Monday, April 14, 2008

Iowa Trademark Scholars' Roundtable, part 2

Eric Goldman: Is TM use the right solution or just the best option on the table?

Lemley: What are the alternatives? All advantages are comparative: bring me a doctrine that works better. All existing combinations of little doctrines are insufficient, subject to manipulation in new technological environments. A keyword ad exception would be too small.

Bone: Say more about search costs—desktop clutter is also a search cost.

Lemley: Fair point. Lemley wants effective operation of a marketplace. TM’s normal way to do that is to respond to a particular information failure—but sometimes decreasing search costs isn’t worth other costs, which explains the functionality doctrine.

Bone: This move disturbs me. Saying that decreasing confusion isn’t worth it is different than saying TM doesn’t care about certain kinds of confusion. That’s an empirical debate about the costs of reducing search costs. Alternatively, we could argue that some search costs wouldn’t count.

Lemley: He advocates a rule that we don’t consider cost/benefit in each specific case.

Jessica Litman: She takes a positivist approach: the word choices in the statute were made intentionally, moving from affixation to a very similar definition of use in commerce. Barrett’s point is that Congress knew what it wanted. Litman’s view of TM use is far even from Lemley & Dogan. There’s always a potential harm: a hard-core movie where a character washes his clothes with Tide can do real damage to Tide because people could really believe it was paid product placement. That’s not actionable, not because it’s nominative fair use or free speech but because that fails to state a claim.

Dogan: How do you deal with the advertising problem (this interpretation means that use in advertising isn’t “use in commerce” with respect to marks for goods) or the waiter who substitutes Coke for Pepsi without ever saying the terms?

Litman: She accepts the physical affixation-esque requirement. If you don’t fit within §32, she’s happy to send you to §43, and if you don’t fit within §43 she’s happy to send you to Congress.

McKenna: But the definition of infringement refers to use in advertising. So it was explicitly contemplated.

Litman: That’s §43. She’s not willing to throw the whole affixation baby out. (Sometimes I really love hardcore stances like this.)

Dinwoodie: One could take the “deeming” provision of the definition of use in commerce to be nonexhaustive—such uses are deemed use in commerce but others might be too.

Lemley: Then we have to throw out all our law about rights acquisition too.

Dinwoodie: No, Congress wanted to eliminate token use.

McKenna: But then all sorts of things that we don’t (necessarily) think are source-identifying automatically count, like putting a device on a cap. The move to §43(a) doesn’t make sense to him—if the point is to identify things that are ok, how does moving to §43 help? Also, §43 still requires “use.”

My interjection: the Lanham Act only defines use in commerce with respect to what counts as use as a mark, not what counts as false advertising.

Barrett: The concept needs more work, but she thinks fraudulent marketing could be distinguished from TM infringement—the Restatement (3d) of Unfair Competition covers not just false advertising but passing off through acts other than use as a mark. That’s ok with her because it avoids propertizing words and symbols.

My comment: At least you’d get away from the multifactor confusion test, where the big 3 (strength, similarity, relation of goods) will favor the plaintiff in many cases where it shouldn’t.

Barrett: Yes, there’s even a materiality requirement.

Heymann: It’s not uncommon to exclude categories of relationships or harms as a matter of law—done with duty and proximate causation in tort (Palsgraf).

Bone: That’s a function of the underlying value: sometimes it’s nonutilitarian. Is there a nonutilitarian value in TM?

Goldman: The statute doesn’t work, fundamentally, for how we think about TM. We aren’t going to reach consensus on statutory interpretation. If we as scholars can’t agree on principles, it’s hopeless.

Dinwoodie: Congress delegated a lot to the courts. What do we do when Congress also used very specific words to inform the common-law development of doctrine? On dilution, the Supreme Court looked very closely at the statutory language; likewise, the original Lanham Act was focused on registration and Congress’s language is very important for registration. Outside that realm, Dinwoodie is more comfortable playing with the language and allocating discretion to courts.

Lemley: All sorts of judicially created doctrines have no explicit statutory basis, even in copyright. If you read the Lanham Act language as covering the waterfront on use in commerce, that leaves little room for maneuver. If Dinwoodie is right that the language is only for rights acquisition and not infringement, though, you could say (1) there’s no TM use requirement or (2) courts are free to create a common law TM use requirement.

Barrett: Congress codified what it understood to be the common law, with exceptions like incontestability, and expected courts to continue to develop the common law.

