TM roundtable, continued

Section 1, continued

Annette Kur: 1874: initial registration system in Germany—just for trader’s name plus optional pictorial elements.  Leading scholar developed the idea of TMs as emanation of personality, individualizing the trader. That lasted 20 years. 1894: first modern act allowing central registration and registration of work marks. Abandoned TMs as personality rights—which would make them inalienable. 1906: unfair competition act. Bringing the two together—jurisprudence went back and forth. First decisions held that registration always took precedence. Registered TM always prevailed over any prior use (no prior rights). After 1906, courts went the other way and didn’t give precedence to registration, but instead to first use.

Influential book on TMs & unfair competition: theory that registration coexisted with use. Registration is greenhouse/kindergarten for TMs in their weak phase.  Registering TM in infancy = safety. Use of mark alone isn’t safe until it achieves a certain level of public recognition, at which point it’s just as valid as if it were registered.  This is the system we still have today.

Notice: you notify others by registration or by a specific level of public awareness. Lies also behind the theory of well-known marks, which requires public awareness as a substitute for registration.

EU allows hybrid systems, like the German one, as well as the Danish system that acknowledges rights through use only.

In Germany, we use the system for TMs, but for trade names we have a purely use-based system. Trade names are protected on the basis of first use, without secondary meaning or public awareness/reputation.  (McKenna Q: is there a clear distinction?)  Identifies a business: trade name. Goods or services: trademark. But the distinction isn’t very clear when it comes to services. Art. 8 of Paris Convention requires protection for trade names without registration.  Hurts more if someone has to give up a business name than to have to find a new name for goods/services, or at least that’s a rationale. For trade names we don’t have the concept that protection needs to be throughout the entire territory—they can be local and co-exist.  (Goldman Q: does incorporation include review of trade name?)  Old system: need registration with local authority, no centralized system—look for a registration within the same system.  Very local—every town/court district.  Have been debates about central system for trade names, but rejected. Registration with authorities is necessary to comply with the laws of trade, but isn’t related to protection against law of distinctive signs (though you could be barred from registering a trade name that was already in use in your area).

We don’t have problems with a dual system; the problems arise with the relationship between the TM system which incorporates trade names and unfair competition proper, which is regulated separately and hasn’t been harmonized because there’s no clear idea about how the ban on misleading marketing connects with the TM system.  Big problems at the European level. Doesn’t seem that much is going to be done about this. 

We are stuck with a problem of clutter.  Detachment from market reality when registrations have to be examined by examiner who doesn’t see what’s going on in the market. Especially a problem for trade dress—examiner doesn’t see how this will work.  Detached from reality when it comes to conflicts between two marks.

Reform proposals: Commission will prohibit ex officio examination of conflict with prior marks, because TM offices don’t know what’s going on—inventing conflicts where no conflict exists.  In Europe, meaningful work with TM data is difficult because it doesn’t reflect reality.

Would ask: how can we get some benefits from the use-based approach?  Be stricter about TM use.  We need more data about problems from lack of monitoring use. We need to be much more sensitive about trade dress.

Rebecca Tushnet: I do teach registration first. TM lawyers promote registration, obviously, but clients are receptive to the message because it provides measurable deliverables and apparent certainty—insurance function.  Patents have been spoken of similarly by startups.  Pedagogically: Teaching registration introduces key concepts, but then you have to go over them again; still, that can involve useful reinforcement. (I also teach that TM law oscillates between consumer protection and producer expectations/predictability and that the doctrine allocates its concerns differently as to different issues, which seems to be a feature both of registration and of use based systems.)

US system is in a period of incoherence: is a registered mark strong? You can find courts saying this, which I see as a bit of pollution from registration-based systems.  Is an incontestable mark strong?  Even more courts say that than say that registration means strength, and it doesn’t make any sense from a use based perspective, where it’s consumer recognition that should make the mark strong.  The concerns behind incontestability are essentially orthogonal to strength.

