WIPIP at BU session 4

Katya Assaf, Magical Thinking in Trademark Law

We’re supposed to be rational, but in fact Westerners are just as likely to believe in magical thinking as members of supposedly less rational cultures. Modern advertising is premised on magic: promises beauty, success, etc. from minimal action of buying, just as a magic spell promises.

Consumers usually say they don’t believe advertising claims. Theoretically, they should be especially skeptical of exaggerated claims. Yet such claims are empirically very effective. Can convince us that bitter coffee isn’t bitter, etc. They create distinctions between products that can’t in blind testing be distinguished from each other. Branding adds a powerful symbolic dimension to the product, inducing preference. This resonates with Durkheim’s idea of the sacred, just as a totemic mark distinguishes ordinary pieces of wood and stone from the totem.

The puffery defense makes hyperbole nonactionable. Courts in advertising cases treat consumers as rational and skeptical, not easily misled. Based on general legal approach regarding individuals as rational beings.

Trademark law was supposed to protect consumers from confusion, but today focuses on magical thinking: similarity and contagion. Similarity: an effect resembles its cause—something that looks like a sacred object has the same characteristics. In TM, we have a subliminal confusion doctrine that does the same thing, meaning that GUNSMOKE cigarettes are confusing with Marlboro even though there’s no explicit confusion of which consumers are aware.

What explains the consumer’s willingness to pay more for brand extension into a category where the consumer knows the TM owner has no experience? Logic of contagion: famous brands evoke strong feelings. Contagion also explains fear of dilution, despite its lack of empirical grounding (especially w/r/t famous brands which are very resistant to the posited mechanisms by which economic harm might occur). It’s about distinguishing the sacred and the profane.

Tarnishment is especially notable for its deviation from presumptions about human rationality. While the puffery cases presume people aren’t influenced by nonfactual communication, tarnishment assumes they are—it’s about disrespect for the sacred.

One can argue that brands produce real effects. Like totems, they can make the sick feel better, bringing courage and confidence. Brands may give the consumer a feeling of self-confidence and make her happier. This isn’t different from any other magical or religious belief; such beliefs fulfill basic human needs. So is the market just giving consumers what they want?

This can’t justify broad TM protection—all religious beliefs bring such benefits, but no other ones enjoy such legal protections. Legal system usually assumes position of neutrality w/r/t nonrational beliefs, ignoring tendency for people to be influenced—reluctance to enter shaky domain of unconscious wishes. Better to treat people as rational, protecting only the informational dimension of TMs, treating the consumer as a being who uses TMs to make educated purchasing decisions. Real as they may be, magical associations from brands should be left outside the legal system.

Andrea Matwyshyn: Columbia Business School research shows people projecting their own characteristics/sophistication onto brands and vice versa. Relationship between person and brand.

Silbey: what work does Durkheim do v. a theory of the subconscious that’s more individualistic?

A: Brands are not individualistic. She did use Freud as an approach to the paper, but Durkheim’s approach to religion fit very well.

My reaction: I worry about effects of this approach on advertising law: there are lots of ways people can be manipulated and even fooled and if we pretend they’re rational we’ll have a lot of inefficiency and, more to the point, a lot of harm. Maybe these irrationalities do no harm to consumers and society and thus ignoring them would be good for consumers/competition—I believe that--but the larger conclusion seems quite dangerous to me. (Cf. what I’m about to say about cigarette regulation.)

Lunney: psych/behavioral economics has a lot of ways to talk about this—salience, such that your neighbor’s experience that she got better when she took X has more effect than 5 double blinded studies showing that X doesn’t work. Cognitive dissonance: once you’ve decided that Y is true, every bit of evidence you receive is interpreted to correspond to your preexisting worldviews. Bring in parallels in modern behavioral economics. Surprised by conclusion that we should treat people as rational when we know they’re not. Real consumers behave in these ways: if there is positive contagion or negative contagion, why pretend there isn’t?

A: Compare history of blasphemy: you were allowed to preach in favor of Jesus but not against him. Legal system allows you to puff TMs but not to criticize them. This is closely matched to the crime of blasphemy.

Sheff: McKenna’s work on brand extensions complicates the contagion story—some extensions don’t work. Also thinks puffery and dilution are doing two different things; false advertising law is aimed at protecting different things.

Gordon: law as educator: magical thinking isn’t real/doesn’t work.

A: she’s neutral—these beliefs are no better than other magical beliefs; if we don’t interfere with other magical beliefs, why interfere with these ones? (Note that we do interfere with belief in the placebo effect, even per Posner.)

Rebecca Tushnet, Visuals in Trademark and Advertising Law

Images: associated with emotion as opposed to rationality so some inherent tension with the self-assigned project of the law, but less so with Lanham Act to the extent that it claims to be about how people actually think. As a result, Lanham Act isn’t as confused about images as other areas of the law, it’s just haphazard in its treatment of them.

TM: SCt says TM knows no ontology, then realizes that it violated that principle in the very decision in which it was articulated—colors are protectable but only on a showing of secondary meaning, unlike inherently distinctive words; same with product configuration. The social meaning of many nonverbal forms of communication, that is, differs enough from the social meaning of words to justify separate treatment as a matter of trademark law. This may work as a rule of thumb, but it’s important to recognize what kinds of thinking about words v. images are being reinforced.

Product design, according to the Court, often has intrinsic value to consumers apart from source-indicating value. Except that the same is true of words, which is why outside of Hot Topic we see few clothing or makeup colors described as bile yellow or vomit green. Marketers strive to give even completely invented product names a euphonious sound that resonates with the characteristics they want consumers to associate with the product. (Think Viagra.)

