Sleeping Treaty: The Pan-American Trademark Convention
TTAB’s 2000 Belmont case: British-American Tobacco v. Philip Morris—cancelled an incontestable mark
on the ground that it violated the Pan-American Convention, which is
self-executing. That was a huge deal, and yet few people noticed or reacted to
it. 1929 regional convention dealing
with TMs and unfair competition, 10 countries ultimately ratified it. Provision was that owner of a mark protected
in one state who knows of use in another state shall have the right to oppose
use or registration on proof that the registrant had knowledge of the existence
and continuous use of the mark in any contracting states. Huge exception to
territoriality!
Since then, a few other cases, in which constructive
knowledge satisfied the Board. Held by SCt to be self-executing in a 1940
case. In a timeline of self-execution,
comes after Missouri v. Holland, before backlash to self-execution after WWII;
period during which we were comfortable with self-execution. Two circuit court
cases assert that claimants have to use section 44 of the Lanham Act as a
vehicle to assert rights. §44 previously
specifically named the Pan-American Convention as covered; now the language is
more general. Lanham Act drafter: he was concerned about Latin American friends
pointing the finger at us as hypocrites—want to see statutory evidence of
compliance. Unfair competition: clear
self-executing language for states without legislation.
Chapter on geographic indications: clear and broad—ever indication
that doesn’t actually correspond to the place of manufacture (etc.) shall be
considered deceptive.
Ladas, 1929: because we had the TMs, protection of foreign
marks was really protection of US nationals. Foreigners registered very few
marks of their own. US was looking for
market for its goods.
Initially Latin American conventions were meant to be
substitutes for Paris Convention, but direction changed after WWI. 1923 Convention, still in force between
Brazil and US, has similar provision.
Be careful what you wish for: US never really expected
Belmont case. Recent Free Trade
Agreements—we haven’t seen anything like these GI or unfair competition
provisions, nor have we seen them in the TPP (or even references to existing
rights!). But these rights are still being asserted by US companies in the know.
David Welkowitz: discussion is predicated on the
self-executing nature of the treaty. Is
there anything that prevents Congress, after a self-executing treaty is signed,
from deciding that it’s not self-executing/saying our statute is
all-encompassing?
A: would need a strong reason to think there was a conflict with
the Convention. There’s no evidence of
that, and §44 supports a complementarity reading. More disuse than repudiation. Nothing about GIs
in §44, where there’s another set of rights not covered at all by §44.
RT: Now that I’ve read the original Lanham Act legislative
history, I’m really interested in this rhetoric that we were or might be
creating an independent federal unfair competition cause of action through the
Lanham Act by referring to our international obligations. There was much debate about that, and it now
no longer makes any sense to modern TM lawyers because we’ve grown up assuming
that of course it wasn’t like that.
Similar to what the original understanding of incontestability and
defenses thereto might have been, now forgotten because confusion has eaten
everything. A history of forgetting? Compare to histories of discovering causes of
action?
Compare to discourse in copyright policymaking about how our
TRIPS etc. obligations mean we have to accept that we already have a right of
making available/can’t change copyright laws in any ways that favor users?
Irine Calboli: The US wants others to follow certain
rules. US thereby locks itself in,
preventing differences in our own laws because of US lobbies/USTR
captured. Businesses dictate the laws—claims
that we’re bound by int’l law are actually about policy laundering, because we
did it to ourselves.
Deborah Gerhardt, UNC School of Law, Kevin McGuire (UNC),
& Mark McKenna, Notre Dame
An Empirical Study of False Advertising Claims Under the
Lanham Act (presented by Gerhardt)
Not much empirical work has been done. What’s going on with prudential
standing? What’s going on with different
media when challenged? Other attributes
of ad that may affect result—if it’s comparative. What about the type of falsity?
Looked at opinions issued after 1988 revision became
effective. Looked for standing issue or
substantive false advertising question, about 1380 opinions (ultimate set will
be smaller). Started by coding cases that just deal with 1 ad or 1 analysis on
group of statements or ads. Bigger challenge: coding for multiple ad cases. 849 single-statement analyses.
