendered implications of the various Koons cases, but here I think Koons is right. Why pick on Supernatural? Well, it’s certainly implicated in the misogyny the vid exposes. Courts shouldn’t be in the business of deciding whether there’s a better target out there. In other words: No copyright owner can defend itself against criticism by pointing out how many other works a fair user has not appropriated. (Cf. Rogers v. Koons, 960 F.2d 301, 308 (2d Cir. 1992) (“no copier may defend the act of plagiarism by pointing out how much of the copy he has not pirated”).

Monday, November 12, 2007

Suppressing information to protect consumers

That's what bans on false advertising are -- it's just that when you use the term "information," as opposed to "falsehoods" or "lies," it sounds bad! And putting it that way suggests that there is a premium on getting the truth/falsity determination right, and perhaps a reason to err on the side of regulatory caution. (I'm not so sure about erring on the side of caution, for a lot of reasons, but we shouldn't be complacent about regulatory competence.)

The NYT has a story on the Pennsylvania Department of Agriculture's impending ban on labeling milk and dairy products to say they come from cows that haven’t been treated with artificial bovine growth hormone. The theory is that the "no rBGH" label scares and confuses consumers about the safety and healthfulness of unlabeled milk. The NYT is skeptical, as am I, that there are a lot of unjustifiably terrified consumers out there (here's another critic of attempts to ban voluntary labeling) -- but, if one accepts that milk from treated cows is indistinguishable in its effects on the human body from milk from untreated cows, I do think matters get complicated. There are lots of other good reasons to reject rBGH-treated milk, but immediate health/safety consequences are not part of those reasons.

So, it's possible to argue that labels induce consumers to spend more than they'd prefer because they mistakenly believe that buying "hormone-free" milk is better for their children. Here's that argument, though I can't help wondering what hand Monsanto had in convincing the speaker of this.

In my forthcoming article about dividing true from false in the context of commercial speech doctrine, I make the following argument:
Consumers with concerns over the increased industrialization of the food supply, the vulnerability of monocultures, and the environmental effects of GMO foods, among other things, might benefit from “non-GMO” labels even if GMO foods are just as safe for human consumption as non-GMO foods. But it is important to acknowledge that even if this criticism is correct, labeling could mislead consumers, albeit differently. Establishing that some consumers wish to avoid GMO foods on non-safety grounds does nothing to refute either of the FDA’s major premises: GMO foods are safe, and labeling will mislead some significant number of consumers about safety.
For good articles on this general subject, see Douglas Kysar's Preferences for Processes and Dan Burk's The Milk Free Zone: Federal and Local Interests in Regulating Recombinant bST, 22 Columbia J. Env. L. 227 (1997).

The reason that there is no neutral regulatory position is that even voluntary labeling has preference-shaping effects. As the NYT story points out: "Using [Pa. secretary of agriculture] Wolff’s reasoning, you could argue that organic labels on milk are unfair because they suggest that non-organic food is inferior. The same goes for labels for “natural,” “from grass-fed cows” and “locally produced.”

Michigan Telecom & Tech Law Review Blog

A new addition to the blogroll.

Friday, November 09, 2007

Sampling and clearance culture

Fluxblog on Cam'ron's new mixtape:
At first it's like "wait, why is he wasting so many of these fantastic songs on a semi-official release?" but then it becomes clear that like a lot of the best mixtapes of the past few years, this relaxed, confident music is the direct result of the freedom that comes when you don't have to cater to the mass market or worry about the high cost of securing hot producers or clearing top-drawer samples.

Thursday, November 08, 2007

Prince and the new power lawsuit

Update: The Guardian runs a Prince fashion retrospective with the caption:

Hey, Prince fans...

Enjoy looking at your favourite singer's colourful costumes, but don't want to get sued? Don't fret: Guardian Unlimited Music has put together a gallery of some of his best outfits for you to peruse without having to worry about a lawsuit.
Which goes to my earlier question about how many photos of Prince are actually under his copyright control, and also quite nicely demonstrates that (a) ad-supported websites can often use a celebrity image to profit and (b) this plays as anti-fan and counterproductive.

Battle of the Pitbulls ends in damages

Slip-N-Slide Records, Inc. v. TVT Records, LLC, 2007 WL 3232274 (S.D. Fla.) (magistrate judge)

Earlier proceedings reported here. SNS sued TVT for interfering with its sale of Welcome to the 305, an album containing early recordings by rap artist Armando Perez, aka Pitbull. TVT counterclaimed for trademark infringement and false advertising under the Lanham Act.