Trademark owners are allowed to control terms that invoke or relate to a product because the theory is that plenty of other words remain available to competitors. Words are devalued here by being treated as interchangeable: not particularly tied tightly to the things they are used to identify. And yet, outside the thesaurus, that’s not particularly likely to be true. Connotations can be as or more powerful than denotations.

Formal equivalence—blue dog to image of blue dog in infringement analysis. But then: Trade dress and mistrust of the image—courts require pleading trade dress in words, not in pictures, because different jurors might interpret pictures differently, which we all know never happens with words

Nominative fair use: similar dynamic as with Qualitex: initial articulation of the test said that you had to use as little of the mark as necessary, which included not using the font or other distinctive visual elements; then it turns out that visual aspects of the mark can be necessary for certain purposes and the court walks itself back in Mattel v. Walking Mountain—consequence of not thinking about images as marks rather than bad thinking about images. We should also recognize that the font sends a different message and may be important to other messages. Research finds that consumer perceptions of meaning are affected by typeface style.

Relatedly, compare the treatment of imitative trade dress to “compare to Brand X” messages—courts are not suspicious of the latter on trademark grounds and haven’t been since Smith v. Chanel, whereas if you use the major label trade dress, which sends exactly the same message without the words, it at least goes to a factfinder.

Advertising; people are vulnerable to a wide variety of persuasive techniques; unfortunately, courts due to their greater uncertainty about images are worse at evaluating when images are deceptive.

Images are better both because they are more persuasive than words and because the law governing advertising has not recognized this difference. As a result, images can often make visual claims that would be unsubstantiated and thus unlawful if made in words.

Some people who recognize this want to extirpate images from ads because of their appeal to the irrational or inarticulable, and ban all but informational advertising—only real present motion towards this is w/r/t cigarettes.

Under our current system, however, images are ever-present, and some of them get challenged as conveying specific, actionable false messages. In such cases, courts often proceed with complete certainty, confident that (certain) images speak clearly. In one case, S.C. Johnson & Son, Inc. v. Clorox Co., the defendant’s humorous ads showed two animated goldfish suspended in upside-down plastic storage bags, one safe and sound in its Glad-Lock bag and the other threatened by a leaky Ziploc. Plaintiff’s tests revealed that 37% of Ziploc bags tested under similar conditions didn’t leak at all, and only 10% leaked at the rate depicted in the TV commercials. The court thus found the ads false, including print ads that did not show any leakage rate because they only showed a drop of water forming from the Ziploc. Because the Ziploc bag in each ad was leaking, the court of appeals found a false representation that upside-down Ziploc bags filled with water always leak. This is a leap – the image itself, being a static image, could not make any representation about frequency of leaks, though clearly some comparative claim was being made.

Then a few years later, the same court upheld a finding that certain comparative ads for DirecTV’s HDTV service were false. Their snappy dialogue conveyed the false message that cable HDTV quality was worse. At the same time, the court held that images with an even more aggressive comparative message—showing an incredibly distorted image representing cable’s image quality—were merely puffery. The classic definition of puffery assumes a claim made in words, such as “the best ever!” Puffery is vague and exaggerated, or subjective and nonfalsifiable, and is nonactionable because no reasonable consumer would rely on it. In theory, puffery cannot distort consumer decisions as false advertising does.

The Second Circuit set aside prior definitions of puffery in order to create a new rule for images. Images, unlike words, “cannot be vague or broad,” are generally “‘specific and measurable,’ and can therefore ‘be proven either true or false.’” Under the old definitions, then, images could not be puffery—but the court was convinced that some images, including the ones before it, needed to be defined as nonactionable puffery. A visual depiction of a product can be “so grossly exaggerated that no reasonable buyer would take it at face value.” Its unreality, its defiance of ordinary rules of representation, would simply be apparent. In the case at bar, no reasonable consumer could mistake the defendant’s heavily pixilated image for a real representation about cable’s image quality. The court, relying on its own assessment of the image, reversed the district court’s grant of injunctive relief as to the ads featuring these images.

The Second Circuit’s new rule ensured differential treatment of words and images, but provided little guidance for the next set of images to come along. This uncertainty is only tolerable because of the underlying assumption that all viewers will generally interpret a picture in the same way, allowing the court to recognize the category of the meaningless image (puffery) alongside the category of the exaggerated but especially persuasive image (falsity).

Silbey: we see this kind of overconfidence about images all over the law—what to do? Bring in an expert body of knowledge for courts?

A: Two things—make our theories about images explicit, and then (to the extent possible and justified) make them consistent, instead of surprising us with outcomes.

Sheff: competition policy as a reason to do things differently with trade dress? Making the plaintiff spell out its claims serves a functionality interest by focusing on what’s claimed as protectable.

A: I agree. And we can even see Abercrombie as serving that kind of purpose with respect to word marks. I just want these differences noticed and theorized.

Matwyshyn: sharper articulation of alleged harm might help. With securities regulation, we worry about overstimulating demand—a prospectus can’t be too flashy. Maybe the harm is different in different media?

Heymann: distinguish rules that segregate elements v. interpret them: Abercrombie does segregation work in wordspace. Another example of judges being more confident: Posner on brooms—completely confident of ability to evaluate visual appearance; compare to cases in which linguists testify—you rarely get a visual design expert.

Katya Assaf: ECJ case in which Mars Ice Cream advertised 10% more, but colored the package 30% red, and ECJ overturned German ruling that this was misleading, because the package said 10%.