Related: What is the significance of confusion to a descriptive fair use defense, since we know that incontestability is not really an exclusive right to use, per KP Permanent?  Why does the strength factor favor likely confusion except in parody and expressive use cases? That’s not really about confusion, it’s about unfair competition.

Also related, I think, to brokenness of multifactor test, which is asked to do too much.  Perhaps we shouldn’t be asking it to answer questions about registered marks?  Or perhaps not about unregistered marks (and only protect them against same goods/same mark)?  Is the vision of an unfair competition cause of action like the multifactor test?  Compare Daniel Gervais et al.’s recent article in IDEA arguing that keyword advertising should be recognized as unfair competition as free riding.

Pleading standards are our present substitute for registration for trade dress. Courts dismiss complaints if they don’t sufficiently identify the trade dress the plaintiffs claim to own.  It’s a way of implementing the error cost problem, but probably not the best one.  Dogan’s proposal looks more attractive when you look at how we’re getting the job done without registration—no one other than the judge has been tasked with defining the trade dress for legal pruposes, and doing that at the pleading stage under Iqbal/Twombly is non-ideal.  Registration as a substitute for judicial on-the-fly definition may have advantages for predictability, costs, and anticompetitive behavior.

Side note: why not require registration for dilution protection? Dilution is for producers/predictability concerns, not consumer protection; it is also only for the biggest producers, who are in the best position to know they need to register. This would help clear out some (though not all) bad dilution claims, especially in the trade dress context.  (Burrell asks if there should be defensive registrations as in Australia, where one can register for particular fields in which one isn’t using because of concerns about dilution—I would say as a first step, just require registration in order to qualify for fame, and not require identified fields in which dilution protection would be available.)

Mike Grynberg: we care most about trade dress, it seems, as well as problems of the multifactor test etc. Solving the procedure has some value, though.  How much do we trust courts v. signals from the PTO? Whatever we get from a registration system, we won’t get the clearest possible signal. Examination v. market reality, per Kur—you need an adversarial system to answer some questions. And these questions are independent of trade dress.  The nature of the admin. process isn’t conducive to solving the information problem. If we don’t trust administrators, or courts, who’s left?

Institutional design: what are the alternatives? Using Google as a type of private registrar?  UDRP?

Dinwoodie: incentivize proper claiming.  Louboutin: put in a specimen of use that was different from the claim.  Penalty could be failure to get a registration at all, not just a shrinking of the registration as the 2d Circuit ordered. 

Grynberg: Fed. Cir. has gone in the other direction for fraud on the PTO.

Dinwoodie: burdens on TM lawyers are policy levers. You sign under penalty of perjury; penalties for clients would matter.

Leaffer: would you deprive the registrant of ability to enforce an unregistered mark?

Dinwoodie: haven’t thought about that, but raises a great point—the only way to conceive a system is as a whole; if you just squeeze the issue to a different section, then your change won’t help.

Janis: when would you permit the registrant to reform a mistake?  Especially over time.

Eric Goldman: Lisa Ouellette wrote a paper on using Google to confirm strength of a mark.  Thought provoking. Notice works for word marks, but does it really work for non-word marks? Maybe image search is evolving; but still, if the registry is supposed to provide notice functions, how sure are we that it’s being accomplished?

Also relevant: Symbolic consequence of registration.  Scandalous marks?

Bone: Going back: Deeper problem with incontestability—why do we think of inherently distinctive marks as strong?  (I note a trend of courts finding that suggestive marks are relatively weak.)

We could have a deposit system, without examination.  Cost of false positives would exist, but could potentially be managed.

Screening is a non-notice function. Screening that works signals to the rest of the world that one mark may be more valid than another, but it’s more than that.  2(a): that’s not just sending a signal to the public that a mark isn’t scandalous.

Leaffer: registration is an obsession of TM lawyers in practice.  Is it simply having something to which they can point as return of value for money?  Would like empirical study of how practitioners view the value of registration (not just as PR) if it could be done.

Three & a half cheers for registration, which serves important functions albeit imperfectly.

