Saturday, December 28, 2013

Taking on notorious criminal's persona is protected by First Amendment

Ross v. Roberts, No. B242531, 2013 WL 6780578 (Cal. Ct. App. Dec. 23, 2013)

Ricky Ross, aka Rick Ross and “Freeway” Ricky Ross, “is a former criminal who achieved some sort of celebrity status due, in part, to the enormous scale of his cocaine-dealing operations” during the 1980s. He ran a multimillion-dollar empire; was arrested; helped uncover a ring of dirty cops and helped free 120 wrongly convicted people; had his sentence reduced as a result; was rearrested shortly after his release in 1994; received widespread media coverage after that as a result of his peripheral role in Iran-Contra; and was released from prison in 2009.

William Leonard Roberts II “is a famous rap musician who goes by the name ‘Rick Ross,’” whose lyrics frequently include “fictional stories about running large-scale cocaine operations” (and occasionally celebrate rape, until walked back). In fact, Roberts is a former correctional officer, though he attempted to hide this and instead present himself as a drug-dealing rapper, as in his first commercial single, Hustlin’. Early in his career, he spoke about how Ross’s life story “grabbed him,” but later denied that his stage name was based on Ross and claimed it was instead a play on “big boss,” an old high school nickname.

In 2006 (the same year Roberts’ first commercial CD was released), Ross discovered that Roberts was using the Rick Ross name when he saw an article about up-and-coming rappers. Though he was still in prison, he contacted a lawyer to write a C&D, but that never got a meaningful response. Ross sued Roberts and other defendants for misappropriating his identity.

The court found that Roberts’ use of the “Rick Ross” name and persona was protected by the First Amendment because it incorporated significant creative elements. I challenge readers to distinguish this case from the Electronic Arts cases; I can’t.

Roberts initially sued in federal court, but the district court dismissed the federal claims and declined to exercise supplemental jurisdiction over the state claims, so he refiled in state court. He asserted various misappropriation/publicity-related claims. The state trial court found that his claims were barred by the statute of limitations, because the single publication rule meant that the period began to run upon Roberts’ first commercial use of the name. (The California rule: “No person shall have more than one cause of action for damages for libel or slander or invasion of privacy or any other tort founded upon any single publication or exhibition or utterance, such as one issue of a newspaper or book or magazine or any one presentation to an audience or any one broadcast over radio or television or any one exhibition of a motion picture.”) Ross argued that, at a minimum, each new album constituted a new and separate publication, but the trial court disagreed and also found that Roberts’ claims were barred by laches.

The court of appeals wasn’t convinced that these rulings were correct, but the First Amendment meant that it didn’t matter. To resolve the tension between the right of publicity (on which all of Ross’s claims were based) and the First Amendment, California uses the transformativeness test, examining “whether the new work merely supersede[s] the objects of the original creation ... or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message....” (internal quotations omitted). When there’s a literal depiction or imitation of a celebrity for commercial gain without adding significant expression beyond the “trespass” on the right of publicity, the state’s interest in “protecting the fruits of artistic labor” outweighs the imitative artist’s expressive interests. But when a work contains significant transformative elements, it’s both especially worthy of First Amendment protection and less likely to interfere with the celebrity’s protected interest in “markets for celebrity memorabilia.” (If we were to take this emphasis on “work” seriously, then the Electronic Arts cases would be wrongly decided even under the transformativeness test, but oh well.) So the question is whether the celebrity’s likeness is one of the raw materials from which an original work is cooked, or “whether the depiction or imitation of the celebrity is the very sum and substance of the work in question” instead of “primarily the defendant’s own expression rather than the celebrity’s likeness.” Comedy III. In close cases, courts may ask whether the marketability and economic value of the challenged work derive primarily from the celebrity’s fame.

Many cases involve visual representations, but that’s not the only expression to which the First Amendment applies. (RT: Indeed, on the record, visual depictions are far less protected than other kinds.) Here, transformativeness provided a complete defense. Roberts’s work, which the court defined here as “his music and persona as a rap musician,” relied “ to some extent” on Ross’s name and persona—rapping about trafficking in cocaine and bragging about his wealth. However, these were raw materials from which his career was synthesized, not the sum and substance of his work. Instead, Roberts created a celebrity identity (implicitly: one of his own, as opposed to an Elvis impersonator; cf. the discussion of Andy Warhol’s fame as making his portraits transformative in Comedy III). “He was not simply an imposter seeking to profit solely off the name and reputation of Rick Ross. Rather, he made music out of fictional tales of dealing drugs and other exploits—some of which related to plaintiff. Using the name and certain details of an infamous criminal’s life as basic elements, he created original artistic works.” A work is transformative if it adds new expression, which he clearly did.

The value test also supported Roberts. “Although it is possible that Roberts initially gained some exposure through use of the name Rick Ross and the reputation it carried, the value of Roberts’s work does not derive primarily from plaintiff’s fame.” The court assumed that people buy music because they enjoy that music, and thus it would be incredible to claim that Roberts’ success came primarily from appropriating Ross’s name and identity, instead of from his music and professional persona.

Ross argued that the First Amendment defense only applied to “likenesses,” not names. Estate of Fuller v. Maxfield & Oberton Holdings, LLC, 906 F. Supp. 2d 997 (N.D.Cal. 2012), rejected a First Amendment defense by the manufacturer of toys called “Buckyballs,” named for Buckminster Fuller because the toys could be manipulated to resemble a molecule commonly known as a “buckyball,” named for Fuller. The Fuller court held that transformativeness depended on the visual nature of the transformation, and that use of a name isn’t an act of expression the way creation or alteration of an image is; a name, it reasoned, can’t be transformed while remaining recognizable, as an image can. (Benedict Cumberbatch fans might disagree.) Also, Fuller’s name and identity wasn’t part of the actual toy product: the toys didn’t depict or reference Fuller, only the molecule with which he was associated. (Two terrible rationales for the price of one!) There was no First Amendment protection “for the use of a celebrity’s name, transformed or otherwise, to sell an unrelated product.”

Thankfully, the court here wasn’t impressed either, though it distinguished Fuller rather than rejecting it. The First Amendment protects all forms of expression, including words and music; books are mentioned in Comedy III, and the subsequent Winter case emphasized that the defendants’ Autumn brothers were characters “in a larger story, which is itself quite expressive.” Also, Fuller involved an unrelated product, while Roberts “created music by adding significant transformative elements to the base components of plaintiff’s name and identity.” The product in Fuller “was in no way a transformed portrayal of the famous engineer and inventor,” while the rapper “Rick Ross” was “a highly altered, essentially fantasized version of plaintiff.” “Roberts’s music may be analogized to a work of fiction in which the protagonist bears some resemblance to the original Rick Ross.” This is a “raw material” situation; the resemblance “is merely a minor detail when viewed in the context of the larger story—Roberts’s music and persona are much more than literal depictions of the real Rick Ross.”

Friday, December 20, 2013

Irrationally sexist advertising

PETA notoriously has a lot of ad campaigns focusing on women's bodies and sexuality.  Two recent studies suggest that this backfires: dehumanizing women reduces intentions to support the organization.  It's a mantra that half of all advertising dollars are wasted--but perhaps there are ways to up that percentage.

