Saturday, June 04, 2011

Houston IPIL: Ann Bartow, Greg Lastowka

Ann Bartow, Counterfeits, Copying and Class

Wal-Mart: is very cheap, and lots of people have to shop there. The selections can look good, though, and one reason is that Wal-Mart has a thriving knockoff business: people without the privilege to pay more can still dress nicely.

Who is going to jail for counterfeiting, often a lot more time than it would be for physical violence? People without better employment options; not keeping much of the money. As a community, we rushed to the defense of filesharers: we need to rethink whether people should be going to jail for counterfeiting. Not a fan of counterfeiting, but she wants to do an explicit class analysis: who hurts?

Trade dress protection in product design should simply be eliminated. Bright line test is optimistic, because there are always questions of linedrawing, but it is so easy to get secondary meaning if you have an ad budget that there is no meaningful limit on what can get protected.

Style diffusion is important; post-sale confusion is a terrible idea. Abercrombie & Fitch v. American Eagle—turns out people were buying the clothes because of the way the clothes looked, not because of the A&F TM. When they could get the clothes cheaper at American Eagle, they went there. This is not a TM problem. TM is used to enforce social shaming: “I don’t shop at Wal-Mart” as a way to oppress other kids.

Deborah Gerhardt: Three stripes on Adidas would not be protected, but not the Nike swoosh?

Bartow: the stripes are decorative—Payless didn’t copy three stripes, it did copy two and four and obtained rights over stripes in general. I’m willing to give Adidas three stripes, but not two/four/stripes in general. You could do an amoeba or a different swoosh.

Heymann: class-based aspects versus breadth of TM—would encourage focus on class-based aspects. Ask also who the buyers are of these products. Especially if the Payless product doesn’t look exactly like the Adidas product, the purchasers may differ. People in a different socioeconomic class may know where to get their knockoffs of Coach purses.

McKenna: idea of raising the bar for secondary meaning: you have to show secondary meaning for each claimed feature; your ads don’t focus on this aspect and so you don’t show secondary meaning. Can also tighten the infringement standard to near identicality—maybe you’re arguing that you want an infringement standard that looks more like a design patent standard. Courts used to be comfortable saying that labeling was the way to avoid counterfeiting. Nike might say the swoosh is the label; may struggle to distinguish design from label since Vuitton bag is covered with the logo.

Me: Lawrence Liang on copyright would be a useful reference here. Susan Scafidi’s work on the claims by designers: the shopgirl shouldn’t be able to wear what the socialite should. Jeremy Sheff and Veblen brands: a breadth question about the goals of TM—what is TM for? If we really care about counterfeit drugs/phones and not counterfeit purses, then that affects how we treat TMs in those different areas—and may also cut against Mark McKenna’s argument, since we would be making judgments about what consumers should care about, or at least about what the law will enforce when they care about it.

McKenna: agrees the law does sustain certain consumer preferences and not others; it’s just not honest about it. [I agree: the structural problem is this—to say aesthetic functionality should be treated as robustly and with as much indifference to consumer confusion as utilitarian functionality is often to say that “we don’t care why consumers want what they want, we just want to give it to them,” and wanting an easy-to-hold baby bottle and wanting a Baroque place setting are both preferences that could be different under different social circumstances: there are plenty of places historically that have rejected “empirically” efficient technologies. Once we treat the functionalities the same, we have a hard time saying that preferences for exclusivity are off the table just because they compete with other people’s preferences for the aesthetic benefits. You have to at least then say that we are only interested in the preferences of direct consumers, and, John Stuart Mill-like, we don’t care about the negative utility created for non-consumers by defendant’s consumers.]

Beebe: democracy appears to need ordering devices—or at least we have a habit of having sumptuary codes, methods of identifying distinctions. In consumer society, hierarchy is based on possession of scarcity/rarity. IP is the one place that has as its goal the preservation of artificial scarcity, even when we could make a million copies. A symptom is effects on poor people, but we are all involved in the larger system of hierarchy.

Bartow: rarity might be redirectable to the label/name and not the trade dress.

Greg Vetter: How do we come to grips with people copying, and do we want to allow it? Be more explicit: the judiciary as a class contributes to this through the framework the Lanham Act allows.

Kumar: we’ve seen Supreme Court strike down Federal Circuit’s bright line rules: is the Court going to be receptive to bright line solutions? Doesn’t see Wal-Mart as such a bright line rule.

My tangent: look at huge resistance to eBay among courts applying the Lanham Act. Even though the presumption of irreparable harm from showing likely confusion is precisely the kind of bright-line rule the Court condemned, lower courts are entirely unwilling to say so. And I think this is because the empirics—the assumptions about how the world works, and specifically about how harm to TM owners occurs—are so encoded in judges’ minds that this won’t change until the default stories they have change.

Grynberg: how do consumers of these products feel? Do they condemn free riding? What do we know about this? Maybe people don’t like it when other people buy counterfeits, but maybe that doesn’t matter (John Stuart Mill again!).     

Vetter: there’s been a general failure to get empirical evidence. In patent, courts are most willing to eyeball tech and decide whether it’s obvious when it’s simple, and that’s mostly what happens with product design as well.

McKenna: Anti-free-riding principle is not uniform. Nobody thinks it’s wrong to copy a device whose patent has expired. Nobody thinks it’s wrong to copy something unpatentable. Every time you see a Walgreens on a corner, there’s a CVS on the opposite side. One figures out where a good intersection is, and the other copies. Nobody thinks that’s a problem. Free riding is an impulse that sometimes applies and other times not, so it’s not a good enough explanation. Beebe’s point: why do courts react badly to this type of free riding? Why is it good to copy mechanical features that aren’t patented but bad to copy aesthetic features that aren’t patented?