McKenna: federalization v. state control. If we’re thinking more about specifics, we’re implicitly saying that we want more federalization. We should affirmatively preempt state law, which causes lots of problems on the margins.

Not optimistic w/r/t penalties—courts are really reluctant to strip parties of rights altogether, which we see in genericism & abandonment—stripping rights wouldn’t be enforced in any meaningful way.

Oscillation between consumer protection and mark owner’s expectations. Fundamental tension between use and registration—how dynamic v. how fixed you want the system to be. One reason for concern about registration/incontestability—things that don’t look descriptive now might be later; fixing something in time loses dynamism of consumer reaction. Wouldn’t bother me if we ruled out too much on the front end, even if that caused some confusion, because consumers adapt; confusion over non-core elements like product configuration would be short-lived. Use-based system can adapt more over time.

Litman: what are the state law problems?

McKenna: state law dilution that doesn’t require national fame.

Dogan: registration as lawyers’ self-interest? How much is client-driven registration?  Anecdotally, TM owners (or claimants) is that people are very acquisitive and have moral rights like relationship with “their” TMs. Registration is validation of ownership and personal connection. That’s not how we talk about this as scholars, but TM lawyers are more aware of the limitations of TMs than clients themselves. Feeling: Deserve a badge of approval. Has implications for §2(a)/scandalousness.  Mutual reinforcement of perceived self-interest, not just lawyer-driven.

Janis: what if the fees were higher?  How much would that validation be worth?

Dogan: worked on a case driven by the plaintiff’s perception that competitors were free riding on new flavors of sno-cones; just wanted to register them all, regardless of signification.  Economically irrational decisions because of feelings of being taken advantage of.

Goldman: Keyword advertising cases too.

Bone: brand as corporate identity.  That’s a reason to register, for the recognition and definition of what it is my brand is.

Burrell: false positives—thinks they’re a real problem. You can’t just look at a register and see something similar and easily choose something else.  Take clothing: No matter what you try to use, if you look you will find something that’s arguably similar registered for clothing.  It’s not the individual registration but the cloud of registrations that create the problem.

There is a sense that registration validates the brand.  People bring oppositions, too, to validate the brand.

Kur: OHIM wants a powerful free search engine creating all EU registrations, not just Community registrations. Combined with general search engine searches, maybe that would lead somewhere to get rid of disadvantages of detachment from reality we have now.

Scope of protection: there, serious problems. Should force registrants to show that their signs maintain distinctiveness on an ongoing basis. 

Dinwoodie: in US law, nonuse can kill rights. In EU, the right still continues, so that if when you get litigation and can show that there is presently use and distinctiveness the period of nonuse won’t matter. 

Kur: wouldn’t tolerate confusion, but even “likely confusion” in TM sense may not result in confusion in the marketplace, so we could allow two uses where there had been legitimate use during a period of nonuse. (To an American this is a hard statement to understand.)

Dinwoodie: note that Lanham Act was justified not just for consumer protection but also on the explicit ground that we have a national economy.

Sheff: Given the TM cases, there are dormant commerce clause issues that arise.  Even if you want to squelch state law dilution, there is still a role.

Dinwoodie: willing to take the chance, given the modern role of interstate commerce.

McKenna: it’s all interstate commerce now.

Dinwoodie: Nokia’s chief TM counsel discussing wellknown marks list in Norway—he asked why they were spending money on getting on the register even though it conferred no extra benefits. Because a shareholder asked! If they’re on the wellknown marks register, they must be important!  So Nokia paid what it took to get on the register in Russia.

RT: Jessica Silbey is writing about questions of trademarks understood as moral rights by claimants.  I agree, the motivation is not just lawyer-driven; lawyers can more easily get people to spend money on registrations than they can get them to change their ads for purposes of substantiation.  On Bone’s brand as corporate identity: you can’t register a brand, only a mark.  (See Deven Desai, Laura Heymann on naming.)  (Bone notes that he was not making a normative claim but discussing a TM owner’s thought process.)