Austin: He is pessimistic about consensus about what counts as an externality/what should be done. There are two different conceptions of the role of the state: (1) paternalistic, using TM to protect consumers; (2) requiring calibrated and robust reasons for regulation, with the default being no regulation. (Comment: note however that property concepts can be used to flip (2), since property protection is usually seen as a neutral background rule rather than state intervention.)

Dinwoodie: Consumer search costs aren’t the only thing TM is for.

Lemley: He finds it ironic that the claim “search costs theory is insufficiently rich to bring in culture, free speech, etc.” is being used to create a world free of those things because we allow TM to expand with no barrier. (My thought: Lemley doesn’t want to say, at least not here, that search costs does account for these things, but First Amendment absolutists would say that marketplace of ideas concepts can encompass these all. The Gay Olympics case comes to mind.)

Dinwoodie: There are other ways to limit TM! Multiple values exist and need to be engaged.

Bone: But really, these uses we’re talking about increase search costs—but who cares? They don’t increase search costs in the ways TM cares about.

McKenna: The argument is that individual assessments of search costs are outweighed by dynamic effects on institutions—e.g., search engines.

Dogan: Search costs minimization is the justification for TM rights, but the good is improving information in the market to increase competitiveness. Search costs aren’t the end result. Goldman points out that intermediaries have incentives to collate information well and TM may interfere with that process.

Bone: Free speech doesn’t always improve information for consumers. There’s a balance between confusion and harms to First Amendment values. We don’t think consumers will adapt to the law in every case and we don’t think “Barbie Girl” improves consumer information. The hard cases are where there is some confusion and increase in search costs.

Lemley: We accept a First Amendment set of rules/values which limit TM in cases even of TM use: Haute Diggity Dog involved a TM use, but other doctrines are relevant. Within the domain of uses that aren’t branding/advertising uses, should we have a rule or a standard?

McKenna: Part of what leads to “confusion uber alles” is the search costs story. That view makes it too easy to tell stories about how any use causes increased search costs.

Barrett: How about an objective multifactor test?

McKenna: Objective multifactor? (Said in tone indicating that the phrase is a contradiction in terms.)

Barrett: Offers factors for assessing TM use: (1) Can the consumer perceive the defendant’s use of the mark? (2) Does the defendant closely associate the mark with goods or services it’s offering for sale or distribution? (3) Is the use likely to make a separate commercial impression on consumers? (4) Is the defendant’s use in noncommercial speech? (5) Is there some other important non-TM purpose for the defendant’s use? (6) Does the defendant’s use further a business that’s overall pro-competitive, or a service that gives useful information to consumers? (7) If it’s new technology, is there any useful analogy to more familiar practices?

Dogan: What do you get out of the rest of it if (1) and (2) are answered yes?

Barrett: (1) is dispositive, (2) is a minimum threshold.

McKenna: If you say that bringing Pepsi in response to a request for Coke is use under this, I don’t see how Google gets out.

Dogan: She’s troubled by the lack of constraint imposed by a multifactor test, as Beebe has documented.

Christine Bohannon: In copyright you can always claim a lost licensing fee to fight fair use—there’s a similar circularity. We need some baseline. Looking at weak cases is a good start. Barrett’s factors seem like reasonable questions for assessing likely confusion.

Lemley: What worries him about a multifactor test is rules v. standards, and the in terrorem effect of threats to sue; he wants a rule. That said, how do we define branding use? Need not set out with specificity in the statute; could give examples of branding and nonbranding, then figure out how to distinguish at the margin. (Trade dress, presumably, would be some tertium quid.) It’s wrong to require absolute precision from TM use when the alternative is the horribly flawed “confusion.”

Bone: Courts will develop the idea of branding and develop fact-sensitive factors because that’s what courts do unless you make clear they can’t. Forget about the Pepsi/Coke passing off example; don’t try to make TM use do too much.

Lemley: But passing off is in the Lanham Act without an intent requirement, so all cases will get shuffled there if you funnel non-affixation uses into passing off. You can make the same claims under §43(a)—an implied representation of endorsement. (Comment: that would happen unless courts adopt Dastar-esque preemption and say “what you really have here is a failed TM claim precluded by the TM use doctrine, so you can’t bring a passing off claim.”) Even polestar cases of non-use would now need this filter if courts adopt Barrett’s test, and that scares him.

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