Heymann: Different people have different reactions. In part some are educated by the law and the marketers about where the line is. Also wonders about how the class interactions are occurring: are people really interacting across classes so much that they are making judgments about who has a real Rolex?

Bartow: she objects to blurring knockoffs and counterfeits. Proper labeling makes it a knockoff; even if you know that it’s a counterfeit and there’s no likely confusion, it’s still a counterfeit.

Lastowka: doesn’t this cut down on your argument substantially?

Gerhardt: maybe a safety example might help—where the TM guarantees something other than social class.

McKenna: design features are TMs. Maybe you just want to say normatively is that a counterfeit is a copy of a product that uses the word mark or logo; every time you expand what you’re willing to cover you make it harder to draw lines.

Maybe you’re only protecting design features when there’s exact copying.

Gerhardt: Charlie Henn says they won the Adidas/Payless trial when opposing counsel picked up the wrong shoe—when their own lawyer couldn’t distinguish three from four stripes, who decides?

Greg Lastowka, Trademark’s Daemons

What’s been bothering him: a 10,000-foot view. We say TM is about consumer confusion, but what is this dilution stuff about? Why all these weird results? The trope of the daemon: judges, given the malleability of likely confusion and flexibility in using the factors, often end up deciding cases in ways that purposes that don’t have much to do with the supposed foundations of TM law. When they do, it makes the doctrine incoherent.

One example: misusing TM to serve copyright’s goals. Sega v. MAPHIA, where bulletin board serves copies of Sega games, with Sega TMs in software because they were true copies. Is anyone confused about source? No, they’re coming from Sega! But the court says that consumers would think they were endorsed/sponsored by Sega when downloading from this pirate site. Trade dress are often situations where TM is trying to pick up copyright’s slack: Wall of wine case: judge goes on at length about how beautiful and award-winning the wall of wine is. The judge thinks something this nice deserves protection, then finds likely confusion, when the store is in a different region, with a different name. Protection of creativity via TM.

Another: identity. White v. Samsung is a perfect example—somehow when I see a robot I’m confused and I think the robot is the Vanna White mark. Bizarre except as importation of right of publicity. The merchandising cases also make more sense seen this way. Individual team logos are marks associated with collective identities; courts see free riding on those collective identities and feel uncomfortable about misappropriation.

Efficiency: a lot of doctrine says Landes & Posner got it right in their economic analysis of TM law. Dilution especially, talks about TM as if it were a propertization regime. TM owners invest in the value of their brands and own that value and others aren’t allowed to profit from them. And that’s efficient. Search costs replace consumer deception. It’s not that likely confusion is clear, but search costs are license to go crazy, as some “explanations” of dilution show. ACPA: cybersquatting doesn’t raise much likely confusion; required bending the doctrine. ACPA put into TM statute a prohibition that has to do with reducing search costs, not confusion. Efficiency works into a large portion of TM at that law—doesn’t know if it could be expelled.

Fair use: a mess in TM. Classic fair use (descriptive/non-TM use) is completely fine. That’s nonconfusing and noninfringing. Outside the scope of the TM owner’s rights. When TM doctrine grows, then we see a need to allow consumers and competitors to use the TM. Nominative fair use is really about expanding TM rights because it shifts the burden to disprove confusion to the defendant—a backformation of the expansion of TM. (This is like the current reading of Folsom v. Marsh in copyright: fair use turned out to be a way to allow overall rights to expand.)

Motivations that seem to be fueling judicial decisions that aren’t often explicitly noted. We should bring them out into the open.

Bartow: another possibility for a daemon: courts that don’t understand that the Abercrombie spectrum requires looking at the mark in the context of the good.

McKenna: struck by Lastowka’s use of “deception” as the core of TM, because he thinks that’s right. So the daemon that the rest of the daemons come through is actually confusion. If courts were required to talk about deception, many of these problems wouldn’t arise. There are so many things you can call confusing—but about what? TM shouldn’t be about thinking, it should be about preventing mistaken purchasing decisions.

Lastowka: agrees—deception is really what we’re getting at.

McKenna: the idea of uncertainty, not really knowing, maps really well onto search cost idea. Deception doesn’t map well onto search costs.

Vetter: A daemon is a judge-influencing meme. Maybe “efficiency” should be replaced with “economics.” Or even “property.”

Lastowka: all of the above, but judges use the word efficiency, which is why he picked it.

Vetter: the fair use one is a parasite of the first three—it would go away in a different ecology.

Grynberg: Unfair misappropriation of brand value: how is this coherent/meaningful? Very easy to describe creativity/identity daemons in the context of courts trying to vindicate “if value, then right.” The real daemon is the view of goodwill as having any kind of meaning independent of consumer interest.

My reaction to Vetter’s idea: may make sense to look at really na├»ve TM opinions by judges clearly unfamiliar with the concept, as with the district court judge in the Crimson Tide paintings case now on appeal. Are they doing better with their outcomes? They aren’t infected by any daemons.

Beebe: talk about misappropriation directly.

Lastowka: judges are sensitive to that; might fit into an INS v. AP doctrine.

Heymann: think also about why plaintiffs are suing in this way: what injuries do they feel for which they are seeking redress? So much of the law comes through threat letters or filing the suit even if it’s not adjudicated. Corporate psychology: what interests are they trying to vindicate? Why does TM feel like the way to handle the problem?

McKenna: goodwill and creativity are related: if you don’t have a strict definition of goodwill as consumer purchase-related, and see it in general terms of liking the company, then it makes sense to say that people like companies that offer them creative things and find that creativity is within the interests TM protects.

Bartow: does have empathy for celebrity desires not to be associated with bad products or offensive products.

Lastowka: is sympathetic to that goal too, but doesn’t fit TM.

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