Thursday, December 19, 2013

Firm that refers instead of represents might be falsely advertising

Larry Pitt & Associates v. Lundy Law, LLP, No. 13–2398, 2013 WL 6536739 (E.D. Pa. Dec. 13, 2013)

The parties compete to represent clients in the greater Philadelphia area, primarily in the fields of “small personal injury, social security disability, and workers’ compensation law.”  Such clients allegedly select lawyers based on brand name or name recall, making advertising vital to business success.  Law firms seek “[m]ass reach, constant messaging, [and] saturation,” ideally on 1) the exterior of buses; 2) radio time slots just before and after traffic and weather updates; and 3) inside sports arenas.  Other alternatives, such as phonebooks, internet ads, billboards, and inside-bus/bus stop ads are allegedly less effective.

Pitt historically bought ad space on the exteriors of SEPTA transit vehicles and bus stops, sold by a national ad agency, Titan.  Lundy’s daughter Sara Lundy is an account executive at Titan, responsible for SEPTA ads.  Titan gave Lundy the exclusive right to advertise legal services on the outside of SEPTA buses, for which Lundy paid above market price.  The contract is one-year and renewable.  Pitt didn’t allege that it couldn’t make its own offer for an exclusive contract, nor did it allege that SEPTA rejected higher offers for exclusive contracts in favor of Lundy Law. Pitt received 142 client referrals from SEPTA ads (presumably including both interior and exterior ads) in 2008, 160 in 2009, 197 in 2010, and 146 in 2011, but only 16 in 2012 and 12 in 2013 after it was barred from bus exteriors.  Lundy made a similar exclusive deal to advertise on the exterior of BARTA buses, another area company; obtained an exclusive contract for rush hour ad slots around weather and traffic updates on the KYW radio station; and had an exclusive contract with the Wells Fargo Center sports and entertainment arena, all by paying “unusually high” advertising fees. Naturally, Pitt’s antitrust claims failed.

However, its false advertising claim survived: Lundy Law allegedly “advertises itself as a law firm representing clients in Social Security disability and workers’ compensation cases, when in fact it refers such cases to other firms in exchange for a referral fee, and does not actually represent clients in such cases.”  This was sufficient to state a claim under the Lanham Act: if the facts were as described such statements could be misleading and even literally false, and Pitt sufficiently pled that advertising influences purchase decisions.  However, Pennsylvania state law unfair competition claims require acts that “substantially interfere[ ] with the ability of others to compete on the merits of their products.” Because the antitrust claims failed, so did the unfair competition claims. (This seems to ignore the Restatement (Third) of Unfair Competition, which Pennsylvania follows, which provides that unfair competition can come either from such interference or from acts/practices actionable under federal or state statutes—which clearly includes the Lanham Act, the federal law of unfair competition; given that the Lanham Act claims survived, the state law claims should have too.)

The court also dismissed Pitt’s tortious interference claim for failure to sufficiently allege prospective contractual relationships or wrongful interference—exclusive contracts aren’t inherently tortious.

Pitt also alleged that Lundy filed a meritless trademark infringement lawsuit against Pitt for Pitt’s use of the phrase “Remember this Number” in ads (a phrase Lundy also uses). Within hours of Lundy’s discovery that Pitt’s insurer was defending the claim, the complaint alleged, Lundy voluntarily dismissed the suit.  “Pennsylvania’s Dragonetti Act allows a civil suit for wrongful initiation of civil court proceedings without probable cause and for a purpose other than securing adjudication of a legal claim, when the proceedings end in favor of the defendant.”  Lundy argued that the voluntary dismissal, early in the case, was insufficient to count as termination in Pitt’s favor, but a motion for preliminary injunction was fully briefed and pending and a hearing was scheduled.  Thus, the claim could continue.  However, the related abuse of process claim was dismissed, because improper purpose was insufficient for abuse of process without costs of defending beyond what was required to address the merits.  Plus, Pitt’s costs were covered by its insurer, and it didn’t allege any other injury.

Leading survey questions

A recent Australian case, Adidas v. Pacific Brands Footwear, included some comments on a standard TM survey question. I find the judge's point quite provocative; I wonder whether American judges might agree:
[R]elated to my first reason for giving the survey little weight in the sense I have explained, the question “Who do you think makes this shoe?” suggested to the participant that he or she ought be able to discern the origin of the shoe from the photograph and suggested an association to decoration and the origin. I accept the respondent’s submission that the question would lead to an over-attribution of the shoes to leading brands because the participants were asked to nominate a maker based on what was presented to them and to consider a matter which they may not have otherwise done.
I note that when a more general question was put in the pilot survey, “What is your reaction on seeing this shoe?”, the association between the three shoes of Pacific Brands and adidas was very low, being six people out of 300 participants. 
Images of infringing and noninfringing shoes may be found in the opinion.

Wednesday, December 18, 2013

fleeting uses in documentaries are fair, 4th Circuit says

Bouchat v. Baltimore Ravens Limited Partnership, No. 12-2543 (4th Cir. Dec. 17, 2013)

Bouchat has been litigating against the Ravens and others for a long time based on the Ravens’ infringement (established after a jury trial) of his design for a Ravens logo.  The logo was in use only for the 1996-98 seasons, but ever since he’s been litigating over uses of the logo in depictions of those teams.

The Fourth Circuit previously found that the use of the logo in season highlight films and in a film played at the stadium wasn’t fair.  See Bouchat v. Baltimore Ravens Ltd. P’ship, 619 F.3d 301 (4th Cir. 2010) (finding that footage of the Flying B logo in season highlight films and in a short video shown on the large screen during Ravens home games was not fair use, but that the Ravens’ display of the logo in images in its corporate lobby was). The court of appeals is forced to distinguish that result from its affirmance of fair use in different films, making for a greater-than-usual emphasis on how case-by-case fair use must be. This creates some tension with the court’s additional concluding section about how important fair use is for First Amendment freedoms, and how courts therefore have to give secondary users significant leeway, and its introductory statement that “[a]ny other result would visit adverse consequences not only upon filmmaking but upon visual depictions of all sorts.”

The court of appeals first affirmed the finding that fleeting use of the logo in three videos shown on the NFL Network and various websites, including Hulu, was fair use.  Two of the videos were part of the Top Ten series, each of which features a countdown of ten notable people or events in NFL history (of relevance here, one featured the Ravens’ 1996 draft class as one of the ten best draft classes of all time, while another featured a Ravens player as one of the ten most promising draftees who didn’t pan out).  The third was part of the Sound FX series, providing viewers with “an inside look at the sights and sounds of the NFL through players who wear microphones.”  Although the court spends a lot of time on each film because of the case-by-case trap it’s entered, the basics are this: each film offers a recounting and at least a minimal interpretation of various historical events in the NFL, of which the Flying B logo is a minimal part.  In the 1996 draft class video, the logo is visible twice for less than a second, once on a banner and a helmet at the opening of the segment, and again on the side of a helmet, in what the court characterizes as “exceptionally brief” appearances.  The relevant segment of the draft busts program features a St. Louis Rams player; at the end of the segment, a Ravens player tackles him and “it is possible to catch a glimpse of the Flying B logo on the player’s helmet if one chances to look at it for the fraction of a second it is visible.”  (For what it’s worth, as a non-fan I couldn’t figure out which second this was.)  The third video has a two-minute segment on Ravens linebacker Ray Lewis at training camp; during eight seconds, the Flying B logo is visible on some players’ helmets, and twice in other segments the Flying B logo is partially visible for less than a second when he makes a tackle.