The jury rejected TVT’s false advertising and trademark infringement counterclaims. The evidence supported the conclusion that TVT lacked rights in the stylized version of Pitbull’s mark. Pitbull’s lawyer and other witnesses testified that, in the music industry, artists and not record companies control their performing names. Also, TVT had no evidence of consumer confusion.

SNS prevailed, winning an award of compensatory damages of almost $2.3 million and punitive damages of over $6.8 million. Specifically, the jury found tortious interference with SNS’s relationship with ADA, the intended distributor of the album. The elements are that the defendant (1) knew (2) of an existing business relationship, (3) with which it intentionally and unjustifiably interfered, (4) causing damage.

TVT’s main argument was that it didn’t act with malice or through improper methods when its executive VP sent C&Ds to ADA and its retailers, threatening litigation against them if they distributed 305. Rather, it had a reasonable belief that SNS was interfering with its exclusive contract with Pitbull. TVT’s president testified that TVT investigated SNS’s plans and concluded that SNS had no right to release at least 6 of the 16 tracks and that Pitbull said in a private meeting that he didn’t want 305 released.

But the jury rejected that evidence, and the court thought the jurors were “quite justified.” Pitbull’s lawyer and manager testified that Pitbull never opposed the release of 305, and there was evidence that TVT acquired its rights from a third party that had only present and future rights to Pitbull recordings, not rights in any earlier recordings. Moreover, before sending the C&Ds, TVT had a copy of the contract that granted SNS rights to Pitbull’s recordings, and TVT was told by Pitbull’s lawyer and other witnesses that SNS had a right to release the album. Further, the jury heard evidence that sending C&D letters to the distribution chain was not the industry norm. And Pitbull was not pleased with his label; he hired a trademark lawyer to send a C&D to TVT, telling the company that he owned all trademark rights to his name and that TVT shouldn’t claim any such rights.

TVT had a qualified privilege to interfere with SNS’s relationship with ADA to safeguard its own interests, if it didn’t employ improper methods. An improper method could include misrepresentations or unfounded threats. The jury heard evidence sufficient to find improper methods. The “most compelling” fact was TVT’s recklessness – it would have been fine to send a C&D to SNS and SNS’s representatives, but sending nearly a hundred C&Ds through the distribution chain was unprivileged. TVT knew how to litigate – it had done so in the past, and was known in the industry for its litigiousness – and should have sued SNS. (That well-known litigiousness, as testified to by witnesses, also helped SNS prove causation – the C&Ds destroyed SNS’s ability to sell the album by making almost everyone unwilling to carry it, even though some accounts had placed more than 100,000 preorders.)

The court upheld $2,227,200 in compensatory damages. Though anticipated profits are often too speculative, plaintiffs may receive them by showing them with a reasonable degree of certainty, which requires some standard or “yardstick.” Once a plaintiff has shown the fact of damage, there is more flexibility in showing amount. Here, the fact of damage was well-established. SNS was an experienced marketer with a record of hits, and had paid only a small sum to acquire the Pitbull recordings. There was simply no evidence that it would have lost money on the album; the only question was how much money it would have made. SNS’s expert witness compared 305 to Pitbull’s debut album, which had appeared less than a year before, and to successful SNS albums in the same genre. This provided a sufficient yardstick (and the jury’s award reflects a discount from the expert’s “worst case scenario,” suggesting that it accepted some of TVT’s criticisms of his methodology).

The court further agreed that SNS was entitled to punitive damages. The jury heard evidence that TVT knew what would happen when it sent 90 C&Ds out. In fact, at the same time, it was suing a larger record company for tortious interference. TVT’s disregard for the opinions of Pitbull’s lawyer and others, assertion of rights based on unsigned contracts, and threats made knowing its own reputation for litigiousness supported the jury’s conclusion that TVT acted willfully and egregiously.

This must have been some trial: the court noted that TVT’s principal witness, Steve Gottlieb, “testified in a manner that, ironically, recreated for the jury the way in which he may have conducted himself prior to the cease and desist letters being distributed. His testimony personified the very type of ‘intentional’ and ‘wanton’ and ‘reckless’ conduct that the jury was asked to find from the evidence. It came as no surprise to the Court, after Mr. Gottlieb testified, that the jury was prepared to find that his and his company's actions warranted punitive damages.” Trying to turn this lemon into lemonade, TVT argued gamely that the award was based on dislike of Gottlieb and thus based on passion. The court concluded that dislike wasn’t the problem; the jury rejected Gottlieb’s incredible testimony, which gave it plenty of reason to disbelieve his claims of good faith.