Unsurpisingly, 2d Circuit is biggest, a lot in 9th,
3d Circuit also prominent. Number of
decisions increased over time. Natural
persons not a big driver. Spike in 2006
(why? Looking for theories).
Plaintiffs win 15% of the time over all decisions (not all
in dataset are final; win means win on some sort of dispositive procedural
posture, like D win on motion to dismiss; P win on motion to dismiss doesn’t
count as a win). 1990, P win rate was
40%, but dropped sharply and now hover 10-15% for past decade. 40% are decided at motion to dismiss
stage. Need to see how that compares to
other IP contexts. Only place where Ps
win more than Ds is permanent injunction stage.
Ps have standing most frequently when both parties’ products
are mentioned; mentioning either also increases standing finding, but not as
much. But mention of P’s product doesn’t
increase overall wins very much.
Text by itself, image by itself doesn’t seem to have
different win rate, but with both text and image there seems to be a higher P
win rate, up to 25%.
Many cases, courts don’t even consider falsity. Only about
42% do. When they do, they find falsity 40% of the time. Longer litigation = increased chance of P
win.
P win rate higher when statements found true but misleading
versus literally false—though this may change with additional, multiple
statement data.
Conclusions (preliminary): increasing, at greater rate since
2005. Prudential standing at issue in 18% of cases. At trial, Ps win 48-50% of time.
My Qs: is there any interaction between literal falsity and
media type? My confusion: Did you code for arguing literal and misleading in
the alternative, and which if any the judge accepted or rejected? The judge can
really change the course of the case by adopting one theory over the other.
Lemley: one possibility with spike in 2005 is that Westlaw
has become more inclusive—could look for some similar cause of action and see
if you see a similar spike.
A: we took a look at the Administrative Office data on
filings, and the spike wasn’t nearly as high, but of course that’s not directly
comparable.
Felix Wu: one story consistent with data is that parties are
only willing to litigate to SJ motions.
Either the D wins or SJ is denied, but P might be getting really good
settlement—Ps might be doing better than 15% because of unwillingness to go to
trial.
A: no matter how you count it, the importance of the motion
to dismiss stage is huge.
McKenna: plausible, but P success rate isn’t that high after
SJ. Vast majority of cases fall out
before that. If you have a 50% win rate
for going to trial, D isn’t necessarily that scared, except of the expense of
continuing the case.
Lunney: Qs of selection bias—low win rate suggests suit is
for some other reason than prevailing in litigation. In terms of literally false v. misleading:
that is counterintuitive, but clients who can’t afford the litigation pursue
literal falsity claim but can’t afford a consumer survey—so this may indicate
difference in Ps.
[RT: my thoughts here: this is why the falsity by necessary
implication finding is very interesting—relatively high win rate. Falsity by necessary implication is a tool
judges can use to move a case from “misleading” to “false” and help Ps avoid a
survey. It is very much a matter of judicial choice.]
A: can check that.
Eric Goldman: Could have spun finding as Ds win 50% of time.
Sounds less interesting. Middle ground
of undecideds—what are those? Are these
really P wins that will settle?
Measuring P wins in court is useful but incomplete because of other
battlegrounds/D changing ad and mooting the case.
A: Ps win 24% of the time when there’s a dispositive winner.
Q: re internet ads as affecting spike?
Michael Grynberg, DePaul University College of Law
Thick Marks Thin Marks
Mark might be strong but receive weak protection based on
nature of claim, such as nominative fair use.
Courts adjust thickness of protection to resolve cases involving
nontraditional source meanings of TMs. Urge for some courts to give thick
protection stems from difficulty understanding overlap in meanings TM might
embody. Tracks some accounts of property
rights as solution to info management problem, but also explains why property
can never really get the job done.
Courts calibrating thickness: Example—Maker’s Mark case from
6th Circuit, sued Cuervo for use of red wax seal on tequila. There was a ton of distinguishing context
making confusion extremely unlikely—different spirits; Cuervo brand was
premium; distinguishing labels; no evidence of confusion. Court waved that
away, speculating consumers might perceive some connection—less obvious harm
becomes easier to prove than traditional harm.