[screenshot from Top Ten Draft Classes video]
 
Bouchat argued that the film clips here were materially indistinguishable from the infringing highlight videos from the previous round.  The use of the Flying B logo was nontransformative because it was “being used in the same way in these videos as it was in the infringing videos in Bouchat IV: to identify Ravens players.”

The court of appeals disagreed.  Transformative works “rarely” violate copyright rights because copyright’s goal of encouraging new works is generally furthered by their creation.  Transformative works add something new to the original purpose of the copied work.  Here, each of the videos was intended to “present a narrative about some aspect of Ravens or NFL history.”  The draft classes video “recounts the Ravens’ 1996 draft, documenting football’s return to Baltimore, the team’s strategy for the 1996 draft, and the impressive result of its efforts.”  The draft busts video “recounts the disappointing path of Lawrence Phillips’s once promising career, complete with interviews, game tape, and news footage.”  And the Sound FX video “provides an inside look at the career of Ray Lewis through the sights and sounds that accompanied his play.”  In each instance, the use of the logo differed from its original purpose.

The logo “initially served as the brand symbol for the team, its on-field identifier, and the principal thrust of its promotional efforts,” but none of the videos used the logo to serve those same purposes.  Instead, like the historical displays found to be fair use in Bouchat IV, “these videos used the Flying B as part of the historical record to tell stories of past drafts, major events in Ravens history, and player careers.”  (Citing Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d. Cir. 2006) (finding that Grateful Dead posters served as “historical artifacts” that helped readers to understand biographical text).)  The logo was used not for its expressive content, but for its factual content, and plainly added something new.  Physical transformation of the logo was unnecessary.

Transformativeness was reinforced by the “exceptionally insubstantial presence of the Flying B logo in these videos.”  (One reason this decision is nothing much to celebrate: it, like the recent Faulkner decision, has converted de minimis use into just another fair use cluster, continuing the trend of packing everything and the kitchen sink into fair use.)  The “vast majority” of its appearances were for only a fraction of a second, and you’d have to be looking for it to see it.  The extent of use can bear on transformativeness. “The Flying B logo cannot be said to serve its original function of identifying the Ravens players and organization if it is all but imperceptible to those viewing the videos.”  Its function isn’t expressive but historical, “within videos that construct new narratives about the history of the Ravens and the NFL.”  The longest use is under ten seconds, but that video is “replete with countless images of the Raven Profile logo,” which now serves the former expressive purpose of the Flying B.  Its incidental use was therefore transformative.

OK, you may ask (and Bouchat did), but how does this differ from the infringing highlight reels from Bouchat IV?

In reality … the uses are strikingly different. In the season highlight films from Bouchat IV, the logo was shown again and again, always as a brand identifier for the Ravens organization and its players. As we found, the logo simply replicated its original function when footage of the seasons was shot, condensed, and reproduced in a summary film.

Thus, the season highlight videos “did not change the way in which viewers experienced the logo, making the use non-transformative.” But here, the videos used historical footage to “tell new stories and not simply rehash the seasons.”  That’s a transformative use of the Flying B logo for its factual content.  (Ugh.  I mean, better a fair use finding here than not, but I do not understand why a straight-up historical summary of the season isn’t equally transformative and factual, other than that the NFL isn’t allowed to do it; I would hope an independent historian would get a different result.  I see shades of the appalling interpretation of transformativeness going on in publicity rights, discriminating against visual realism even though the court tries to prevent that.)

The other “[e]qually important” distinction was that the logo was “featured substantially, again and again, in the season highlight films,” but “it was used only fleetingly and insignificantly here. Its function as an identifier was significantly diminished, limiting its expressive value.”

Bouchat IV offered two hypotheticals that the court here thought showed that it was right:

In finding that the season highlight videos were not fair use, we laid out two different viewer experiences: In the first, an individual at home in her living room in 1996 watches a Ravens football game on television. The Flying B logo on the helmets of one team helps her identify the team as the Ravens. In the second, an individual at home today (2010) in his living room watches the 1996 Ravens season highlight film. The Flying B logo on the helmets of one team helps him identify the team as the Ravens. The logo plays the same role in each example. Its purpose is not transformed in the highlight film, viewed some fourteen years later.

It turns out that “transformativeness” in purpose reduces to the amount of time on screen: in the season highlight videos, the Flying B “still served the purpose of identifying the team as the Ravens as they play opponents -- its core and crucial function. But in the Top Ten and Sound FX videos, where it is rarely visible for more than a second, it cannot possibly serve as a meaningful identifier of the franchise.” 

(Another way to understand the contortions of this opinion is that the rejection of fair use in Bouchat IV was based on a trademark theory of value—it is trademark, after all, that protects identification function.  I cannot figure out how to distinguish “identification function” and “historical identification function” as the court here seems to want to; I think that’s why the court constantly returns to the brevity of the use.)

After transformativeness, all follows smoothly. Commerciality is “largely insignificant” when there’s substantial transformativeness.  And the limited nature of the use of the logo also meant that the commerciality of the overall video wasn’t significant.  “The key inquiry is the extent to which the Flying B logo itself – and not the videos as a whole – provides commercial gain to the NFL.”  Here the use was “incidental to the larger commercial enterprise of creating historical videos for profit,” and the role of the logo in facilitating profit was “unquestionably minimal.”

As to bad faith, Bouchat argued that prior findings of infringement counted against defendants. But “good faith” isn’t listed in §107, and “it is questionable whether allegations of subjective ‘bad faith’ could undercut a use that objectively was fair.” Even assuming that they could, the district court found that defendants had a good faith belief that they were engaging in fair use, and the court of appeals saw no reason to disturb that factual finding.  Bouchat IV weighed past infringements against defendants because of the lack of transformation.  “Here, because the use is transformative, any past infringement is simply inapposite.”

Nature of the work: the use wasn’t related to its expressive content but to its historical facts, making factor two neutral.  Factor three didn’t help Bouchat.  “Here, the NFL had no choice but to film the whole logo in order to fulfill its ‘legitimate transformative purpose’ of creating the historical videos at issue…. It would be senseless to permit the NFL to use the Flying B logo for factual, historical purposes, but permit it to show only a half, or two-thirds of it.”  Market effect: transformative use makes market harm unlikely to occur.  Given defendants’ decisive victory on factor one, the other factors were “largely neutral.”

The court of appeals paused to justify its decision with reference to “the underlying interests that inform copyright law and its relationship to the First Amendment.”  The primary goal of copyright is to benefit the public, which means balancing the rights of authors with the interest in the free flow of ideas.  “[C]reation itself is a cumulative process; those who come after will inevitably make some modest use of the good labors of those who came before.”  (Citing the MPAA’s amicus brief, which I’m allowed to find amusing.)