The punitive damages award of $6.8 million did not, however, survive unscathed. Since the harm here was merely economic, and since the compensatory damages were already so large, the court remitted the punitive damages, on state law (not constitutional) grounds. Compared to other damage awards for tortious interference, this was a very high amount. The economic damages were already high, and TVT is a small enough company that the award would be a big hit; Florida law discourages punitive awards that result in “economic castigation” (this is a quote from an earlier case, but I can’t help thinking that “castigation” is just not the right word). Despite its rejection of the jury’s award, the court stressed its “respect for and deference” to the jury’s decision; it was a reasoned decision and a multi-million dollar punitive award was justified. But “by its very nature a jury sees only the trees. The jury would, indeed, violate the Court’s instructions if it did otherwise. The Court, however, pursuant to Florida law, is required to see the trees as well as the forest.”

I’m not an expert on damages, but that is insane troll logic – not the court’s fault, but the background precedents. Why make the jury go through a useless tree-counting exercise if, in the end, all it can really decide is whether punitive damages are available and not what their amount should be? Relatedly, the court pointed to precedent that big economic damages disfavor big punitive damages – but of course the Supreme Court has announced that large “multipliers” are also disfavored if economic damages are small. Florida has a three-to-one ratio cap on punitives; combined with the rule requiring comparison with other awards, this means that the average punitive award will systematically be driven down (as this one was despite being only three times the compensatory award), though one assumes that inflation can be taken into account.

SNS ends up with a punitive award matching the compensatory one: $2.3 million, or, if it “chooses,” a new trial. (Again, insane troll logic: the Seventh Amendment bars the judge substituting for the jury on a fact issue without SNS’s consent. Except that no matter what a jury finds here, SNS can’t get more than $2.3 million because the judge is required to override the jury on the punitives issue. Why not just admit that we are not applying the Seventh Amendment to punitive damages awards?) But fortunately, the modified 1:1 ratio is not unconstitutional under the due process clause, so TVT’s objections there are unfounded!

General comment: The federal courts, by design, have been getting more hostile to lawsuits against businesses. This disproportionately affects consumers, but it also affects business plaintiffs. Hostility to punitive damages is only one part of this overall shift towards the law of the jungle. The strong do as they will; the weak do as they must; the lawyers collect the fees.

Wednesday, November 07, 2007

Authorship, authenticity, advertising

Societe Civile Succession Richard Guino v. Beseder Inc., 2007 WL 3238703 (D. Ariz.)

Let me explain – no, it is too complicated. Let me sum up: Pierre-Auguste Renoir and Richard Guino created sculptures between 1913 and 1917. At that time, Renoir took full credit. In 1974, Guino got some credit. French litigation between the Renoir and Guino heirs resulted in a settlement, but disputes over ownership and authenticity continue, as recounted here by the Telegraph (containing the interesting tidbit that the estates share an economic interest in having the authorship legally recognized as joint, since Guino’s successful suit extended the copyright by 74 years because Guino outlived Renoir by so many years; this may explain some of the friendliness between most of the heirs). Plaintiff, a French trust, now exercises Guino’s rights.

A “black sheep” Renoir, Jean-Emmanuel, authorized defendants (Rima Fine Art) to make reproductions of the sculptures and license them for a wide array of goods, targeting the “Neanderthal” art appreciator population. (Read the Telegraph story for many such gems, including the estimate that this market was worth $1 billion. I guess the GEICO Caveman needs to decorate.) The trust sued for copyright infringement, and in earlier litigation defeated defendants’ argument that the sculptures are in the public domain in the US, a decision discussed by William Patry. After a jury trial, the trust received damages from the Rima defendants of $50,000 for ten works, and $75,000 from the defendant Renoir for the same works. The jury also found in favor of defendants’ Lanham Act counterclaim. (Somewhat unhappy comment from juror here.)

The Telegraph story explains the false advertising aspects of the case, though doesn’t say that it was actually the same court and parties as the copyright case:

An Arizona court recently ordered the Société to pay $135,000 damages to Jean-Emmanuel for 'false advertising' of a 2005 exhibition of Renoir-Guino sculptures, alleged to have damaged his business as a California-based art dealer. The exhibition was held by Victor Ostrovsky, who owns a gallery in Scottsdale located opposite Rima. Although the sculptures, owned by Michel Guino, were presented as a valuable edition created for a 1974 Paris exhibition, the court heard evidence that suggests they were cast years later.