Louboutin: 2d Circuit finds mark protected, but not infringed. Disposed of case without giving us clean
doctrine.
Impulse to give thick protection is driven by fact that
courts have difficulty isolating meanings a TM might embody. Automotive Gold: makers of car accessories
using TMs as complementary good. Court
rejects functionality defense because it would be death knell for TM—consumer demand
is difficulty to “quarantine” from reputation function of marks.
We might see this move as a propertization of TMs in
response to info management problem, as per Henry Smith, who tries to justify
strong rights to exclude as part of a modular system. Tries to apply that to © and patent. In modular system, intense interactions
between modules are hidden and communications between modules are limited. In a car, the brake system operates
independently of car—can deal with brakes without having to deal with entire
car. If you are in a parking lot and you
see a car, you don’t need to know much about ownership status other than that
right to exclude means you shouldn’t mess with it; owner can attend to more
complex Qs of efficient use.
This might explain some of what judges are thinking, since
judges can’t sort out TMs meaning—what does association really mean? How
seriously do we take the dilution story? Judges mask those interactions behind
the property signal. They’re applying
source confusion language, but the moves are unsatisfying.
The other side of modularity is that there are times it
doesn’t work—stakes are too high; other interests implicated; interaction
between property right and potential users needs to be more nuanced. This is
the governance model. TM is necessarily marinated in this because standard of
delineation of property right is effect on consumers—3d parties—and their
interests are supposed to be paramount, along with competitors’ interests. Info
management is simultaneously appealing and impossible, leading to push-pull
between thick and thin protection.
Example: keyword cases.
9th Circuit began with ridiculously thick protections. Changed because courts got wise. But they’ll
always oscillate.
Calboli: why not say thin protection/thick protection, not
thin mark/thick mark? Sees no competitive
problem with Automotive Gold.
A: Maker’s Mark and Automotive Gold are both approval
cases. Could say latter is a lot closer
to actual sponsorship, but the 9th Circuit is equally broad in its
language. His point is what the 9th
Circuit does in the opinion, which is to say that it can’t separate the 2
functions (communicative and branding) of the mark.
Farley: would robust rule of aesthetic functionality deal
with many of your problems?
Wu: is your notion of thick or thin derived from the cases/describing
the cases, or prior to the cases?
Linford: judges seem uncomfortable with forfeitures
(aesthetic functionality)—though that creates a chicken/egg issue with the
concept of property.
Zahr Said, University of Washington School of Law
Interpretive Complexity in Copyright and Trademark:
Comparing Substantial Similarity and Likelihood of Confusion
Judges in copyright cases routinely make decisions about
where to locate their interpretive authority—a judge has to decide whether
interpretive authority rests primarily in the text, in the author, in the audience/reception/critic/expert,
or in judicial intuition. These are interpretive pressure points, and they’re a
feature of copyright rather than a bug.
But the choices aren’t transparent, though they’re necessary. Copyright realism: judges avoid choice, or
behave as if they’re compelled to decide one way. Usually outcome-driven analysis. Conclusion: judges might have too much
discretion over whether and how to make interpretive decisions, creating
confusion in copyright law.
Substantial similarity analysis: interpretive pressure
points consistently unacknowledged, but matter a great deal to outcomes. Broken in several places.
Compare to TM. Most
TM scholars love to hate likely confusion analysis. As with ©, TM requires
substantive comparison of two things—P’s prior existing thing and D’s allegedly
infringing thing. Must compare in order to allocate rights in those
things. Comparison must find
interpretive authority—how do we know that consumers might be meaningfully
confused? Actual confusion (audience);
risk of confusion high because owner says it (author); surveys/experts. TM asks how we know what we know about these
marks.
From ©’s perspective, even this broken test seems like an
improvement. Different elements of the Polaroid test appeal to audience
(strength of mark, actual confusion); text (similarity of marks); authorial
intention (D’s intent); experts (actual confusion, buyer sophistication);
judicial intuition (quality). Though
they aren’t consistently applied, judges at least have to say how they know
what they know.
Empirical scholarship suggests that these factors often don’t
control. But the existence of the factors allow us to diagnose what courts are
doing—departures from methodology are more visible because of the steps the
court is taking that it isn’t. We have a clearer version of the “ought.”