Fair use, then, is crucial to the exchange of opinions and ideas. It protects filmmakers and documentarians from the inevitable chilling effects of allowing an artist too much control over the dissemination of his or her work for historical purposes. Copyright law has the potential to constrict speech, and fair use serves as a necessary “First Amendment safeguard[]” against this danger.

What about the case-by-case nature of the fair use inquiry?  This can deter free speech.  “As a result, fair use must give speakers some reasonable leeway at the margins.”  (How this is to be squared with Bouchat IV is left as an exercise for the reader.)  The videos in suit “share the qualities of other historical documentaries. They feature three key components: archival footage, commentary, and interviews. These ingredients are crucial to the creation of any historically accurate film.”  They aligned the videos with the “criticism, comment, news reporting, teaching . . . scholarship, or research” of §107’s preamble. 

Requiring permission for “fleeting factual uses” would give copyright owners too much control over depictions of history. “Social commentary as well as historical narrative could be affected if, for example, companies facing unwelcome inquiries could ban all depiction of their logos.”  (But if you have a documentary about Coca-Cola, can you make more than “fleeting” uses?)  The “logical outcome” of Bouchat’s position would be lower accuracy, increased transaction costs, and fewer new expressive works. “[J]ust as it would have been a terrible shame to prevent Edward Hopper from painting the ‘Esso’ sign in his masterful Portrait of Orleans, so too would it be a mistake to prevent the NFL from using the Flying B logo to create new protected works.” Maybe the NFL is a less sympathetic defendant than Hopper, but this case has implications far beyond its facts. “Society’s interest in ensuring the creation of transformative works incidentally utilizing copyrighted material is legitimate no matter who the defendant may be.”

Given all this, the result of Bouchat’s claims against what the court calls “the incidental use of the Flying B logo in certain historical displays located on the ‘Club Level’ of the Baltimore Ravens’ stadium” is also foreordained.  The Club Level is only accessible to people who buy tickets priced between $175 and $355 per game. The displays at issue were “a timeline, a highlight reel, and a significant plays exhibit” covering over a hundred years of history, and the Flying B logo played an incidental role in only a fraction of the historical events depicted. 




Bouchat IV caused some debate because of its reference to how the displays approved there were in a “museum-like setting,” but that didn’t actually matter to whether the displays here were transformative. “Collectively, the displays provide a multi-faceted portrait of the evolution of professional football in Baltimore. The Flying B logo is included merely as an incidental component of this broader historical narrative,” rather than as a focal point of promotional efforts.  It was also true that Bouchat IV relied heavily on the fact that the displays there were open to the public free of charge, but the exclusivity of the Club Level wasn’t dispositive. “The Club Level displays … produce what is essentially an atmospheric effect. They are a negligible, fringe benefit of club membership. The gourmet food, shelter from the elements, and view of the game – not some miniscule aspect of the wall decor – provide the primary motivators for purchasing a Club Level ticket.”  In particular, no one is paying hundreds of dollars to see the Flying B logo.  “The mere use of a logo in a profit-making venture … is quite different from its commercial exploitation.”  Thus, both transformativeness and commerciality cut “decidedly in favor of fair use.”

While the district court made no findings on a licensing market for historical logos, “findings in Bouchat’s favor on this point would be insufficient to overcome the substantial weight of the first three factors.”  And without market data, the fourth factor was neutral.  (Compare Campbell, finding that it was defendant’s burden to produce evidence, in the absence of which summary judgment was inappropriate.  The lower courts have basically, and correctly on the merits, decided that the Supreme Court couldn’t really have been serious about that.)

Finally, after reiterating its First Amendment concerns, the court said that its decision “provides no support for a fair use defense where the alleged infringer exploits a protected work for profit based on its intrinsic expressive value.”  But here, the uses “were not only transformative, but also – take your pick – fleeting, incidental, de minimis, innocuous.”  Protecting historical documentaries and displays, and their makers, required this result.

The ASA and ads for offensive products


The UK’s Advertising Standards Authority would seem to have a particular remit: advertising.  A recent adjudication, however, suggests that the ASA will go beyond that, at least online.  Zazzle Inc, No. A13-247896, involved a complaint that Zazzle’s offering of a mug with the words “World’s Greatest Dad” and an image of notorious child rapist/abuser Josef Fritzl was offensive.  There doesn’t appear to have been any advertising other than the image of the mug itself on the seller’s webpage.  Zazzle didn’t respond to the ASA’s inquiry.  The ruling stated:

We noted the product was navigated to via the humour section of the personalised product website, but noted the product was not otherwise targeted. We considered that the juxtaposition of the image of Josef Fritzl next to the words “World’s Greatest Dad” made light of the widely reported incidents of sexual and physical abuse of his daughter and therefore concluded that the ad was likely to cause serious and widespread offence.

Of course, it’s not the ad but the product that’s offensive.  So how far does the ASA’s authority over expressive products extend?

Tuesday, December 17, 2013

"Natural" plus green imagery not puffery for diapers and wipes

Jou v. Kimberly-Clark Corp., No. C-13-03075, 2013 WL 6491158 (N.D. Cal. Dec. 10, 2013) (magistrate judge)

Plaintiffs brought the usual California claims and claims under Wisconsin law based on the “green” marketing of Huggies “pure & natural” diapers and “Natural Care” baby wipes.  Plaintiffs alleged that they paid a premium for the products based on these representations.


The diapers use the brand name prominently on the front of the packaging, which also says that the diapers are made of “soft organic cotton” and displays green coloring, trees, and leaves, in contrast to conventional Huggies. Plaintiffs alleged that, in fact, P&N diapers didn’t differ materially from other Huggies.  “First, while the product contains organic cotton, the cotton is only on the outside of the diaper and therefore never actually comes into contact with the ultimate user, the baby,” defying reasonable consumers’ expectations that the total diaper is organic cotton.  Second, the diaper liner includes “unnatural and potentially harmful ingredients, such as polypropylene and sodium polyacrylate, which are components of Defendant’s traditional diapers,” and the actual composition isn’t disclosed.

On the wipes, “Natural Care” is displayed prominently on the front of the packaging, along with green coloring and leaves. But the wipes contain sodium methylparaben and methylisothiazolinone, which allegedly are not natural and hazardous (and restricted by other countries).

Standing: allegations about reliance on the misrepresentations established economic injury and thus standing.  Kimberly-Clark’s argument that plaintiffs didn’t properly demonstrate the gap between what they paid and the value they received conflated standing with remedies.  However, because of the Ninth Circuit’s standing rules, plaintiffs lacked standing to seek injunctive relief because they didn’t allege that they’d resume purchasing the products if they were properly labeled.  Though some cases hold that applying this rule thwarts the point of a consumer protection class action (because it does), the magistrate judge disagreed, reasoning instead that a plaintiff could theoretically seek injunctive relief: “it is not impossible that a consumer would be interested in purchasing the products at issue if they were labeled correctly.”