The findings came to light after an investigation by Emmanuel Javogue [an independent dealer], who was acting as the Société's agent in the US and had funded the Guinos' US lawsuit. After seeing the exhibition Javogue became perturbed. 'I had doubts about certain works. There were terracotta pieces although there is no record of terracotta sculptures made in Renoir's time. I also wondered why, instead of showing the legitimate edition the Guino estate was permitted to make with the Susse Foundry after 1982, they had sent over an earlier edition from another foundry.'

That $135,000 is because the jury awarded $90,000 in compensatory damages and $30,000 in lost profits, which the judge increased to $45,000. The court also entered an injunction requiring the trust to identify the works of art at issue “as unauthentic and/or unauthorized duplicates of the original Renoir-Guino works.” Ouch!

This seems like a good application of the Dastar remnant cause of action for false advertising about authenticity – claims that works were actually sculpted by a famous artist are clearly material, even in an age of mechanical reproduction. The trust argued it should have received judgment as a matter of law for failure to prove (1) competition between the trust and defendant Renoir and (2) actual harm.

The court found that the jury had before it sufficient evidence to support the verdict. Defendant Renoir is actively involved in the “art industry” as a dealer, buyer, seller, and broker. So is the trust, and indeed the trust was involved in planning the Ostrovsky exhibition. The trust also argued that there was no evidence it was involved in any advertisement, but the evidence about involvement with the Ostrovsky exhibition was sufficient – an ad for the exhibition identified the trust as a sponsor.

However, the court found insufficient evidence of damages. The false statements at issue were non-comparative, so some actual injury needed to be shown even though the statements were literally false. Though damage to reputation or goodwill is compensable, defendant Renoir didn’t show evidence of damage, only conclusory testimony that his reputation had been harmed; he stated that, as far as he knew, he hadn’t lost any clients as a result of the false advertising. Thus, it set aside the compensatory damage award, but not the lost profits award, putting the trust in the black by $80,000.

The trust moved for attorneys’ fees and costs of over $365,000. The court denied the motion without prejudice, among other reasons because the copyright issues are unsettled. Though the Ninth Circuit declined to take an interlocutory appeal, it will have to address the issues soon.

Meanwhile, defendants moved for sanctions. This litigation has been hard-fought (the trust also sued a local charity for including the sculptures in a charity event, though the charity was ultimately found not contributorily liable), and both sides alleged line-crossing. Basically, defense counsel, along with a translator, videographer, and stenographer, went to Paris to depose two Guinos. The night before the depositions, the trust’s French counsel sent a letter objecting on the basis of noncompliance with the Hague Convention, and no deposition took place. The court determined that it didn’t need to decide the Hague Convention issue, given (1) the eleventh-hour objection, and (2) that the trust filed suit in Arizona and then refused to make its directors or representatives available for deposition in the US, but did propose the dates for the failed Paris depositions. Thus, the court awarded 85% of defendants’ costs for the failed depositions, divided between counsel and the trust.

And then the Rima defendants moved for attorneys’ fees under the Lanham Act – not for the successful counterclaim, but for defending against the trust’s Lanham Act claim. (Oh, I didn’t mention that? There was also a failed Lanham Act claim.) The court may award fees to the prevailing party in a Lanham Act case under “exceptional circumstances,” which in the Ninth Circuit means the case was “groundless, unreasonable, vexatious, or pursued in bad faith.” The court had dismissed the Lanham Act claim at trial based on the absence of evidence presented.

The court agreed that this was an exceptional case. At trial, the trust focused on copyright damages. Its assertion of Lanham Act claims, however, caused the Rima defendants to spend unnecessary time and resources to prepare a defense. The claim should not have been brought, or should have been voluntarily dismissed. (In an interesting trademark-copyright overlap, the court apparently considered it relevant that the Rima defendants spoke to the Copyright Office before purchasing certain copies of the works at issue and believed that their acts were lawful.) For the same reasons, defendant Renoir and his mother were entitled to fees for the Lanham Act defense.

Defendant Renoir’s mother, Hernandez, was also entitled to fees as a prevailing party on the copyright claims. The trust presented no evidence against her, and the court thought that she’d been named to increase the trust’s leverage against defendant Renoir. Leaving her in until the court granted her a directed verdict was unjustified and supported a fee award under Fantasy v. Fogerty.

Finally, defendant Renoir was also awarded fees for his false advertising counterclaim. The jury specially found that the trust’s false advertising was willfully deceptive. False representations of authenticity and alterations of certain works are bad even if defendant Renoir couldn’t show he was personally injured by those acts.