Lemley: everyone thinks the discipline they’re not in has
got to be more organized, and he wonders if this is going on here. Transparency
seems a good thing, but would you also get a substantive alteration in the way
we make decisions and would that be good?
Likely confusion makes a particular choice about audience (individual
consumer). You could make that choice in copyright, but a test that focused on
some of the things likely confusion does would get different, and probably
broader, results. Maybe what you want is some properly designed multifactor
test, but the real work is in designing the test. Does the analogy to confusion end up biasing
the test towards results that we won’t like (market substitution rather than
technical substitution—competition as harm).
McKenna: others criticize courts for rigidly marching
through factors. The factors are not the “ought.” The factors aren’t just used
to judge similarity, but some result.
In ©, similarity is itself infringement. That’s why people criticize the
factors—in certain kinds of cases the factors don’t have much to do with the
result. What’s the ultimate Q we want to
answer? (See: why nominative fair use
was developed.)
A: does feel it would be better for judges to have less
discretion.
McKenna: then TM is not your example.
A: rigidity is also transparency, though. Transparency without inflexibility?
Lydia Pallas Loren: substantial similarity is about “at what
point have you copied too much?” If you’re
asking if this is illicit, we have very different biases about what’s illicit,
incredibly context-dependent. Likes idea of transparency.
David Welkowitz, Whittier Law School
Fault Lines in Default Judgments
Defendant’s profits are available as measure of damages for
willful infringement (requirement differs by circuit); TM counterfeiting, if
willful—statutory damages multiply by a factor of 10. Indications that under §35(a), while it’s not
supposed to be penalty, willful infringement increases the likelihood of
enhanced damages. Willfulness therefore plays an important role; people who don’t
have resources to contest suit may not fully realize what they’re doing when
they default. Because damages aren’t a sum certain, default judgment means
damages must be proved up. But the evidence accepted is often lacking (e.g.,
willful because P sent a C&D and D didn’t stop). Sometimes courts find that
default means that we accept the well-pleaded allegations as true, and the
allegations are that D was willful. Some
play in that, but plausibility doesn’t seem to be a big barrier.
Alternative: accept allegations as true to the extent of
showing liability, not damages. TM claims don’t necessarily require willfulness
(cybersquatting aside), and intent is of course relevant to courts’
assessments. But realistically, willfulness isn’t required. In most cases,
should be part of damages, not readily accepted on complaint’s allegations. Found one court that realized this, but found
independent evidence of willfulness.
Many courts say that the fact of default makes you a willful
infringer (also said in copyright cases).
Why? Courts just think: good
people don’t default. Questionable.
Also: bankruptcy says that willful & malicious debts are not dischargeable
in bankruptcy. Usually a default
judgment isn’t issue preclusive, but some states don’t follow that rule.
McKenna: encourage you to think more broadly about
willfulness—not many litigated cases find bad faith in our false advertising
set, so it might not be a huge number. Does it show differences?
Loren: is there wiggle room after default and even if
willfulness is pled?
A: what happens in TM cases is that if the complaint pleads
willfulness, the tendency of courts is to accept that after default. He thinks this is a bad result.
Linford: you have an intuition that we’re catching lots of
people we shouldn’t be catching—aren’t these folks likely to be bad actors?
A: maybe.
Calboli: no need to prove willfulness in copyright/patent
for big damages—many Ps are international corporations and expect that
treatment. Property concept.
A: TM cases dealing with statutory damages tend to cite
copyright cases.
Said: Pam Samuelson & Tara Wheaton on statutory damages
in copyright—mere knowledge of infringement constitutes malice.
RT: many of these defaults are from immigrants. Sociological literature on counterfeit
sellers in the US: many come from places where legal system is corrupt; may
perceive police crackdowns on counterfeits as ordinary shakedowns; moral force
of default is different, at least in the absence of some educational attempt.
Farley: define what we mean by willfulness: a big deal. Does
default plus willfulness findings come up in other areas?
A: willfulness comes up a lot in TM, not sure about bigger
picture.
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