The court then found that the allegations satisfied Rule 9(b).  It identified who bought which products and when; where the misrepresentations occurred (the package); and what the misrepresentations were and why they were false. Plaintiffs alleged reliance, and it was plausible to infer that they meant that they looked at and relied on the front of the package.  “After all, the goal of Rule 9(b) is to provide the defendant with notice, not to ensure that the plaintiff has adequately pled causation.”

Kimberly-Clark argued that plaintiffs didn’t plausibly allege that a reasonable consumer would likely be deceived, but the magistrate judge disagreed.  As for the diapers, “pure & natural” could lead a reasonable consumer to believe that that the product is free of non-natural ingredients, especially reinforced by “Soft Organic Cotton.”  That cotton didn’t touch the baby’s skin, but the non-natural protions did.  In addition, the green banner and images of leaves plausibly reinforced a reasonable consumer’s belief that the diapers were entirely natural.  Contrary to Kimberly-Clark’s arguments, the words “all,” “only” or “100%” were not required for likely deceptiveness.  “Whether one labels a product ‘natural’ or ‘all natural,’ the same plausible inference can be drawn– that the product is natural, meaning it is not made with any non-natural ingredients.” Also, “natural” didn’t stand alone on the diapers—“pure,” like “all,” emphasizes the natural state of the product.  Kimberly-Clark conceded that “purely natural” plausibly would lead a consumer to expect a synthetic-free product, and the judge didn’t see any difference based on the ampersand.

Kimberly-Clark contended that “pure & natural” was mere generalized puffery.  But “describing a product as ‘natural’ or ‘pure & natural’ is not generalized and vague.” Kimberly-Clark even argued that the phrase was true because the diapers had some natural ingredients. The issue was not whether the term was devoid of meaning, but rather what meaning reasonable consumers would give it.  Nor was the term puffery because reasonable consumers know that diapers and wipes can’t really be natural, in that they don’t grow directly from the earth.  This was a caricature: the allegations were that consumers would believe that “natural” means that the diapers had no non-natural ingredients.

In addition, “natural” was not puffery just because the FTC has declined to provide general guidance on the use of the term, which it did because it lacked sufficient consumer perception evidence and because the word might mean different things depending on the context.  That didn’t mean that this use had no specific meaning.  To the contrary, the FTC explicitly warned that some uses of “natural” could be deceptive:

Marketers that are using terms such as natural must ensure that they can substantiate whatever claims they are conveying to reasonable consumers. If reasonable consumers could interpret a natural claim as representing that a product contains no artificial ingredients, then the marketer must be able to substantiate that fact. Similarly, if, in a given context, a natural claim is perceived by reasonable consumers as a general environmental benefit claim or as a comparative claim (e.g., that the product is superior to a product with synthetic ingredients), then the marketer must be able to substantiate that claim and all attendant reasonably implied claims.

The judge also rejected Kimberly-Clark’s argument that the packaging clears up any misconception by identifying which parts of the diaper were natural: “Soft Outer Cover With Organic Cotton” “Aloe & Vitamin E,” and “Liner Includes Renewable Materials,” were on the back or side panels.  But, under the Ninth Circuit’s Williams rule, reasonable consumers aren’t expected to look beyond misleading representations on the front of the packaging to discover the truth from small print or from the back of the packaging. “Further, the Court fails to see how the disclosures necessarily inform the consumer that the diapers include non-natural ingredients.”  Taken together, the phrases suggested that the entire diaper wasn’t made of organic cotton, but didn’t disclose what the “renewable materials” were or what other ingredients were included, such as polypropylene and sodium polyacrylate.  Kimberly-Clark argued that Williams was restricted to cases of affirmative misrepresentations.  First, plaintiffs pled an affirmative misrepresentation; second, the claim was that the diapers misrepresented that they only contained natural ingredients.  “Thus, it is irrelevant that the disclosures ‘confirm’ that the product does indeed contain some natural ingredients or that the disclosures ‘clarify’ which ingredients are natural.”

The judge then dismissed the relevance of Hill v. Roll Int’l Corp., 195 Cal.App. 4th 1295 (Ct. App. 2011).  Hill rejected claims that a bottle of Fiji water was misleading because its packaging included a “green drop” that inaccurately conveyed that the product was endorsed by a third-party environmental organization and referred to the website fijigreen.com.  While a reasonable consumer would likely perceive an environmental reference from the green drop, that didn’t mean she’d view it as a third-party endorsement, and the website wasn’t alleged to contain any false or misleading information.  Plaintiffs here didn’t allege that the green leaves alone were misrepresentations, but rather contributed to the context of the words.

However, the court agreed that it wasn’t plausible that a reasonable consumer would believe that the diapers were made exclusively of “Soft Organic Cotton.”  Instead, the phrase merely communicated the presence of that material, unlike “pure & natural” which at least implicitly represented that the product was not impure or unnatural.

As for the “Natural Care” wipes, it was also plausible that the packaging would likely deceive a reasonable consumer.  “By labeling these wipes as ‘Natural Care,’ and superimposing that term on an image of a green leaf, it is plausible that a reasonable consumer would likely be led to believe that the wipes contained only natural ingredients,” and not allegedly toxic synthetic ingredients.

Finally, the court found that plaintiffs couldn’t state a claim under Wisconsin’s consumer protection law, not because they lacked “standing” as Kimberly-Clark first argued, but because that law only applied to misrepresentations made in advertising “in this state,” that is, in Wisconsin.  It did not cover misrepresentations merely formulated in Wisconsin (where Kimberly-Clark devised and implemented its marketing program). Thus, while plaintiffs could in theory bring two causes of action under different states’ consumer protection statutes, the law here didn’t support such a claim.

FCC regulation doesn't preempt action against wireless router ads

Netgear, Inc. v. ASUSTeK Computer, Inc., No. C 13-3405, 2013 WL 6512700 (N.D. Cal. Dec. 12, 2013)

Netgear sued defendants, whom I’m going to call ASUS, alleging claims for false advertising/unfair competition, tortious interference, and violations of the Sherman Act.  The parties compete in the market for wireless routers.

The FCC has made rules for wireless routers.  They must be tested and authorized by the FCC before they can be marketed or used in the US.  Manufacturers or sellers can certify compliance with FCC limits by performing tests on the routers to measure how much radio frequency energy they radiate, and to confir that they comply with FCC requirements.  The applicant must file a report with the FCC detailing its procedures and lab results.  The FCC reviews the report and may or may not request a sample for tests.  If the application checks out, the FCC will issue its certification. The FCC doesn’t test transmitters as a matter of course to determine if they match reported test results.

The complaint alleged that ASUS obtained certification for multiple wireless routers using tests performed by the Taiwanese QuieTek Corp.  The measurements were allegedly either false when made, or ASUS modified the models at issue after testing without FCC authorization.  In fact, the models allegedly produce outputs “far in excess of those represented to the FCC, produce outputs that exceed FCC maximum output levels, unlawfully cause interference with adjacent bandwidths (potentially including critically important navigation communications, and safety devices), and operate in a manner that has never been accurately reported to the FCC.”  ASUS thus falsely advertised the routers’ compliance with FCC regulations, which harmed Netgear because ASUS routers were touted by some (interesting vagueness there) as being more powerful and providing a more stable connection than Netgear’s competing products.  To the extent this was true, Netgear alleged, it was possible only because of the noncompliance with FCC radiation standards.