Overall: the trust won a substantial victory – injunctive relief on the copyright claims is an important remedy here -- but the cost was quite high. And the final outcome is still in doubt, since the Ninth Circuit has yet to consider whether the sculptures were in fact in the public domain in the US.

There's enough here for a dissertation about the relationship between copyright, authorship, and authenticity; I'm particularly intrigued by the possibility that Guino was not an author by the standards of 1917, but had become so by the 1970s, and contrariwise that the sculptures in the Ostrovsky show might have been authentic by earlier standards, but not by present ones.

Tuesday, November 06, 2007

Suing your fans: not just for conglomerates anymore

Prince is threatening to do it now, with some very expansive copyright and trademark claims. (Does he even own the copyright in the photos of him? Unless he set the timer and then jogged into place, this depends on various contractual arrangements.)

I wonder to what extent his experience in Pickett v. Prince, in which he was sued for making a guitar in the shape of his invented symbol after Pickett had already made a similar guitar, affects his attitudes towards fansites.

Google Books blogs

By way of Dan Cohen's Digitial Humanities blog, two posts on Google -- the first has the pull quote of the season: "being in bed with Google is way better than sleeping alone." The second is on Google and its inconsistent embrace of openness. Incidentally, I want my portable ID now, please. And more than that, I want yours. Reestablishing all my existing links on Facebook is so difficult that I am instead lazily waiting for people to come to me.

Monday, November 05, 2007

Moral challenges of user-generated content

(One of which is whether it's a good idea to call it that!) I just listened to Henry Jenkins on Participatory Culture, Lead Use(r)s, and Moral Economy: How Convergence Culture is Changing the Relations Between Producers and Consumers, an hour-long podcast with much of interest in it, including discussion of FanLib's attempt to monetize and corporatize fan fiction. Nobody seems very sure about how relations between producers, owners and "consumers" (or at least, noncommercial producers) will look in the next generation; Jenkins canvasses the issues, including the need for a labor theory of content production.

Didn't lose weight, but did lose a lawsuit

Franulovic v. The Coca-Cola Co., 2007 WL 3166953 (D.N.J.)

Defendants make Enviga, a “carbonated beverage with a proprietary blend of caffeine and epigalocatechin gallate (EGCG), an antioxidant that occurs in green tea.”

Plaintiff Melfi filed a putative class action alleging breach of express warranty, breach of implied warranty of fitness for a particular purpose, and violation of the New Jersey Consumer Fraud Act. The express warranty claim was that defendants warranted that Enviga “causes a consumer to burn more calories than consumed, thus resulting in a net caloric expenditure,” causing consumers to buy the drink for $1.29-1.49 per can, but this warranty was unsubstantiated, uncorroborated, and simply untrue. The implied warranty claim was that Enviga’s ad campaign impliedly warranted that Enviga was useful for the purposes of weight loss and weight control, though it was not.

The NJCFA claim was similar, attacking defendants’ absence of substantiation, use of phrases such as “the calorie burner” in ads, and broad advertising of Enviga despite knowledge that the minimal study evidence showed a benefit only for a discrete and minor segment of the population. Further, defendants failed to disclose the material fact that one would have to drink over three cans daily in order to achieve even a minimal and unpredictable effect; it would take weeks and at least 100 cans (about $150) to lose one pound – if you were lucky.

Plaintiff Franulovic made similar claims. She started drinking Enviga after reading the label’s representations about calorie burning. Her putative class action alleged violation of the NJCFA and the New Jersey Food & Drug Laws.

The court first rejected defendants’ argument that an implied warranty claim requires a direct communication between a buyer and a seller. The law only requires that the seller has reason to know the purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment. Melfi pleaded sufficient facts to show that defendants knew the particular purpose for which the goods were intended, given their extensive advertising of Enviga’s weight-loss benefits.

However, the implied warranty claim was nonetheless dismissed because she didn’t allege that she had a “particular purpose” that differed from Enviga’s original purpose. Without a difference between the ordinary and the particular, there can be no breach of implied warranty of fitness for a particular purpose.

On the NJCFA claim, Melfi faltered by failing to allege an ascertainable loss. She alleged that she purchased Enviga, but not how much she paid, how much she consumed, what ads she relied on, what her expectations were, or how Enviga failed to live up to them. General allegations of falsehood that would deceive a reasonable consumer are insufficient to plead a particularized ascertainable loss. Given that she actually received a beverage for her money, she needed to explain how it caused her specifically a loss. The court denied her leave to amend the complaint.