ASUS moved to dismiss the claim as preempted by the FCC’s exclusive authority to enforce its standards. There’s no private cause of action for violating an FCC regulation.  ASUS relied on Pom Wonderful LLC v. Coca–Cola Co., 679 F.3d 1170 (9th Cir. 2012), and PhotoMedex, Inc. v. Irwin, 601 F.3d 919 (9th Cir. 2010), which both barred Lanham Act claims that would have required the court to interpret FDA regulations. 

PhotoMedex involved allegations that a laser was falsely advertised as “FDA approved,” but the FDA eventually found that the laser was substantially equivalent to the earlier laser, which was enough for approval.  The plaintiff couldn’t bring a claim: “In a context where the statute and regulations place responsibility in the first instance on the manufacturer to determine whether its device is covered by a previous FDA clearance and permit marketing of the product without an affirmative statement of clearance by the FDA, it is impossible for PhotoMedex to prove that Ra Medical’s device had not been cleared by the FDA when the FDA itself did not take that position.” 

Pom barred a lawsuit over the labeling of a product as “Pomegranate Blueberry Flavored Blend of 5 Juices” when it contained only 0.3% pomegranate juice and 0.2% blueberry juice, because the Ninth Circuit determined that FDA regulations authorized the name.

Both cases emphasized the importance of evaluating each case and giving as much effect to both statutes as possible. Here, unlike cases where resolution of Lanham Act claims would conflict with FDA regulations and require the court to undermine what the FDA apparently determined, Netgear could prove its claims by showing that ASUS falsely advertised that its products met FCC standards, either by submitting falsified test results or by altering their wireless routers after testing. Such proof didn’t risk undercutting the agency’s expert judgments, because the allegations didn’t implicate FCC determinations or require interpretation of ambiguous regulations. 

For similar reasons, ASUS’s field preemption argument against the state law claims failed.  ASUS argued that Congress clearly intended the FCC to occupy the field of setting and enforcing technical standards for radio frequency emissions. But the claims here didn’t implicate the FCC regulation of interference, or seek to impose additional requirements not imposed by the FCC; they were just false advertising claims.

Nor would the court stay the claims based on the primary jurisdiction doctrine.

The TPP and termination rights

The TPP’s Attack on Termination Rights?  Provocative post on EFF’s blog.  Of course we will be told that the TPP doesn’t require changes in domestic law (it just bars many improvements, something that ought to be notable given that Washington seems to be gearing up for real copyright reform).  But (a) given the secrecy, I’d rather verify than just trust, (b) the US has ignored its international commitments in IP for years when it suits domestic political forces, but doesn’t extend the same consideration to others, so I can absolutely believe we’d push a rule that we’d be immediately violating.  (See also Margot Kaminski’s excellent work on US positions that unduly constrain and even conflict with US law, such as Kirtsaeng, presented in this forthcoming article.)  But maybe the TPP’s proposed language allows restrictions on transfers like our current termination rules.  Maybe we’ll eventually find out. 

Descriptive or nominative?

I like clever ads that play both on trademark and non-trademark meaning, but I always wonder if our defenses are sufficient to accommodate them:
I saw no indication on the ad that Walmart sought permission for this use of "Apples" (notably, not the usual plural for iPads), nor do I think permission is needed!

Monday, December 16, 2013

plaintiff not enough of a competitor to win false marking claim

Sukumar v. Nautilus, Inc., No. 7:11–cv–00218, 2013 WL 6408351 (W.D. Va. Dec. 6, 2013)

Previous discussion.  The court goes through a lot of facts and effort here to confirm that the AIA made false marking claims essentially impossible to win, and I’m not so sure about that adverb.  Sukumar sued Nautilus for false marking of certain exercise machines, and, even despite the court’s ruling that some false marking occurred, the court found that he hadn’t shown enough evidence of “competitive injury,” as required under the AIA.  Coordinate state law claims also failed for lack of evidence of proximate causation.

Sukumar founded plaintiff Southern California Stroke Rehabilitation Associates (SCSRA) with the intention of opening stroke rehabilitation centers.  Based on his experience with his elderly father’s illnesses, he made strength training equipment a central part of his plan. He believed Nautilus machines would need to be modified to serve the senior fitness and rehab market, and developed concepts for such machines.  As part of his research, he bought a number of different exercise machines from Nautilus and others.  In the course of his investigations, he was told several times by Nautilus employees or representatives that Nautilus machines were patented and that Nautilus vigorously protects the machines from patent infringement.  The Nautilus machines also contained patent labels.  “[A]t least some of the patent labels on the machines were false, in that they listed patents that did not apply to that particular machine.”

Sukumar also ordered a number of customized Nautilus machines, but was dissatisfied with the delivered machines and sued the distributor for breach of contract and Nautilus for inducing breach.  He lost those claims.

He testified that he wanted to enter direct competition with Nautilus, but because of the patent statements, he thought he needed a license.  He twice sought a license from Nautilus to modify the machines, at least once in the context of a settlement discussion.  He argued that, had he known those machines were not patented, he would have built his own machines for sale and thus competed directly with Nautilus. However, his testimony was contradicted by terms in the settlement letter, in which he claimed he wanted to license Nautilus technology solely for use in SCSRA centers; at his deposition, he testified that he only formed the intent to make and sell customized machines in early 2012.

Although Sukumar claimed to have been working on his designs since the late 1990s, he and SCRSA are not presently Nautilus competitors.  SCSRA has no other employees; they haven’t created or opened any senior spa centers or stroke rehabilitation centers; they haven’t sold any modified Nautilus equipment or machines of his own design; they hold no patents on fitness equipment; SCRSA has yet to show a profit in any year; and Sukumar’s patient protocol isn’t written, but kept in his mind.  In rebuttal, plaintiffs emphasized their efforts since the early 2012 decision that the machines were falsely marked.  They retained an expert on the senior fitness market and worked to develop a business plan and retain other industry professionals; they were working with a design house and manufacturers to develop prototypes; and they were working to buy land for a manufacturing facility. Thus, they argued, were it not for the false patent labels, they could and would have engaged in such efforts previously.

Plaintiffs’ injuries, they argued, were delay in entry into the fitness equipment market; unnecessary expenses in attempting to license or purchase Nautilus patents/assets and those of another manufacturer; unnecessary expenses in analyzing the validity and enforceability of the falsely marked patents; and unnecessary expenses in storing machines they acquired.

None of this was sufficient.  The AIA requires “competitive injury,” in order to eliminate abusive qui tam actions.  Although plaintiffs relied on the idea that they were competitively injured when they were impeded in their efforts to enter the market and incurred unnecessary costs, citing Forest Group. Inc. v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir. 2009), that case has been superseded by the AIA, and in any event involved parties who were concededly competitors.

“Indeed, some of the precise harms that Plaintiffs claim here, e.g ., unnecessary investment in design around costs, or costs incurred to analyze the validity or enforceability of patents, are described in [another case] as hurting ‘a member of the public [who] desir[es] to participate in the market for the marked article.’ Those harms would not be competitive injuries, therefore, but instead harms suffered by the general public.”  Forest Group didn’t identify the harm of dissuading potential competitors as competitive injury.  The case law to date was ambiguous about potential competitors; analogies to the Lanham Act were also not dispositive.  The court declined to make a blanket ruling on potential competitors. Instead, it held that no reasonable jury could conclude that these plaintiffs suffered a competitive injury.

Assuming that prevention of entry into the market is actionable, “it must mean that the entity was capable or able to compete (or actively trying to do so), but that the false marking impeded those efforts in some concrete way. A competitor must do more than show it had a desire to compete, and that it did not attempt to compete out of a fear of infringing another’s patent.” But that’s all that plaintiffs here could show. “It simply defies common sense to conclude that, for more than ten years, Plaintiffs have not entered the market to compete with Nautilus and that the sole item holding them back was their fear of infringing patents that were falsely listed on the accused machines’ patent labels.”  Plus, a subjective fear of infringing was insufficient to establish competitive injury, because that standard would allow lots of plaintiffs to sue.  Notably, the Federal Circuit has rejected subjective fear of infringement as sufficient injury to convey standing to challenge a patent. 

Sukumar might well have great ideas, and since 2012 he might have begun in earnest trying to make them reality. “But concerted efforts after a lawsuit is filed or a partial decision rendered is not proof a jury can rely on to determine that the reason those efforts were not taken sooner was because of false patent labels.” This was especially true because he repeatedly blamed other, non-false marking actions by Nautilus for years of delay in his business objectives.  His sincere belief didn’t substitute for evidence that “if not for Nautilus’s false marking of its machines, the road to Plaintiffs’ development of competing machines and rehabilitation or spa centers would have been swift and easy and that SCSRA would be competing with Nautilus today.”

In addition, there was insufficient evidence that plaintiffs ever intended to compete with Nautilus in the relevant market—making and selling exercise equipment—before the lawsuit, as opposed to using machines in his own facilities.  In fact, plaintiffs’ changing plans further showed that they weren’t sufficiently established as a business to suffer competitive injury.

The other claimed damages were also insufficient.  Any claimed overpayment for machines based on the false marking, even if it occurred, was injury as a consumer, not competitive injury.  As for the unnecessary expenses in analyzing/attempting to license the patents, etc., they weren’t competitive injuries for the same reasons: “Plaintiffs are neither competitors nor sufficiently close to competing to state a valid claim for ‘competitive injury.’”  Plus, the licensing attempts were part of an effort to settle pending litigation, unrelated to false marking.  There was also no evidence that storage fees and legal fees incurred in analyzing the patents’ validity were caused by the false marking; Sukumar had previously blamed other causes, such as Nautilus’s breach of contract or warranty, on the claimed storage fees.  

Nor is work performed to determine the validity of Nautilus patents inherently a competitive injury, but rather a “generic” type of harm.  Also, the fees weren’t unnecessary because they were the basis for the lawsuit, but attorneys’ fees aren’t recoverable in a California consumer protection claim, so to allow them to count under the AIA would be an unacceptable end-run.  (Comment: what?  That makes no sense to me; the AIA is not a coordinate federal law to the general California consumer protection law, and anyway the feds are entitled to decide what counts as injury to a federal right.)

In any event, the harms alleged were simply too speculative for a jury to find them to have been caused by the false labels.

The state law claims under California and Washington law also failed, even though they didn’t require competitive injury: they required damages caused by the mismarking, and evidence of causation was absent.

soy and almond milk couldn't deceive reasonable consumers

Ang v. Whitewave Foods Co., No. 13-cv-1953, 2013 WL 6492353 (N.D. Cal. Dec. 10, 2013)

Plaintiffs sued over defendants’ Silk and Horizon products. The Silk products are plant-based beverages, including Silk Vanilla Soymilk, Silk Almond Milk, and Silk Coconut Milk.  The Horizon products are yogurt and milk products.  The court dismissed the usual California claims with prejudice.

Plaintiffs alleged that the terms “sugar” or “dried cane syrup” should have been used on the products instead of “evaporated cane juice.”  Also, the Silk products were allegedly misbranded because “milk” is a substance that comes from lactating cows.  The first set of claims was dismissed because of res judicata: a valid prior class settlement in a Florida action alleging the same misbranding argument.

Defendants argued that the milk claims were also precluded because they only targeted products that contained evaporated cane juice, but that wasn’t true: the settlement barred claims related to use of the term evaporated cane juice, not all claims relating to products that contained evaporated cane juice.

However, the milk claims were preempted by the FDA’s standard of identity rules.  “A standard of identity is a requirement that determines what a food product must contain to be marketed under a certain name.”  The FDA requires a food to be identified by its common or usual name.  Though the FDA defines “milk,” the court found that this “pertains to what milk is, rather than what it is not, and makes no mention of non-dairy alternatives.”  (I don’t get this reasoning.  So if there’s no milk in the product at all, it can be called milk without regard to the FDA definition?)

Plaintiffs also noted FDA warning letters to soymilk makers that warned manufacturers that “soymilk” was misbranded because of use of the term milk.  But these brief statements were “far from controlling,” especially since the FDA “regularly uses the term soymilk in its public statements, suggesting that the agency has yet to arrive at a consistent interpretation … with respect to milk substitutes.”  Because the FDA had yet to mandate a name, the court went to the “common or usual” name requirement; that requires each class or subclass of food to have its own common or usual name that clearly states what it is in a way that distinguishes it from different foods.  That name can be established by common usage.

Here, the court found that “soymilk,” “almond milk,” and “coconut milk” accurately described the products:

As set forth in the regulations, these names clearly convey the basic nature and content of the beverages, while clearly distinguishing them from milk that is derived from dairy cows. Moreover, it is simply implausible that a reasonable consumer would mistake a product like soymilk or almond milk with dairy milk from a cow. The first words in the products’ names should be obvious enough to even the least discerning of consumers. And adopting Plaintiffs’ position might lead to more confusion, not less, especially with respect to other non-dairy alternatives such as goat milk or sheep milk. 

(Ed. note: non-dairy?)  As a result, the claims were preempted as attempting to impose standards not identical to FDA standards.

Also, the court independently found that plaintiffs’ claims flunked Iqbal/Twombly’s plausibility standard, for much the same reason already articulated: the use of “soy” and “almond” made it implausible that a reasonable consumer would be confused, “disregard the first words in the names, and assume that the beverages came from cows.… Under Plaintiffs’ logic, a reasonable consumer might also believe that veggie bacon contains pork, that flourless chocolate cake contains flour, or that e-books are made out of paper.”

Thursday, December 12, 2013

PTO/NTIA online transactions

Online Transactions

Moderator: Ann Chaitovitz, AttorneyAdvisor for Copyright, Office of Policy and International Affairs, USPTO

Comments generally agreed that online markets should be left to private markets. What role if any for the government.