Franulovic’s complaint faltered for basically the same reasons. She satisfied the relevant pleading requirements by identifying the label as the source of the false representations; she didn’t need to allege exact store locations or dates of purchase to put Coke on notice of the misconduct of which she complained. Moreover, she specifically alleged that after she read the can, she increased her consumption to three cans a day on the understanding that doing so would help her lose weight.

Nonetheless, she failed to plead an ascertainable loss. She didn’t allege that she failed to burn more calories or to lose weight, and thus it’s not clear what cognizable harm she suffered. The court therefore didn’t need to deal with her argument that violation of the New Jersey Food & Drug laws provided her with a separate claim (privately enforceable by way of the NJCFA, which makes violations of other consumer protection statutes actionable even if those statutes create no private right of action of their own force).

Sunday, November 04, 2007

Recent press: Hearsay culture

I participated in a podcast for David Levine's Hearsay Culture, available here, along with shows featuring James Grimmelmann, Daniel Solove, and Dean Jon Garon. We talked about fan culture and copyright, as well as the relationship between trademark and the First Amendment.

Broadcast your school

iTunes U is a fascinating endeavor. The search/indexing is still pretty bad, but by poking around I found a bunch of videos from the Intellectual Property Scholars Conference at DePaul from this past August, which I had been sad to miss and look forward to watching. There’s also an Intro to Copyright Law from MIT, as well as various audio and/or video materials from Stanford Law, Duke Law, Vanderbilt Law, and Yale Law – and probably others as well; see above about the search/indexing limitations.

Saturday, November 03, 2007

Authorization and integrity

Postmortem moral rights have always puzzled me, more so than moral rights exercised by an author. Copyright owners are often willing to do things with their property that seem to others (fans) appalling betrayals of the originals -- the many incarnations of Batman offer my favorite example. Today, the NYT carries Stephen Carter's review of an authorized sequel to Gone with the Wind. Carter suggests that the revisions worked by the sequel retroactively weaken the original's Rhett Butler. Of course, I don't think this is a problem that should be solved by giving anyone rights against disruptive retellings, but even if we did want to address the problem, it wouldn't be sufficient to ban unauthorized sequels -- the authorized ones would have to be vetted too.

Monkey business on a sunny afternoon

A musicologist has a fascinating critique of OHIM’s refusal of a registration to the Tarzan “yell” on the ground that it could not be graphically represented according to CTM requirements:

First, there are plenty of pieces of music that are as hard to notate or more; can it possibly be that the EU is so ethnocentric that they believe that only things that can be easily notated with one, culturally-specific system can be [trademarked]???

Second, I really think this “not notatable” think is hugely trumped up (and I’m suspicious of the musicological expert witness they got). I think, having taught notation and transcription a few years ago, that certain aspects of most music can be notated with the Western system, and often the rejection of that system of notation plays on exoticist tropes (so note the huge number of ways that people have come up with to transcribe various Sub-Saharan African musics). ...

Third, the reporter, working with a composition prof., described the call as basically variable. While I think that seems intuitively true, every version they played was remarkably similar, not only in contour, but in tonal content–and was essentially the same as I remember us mimicking it as kids. ...

In the interest of putting my money where my mouth is, I’ve made an attempt at notating it:….

The other argument that apparently the court made, was that this call wasn’t “composed in the traditional way.” (That is, in the Beethovinian model–the way they hypothesized, which amounts to one guy saying, “sing something like this” and another guy doing that, seems pretty “traditional” to me, whatever that might mean). This seems like it would hold more legal water; this is, for the record, one of my pet problems with American copyright law, and is the sort of thing that makes it hard to copyright improvised work, such as jazz solos. ...

The post commented on this PRI story (wma), which begins with the all-too-common confusion between copyright and trademark, also reflected in the musicologist’s post. The OHIM Board of Appeal decision affirming the refusal of the registration is here. I note that the “composed in the traditional way” argument doesn’t seem to be in the OHIM opinion; the argument over composition method is about copyright, not trademark.

I am terrible with music, but I find the arguments quite interesting, and also it’s a bit ironic if a registration for the “Tarzan yell” is refused because of ethnocentric concepts of music notation.

So, if the yell is protectable, does the Listerine commercial infringe? What about the classic Baltimora song? (Because a song can't be a trademark for itself, and because of concerns for artistic freedom, the song should be in the clear; but it might not be licenseable for use in an ad without the Tarzan estate's consent.)