Panelists:

Roy Kaufman, Copyright Clearance Center

We focus primarily on text, dragged by users into other media. Our markets tend to be corporate, publisher to publisher and academic.

Prof. Brandon Butler, American University, Washington College of Law

Library Copyright Alliance: 3 major library associations representing 100,000 libraries around the world.

Q: what do each of you see as key obstacles to developing robust, comprehensive online licensing environment, and can the gov’t help?

(I guess we’re not going to talk about how gov’t can help by maintaining a large space in which licensing is not required?)

Kaufman: key obstacles are that it’s very hard to develop robust databases, taxonomies for licensing.  What is a library?  Different rights, different media, different markets, different norms. Can be brought together, because within each market there are many solutions. Gov’t can encourage and foster collaboration across media and sectors.

Meredith Jacob, Creative Commons

Sheer volume of creative works is an obstacle. Many people who create don’t think about registration/licensing at all.  Hard to explain why you should do that (especially if your intent is not to strike it rich).  Creators’ intent varies. Almost everyone who is a “user” is also a creator as CC sees. Having a user/creator divide is a problem.

What gov’t can do: Gov’t can not reinforce systems that assume that all creators want the same thing.  Don’t necessarily want remuneration. Don’t assume that all transactions should be licensed.

John Lapham, Getty Images: it’s easier than ever to license. Don’t demonize the right to be properly compensated. The obstacle is that we publicly shame people for wanting to be compensated and say that being seen ought to be enough. What gov’t can do: keep up by trying to develop small claims process that recognizes digital economy/new needs. Likewise, not being overly in love with status quo is critical. DMCA was implemented when we were worried about survival of internet, but now we know that it’s possible to make a good living as a search engine.

Butler: not much to do for libraries in terms of facilitating licensing. Libraries are doing wherever they can and see it as appropriate. ARL members spend $1.4 billion on content, of which $850 million collectively is spent on licensing, or 60%. We’re licensing like crazy.  Not really seeing a lot of barriers to finding people willing to take our money. What should gov’t do?  Licensing terms are trumping copyright’s default rules—sign away first sale and fair use rights. Libraries get these huge portfolios of licenses, but huge thickets of rights they often aren’t qualified to or capable of parsing when it comes down to deciding what uses are ok. Gov’t could ensure that default user’s rights in copyright act can’t be licensed away, at least for libraries that need those rights for their basic jobs.

Q: talk about UK Copyright Hub: what can the US learn?

Kaufman: a way for users/creators coming out of UK copyright review. Improvements in licensing info were possible. Similar efforts in the EU.  US should be doing the same thing.

Q: how do libraries see the relationship between online licensing and fair use?

Butler: Fair use is extremely important to libraries, and licensing does not and should not undermine fair use, especially in transformative contexts. In theory, more and better licensing therefore shouldn’t threaten us, but the other side doesn’t see it that way.  CCC is suing some of our members based on a misunderstanding of fair use, where they assert that the existence of a license should force fair use to shrink. Another example: text and data mining—this is a transformative fair use, even when done for money.  But CCC says they’re working on a market for text/data mining, in Europe where there’s not as clear an exception. That’s a terrifying prospect. We don’t think anything that comes out of this process should be seen or portrayed as taking away from fair use, but it’s a fear we have.  (Bravo!)

Kaufman: misleading to say we’re suing your members, but off topic.  Someone said this morning licensing doesn’t substitute for fair use (that would be me).  He’s ok with that, but we should have efficient online mechanisms and should not shy away out of fear of effects on fair use.

Q: Getty recently reached a deal with Pinterest. Tell us about that arrangement.

Lapham: Don’t think gov’t can help with that.  Tech companies like Getty can work with partners in the private sector to make more and better content available. Pinterest: a healthy percentage of their content belonged to us. Rather than having a slapfight, focused on losing metadata/attribution. Instead, reattach attribution and provide royalties.  Opportunity for more arrangements like that so that creators can create and still be compensated for use on social media sites.

Q: reattach metadata; was there also a payment for past uses?

Lapham: the arrangement works by using our image database of 10s of millions of ours and other companies’ pictures; we can match that against the website. Using image recognition tech, we can find and reattached metadata, and charge fees per image per month.

Jacobs: Creative Commons are valuable because they don’t require renewal/maintenance of longterm engagement with the process. That is useful for creators who can set it and forget it.

Kaufman: Linked Content Coalition should be watched.  CC is also useful because it’s human and machine reasonable.  Digital Object Identifier used in science publishing. Orchid: a researcher ID, but can ID researchers as authors.  Each one has a purpose; a lot have open APIs.  First step: gather them all up and decide how they play with each other in this acronym soup.

Jacobs: public domain content and content created through federally funded research needs to be in these databases so you can find content that is public domain or open licensed or CC licensed so there’s no division there.

Lapham: Hargreaves report in UK—could be useful to work with gov’t in creating image registries/databases, whether orphan works or otherwise. Don’t wait for gov’t to do it. Instead, partnership where we can provide services to meet objectives for orphan works or otherwise.

Butler: on how not to do it—Jonathan Band and I wrote anarticle about issues with collecting societies around the world. See problems of corruption, transparency, inefficiency—learn from those mistakes and work for accountability.

RT: What can the US learn from Canadian legislative reform and Canadian universities’ responses to Access Copyright?

Butler: we can learn a lot.  Canada, Australia, and some other countries who have had comprehensive licensing systems are looking to us and whether they should be turning more for facilitating educational uses to fair use, or even to CCC on a piecemeal rate instead of paying statutory/blanket licenses.

Allan Adler, AAP: All this talk about prohibiting waivers of fair use or other rights—we don’t want gov’t to engage in paternalistic policies; people wouldn’t know where that would end. You can waive almost any right, including First Amendment right to speech if you work for the gov’t (uh, does not follow, but ok).  Better and easier to pay for license than relying on fair use. (Well, yeah, if the copyright owners get the gov’t to hand them that right; apparently only some kinds of rights definitions are paternalist.)  Biggest stories of year are implementation of ACA and NSA’s activities—these are related to gov’t databases, so aren’t we worried about that esp. when we are talking about tracking online transactions?

Lapham: allow for private sector solutions to some of the big issues.

Butler: shares some of those concerns, especially about NSA. Private collection of info is a great tool for the gov’t, so any time anyone has a big database that is a concern for us. Any effort to create central database of what people are reading should raise non-copyright concerns.

Kaufman: We have fair use, exceptions, limitations—but the whole point is to get users what they want the best way they can; sometimes that’s rights information. Don’t demonize us for doing that.

John Morris, Associate Administrator and Director of Internet Policy, NTIA

Importance of collaboration v. talking past one another.

Shira Perlmutter, Chief Policy Officer and Director for International Affairs, USPTO

Committed to finding sweet spot for copyright and internet policy. Need continued collaboration from all stakeholders.  There will be hard work ahead. We haven’t chosen easy issues. If positive tone of discussion today and willingness to engage constructively continue, I’m optimistic about progress.  Soon will announce further public outreach on these topics. Plan is for roundtables around the country in the coming months.