Friday, February 06, 2015

WIPIP session 1: Trademark

WIPIP Session 1: TM
Deborah Gerhardt (& Jon McClanahan), Colors
20 years of Qualitex: who is registering color? How do marketing folks view color? People remember color images more accurately/longer than B&W; color cues amplify legibility and familiarity; send signals about brand personality—can alter target audiences by changing color; prompts stronger emotional responses than words and images; people make up their minds in 90 second, and 62% or more of that is based on color.
What does that mean for TM?  Color can express a lot other than source. Personality, emotion:

Various registrations for color—universities, Tiffany’s, Zagat’s cover.  Post-Qualitex: 143 Color only applications, 0.0%; 2071 for design and color, .06%; millions of registrations that are not color-based.  Number of colors claim: mostly just a single color, though a few claim up to ten.  Red/pink & blue are the most popular color combinations, followed by brown and white, then gray/silver & black, then violet/purple & green.  Color marks are registering at a much lower rate than design only, design & color, and neither.  38.1% color only marks go to publication, 23.0% to registration. Some design & color marks are really what we think of as color only, such as Tiffany’s blue for catalog covers—the design is the shape of the cover.  Design and color: 46.0% published, 59.7% registered; overall success rate for design only or “neither” is about 74%.
General trends: increase in applications, registrations; very few end up on supplemental register and that’s not increasing.  Marks with design and color (e.g., Target red target)—a lot more marks on the supplemental register, but publication and registration lines are really close together—fewer ITUs here.  Marks claiming color but not design, but there are so few (they are going to recode to move some design + color like the Tiffany one into the color category).  Color only=covers an entire object, or an entire piece of an object—the Louboutin sole is color only, whereas a stripe on a water bottle is not color only.
Marks claming one color by class of goods—neat slide with bubbles representing # of color marks by color.  Registered across all sorts of classes.
Glynn Lunney: shades?  Color depletion in Qualitex—how many colors does the PTO think there are?
A: people tend to register a particular Pantone color.  But how it’s coded: PTO codes 12 colors including clear, white, and black.  (Lunney suggests an inherent masculine bias to this determination.)
Lisa Ramsey: what evidence are examiners accepting as evidence of secondary meaning?  If women like purple, then why should any competitor be denied the color purple?
A: don’t know.  Red is protected for scaffolding, who knew?
Jeremy Sheff: a little dubious of the low numbers here.  It’s difficult to determine going by hand.  But just looking at applications w/colored drawing as part of the file, there’s over 180,000. That could be a word mark in a particular color, but that would still be relevant for color as stimulant for demand. Are you excluding that from your scope?
A: they aren’t necessarily claiming color.
Sheff: but it’s part of the brand.  May want to deal with that, unless you’re just interested in competitive issues in claming color per se.
A: Target has the red target and the outline registered separately, the second for broader protection.
Sheff: ultimately, are you issued in competitive issues/foreclosing color for others, or in the use for branding?
RT: Any ITUs? Examine Specsavers.  Registration/infringement.
A: Wants to understand what’s going on in the areas where similar colors are registered for the same class of goods.  Is there a color depletion issue? Maybe Jacobson was right that you didn’t need color only because color + design is available.  (That would have led to the same result in Qualitex, right?)   Vast majority of filers appear to be very experienced filers.
Lunney: are you going to break down reasons for rejection?
A: Definitely will look at abandonment data. 80% of color applications have Office Actions; 60% conversion rate, when it’s usually 30%--a lot of them are facing these barriers.
Q: year to year trends? Pantone color of the year—do you see it in the PTO?
A: another fascinating Q to look at.  Has also heard of different cultural preferences for color, but interestingly comparing color impressions 30 years ago to now there’s less of that—cross-cultural perception of yellow as happy.
Jeanne Fromer (& Barton Beebe), The Closing of the Linguistic Frontier in Trademark Law
[early in project: more coming soon]
Lisa Ramsey, Trademarking Everything?
Are we TMing too many things? How to convince brands to care about the issue/care about competition? Her focus: protectable subject matter.  Need legislative solution, likely international, though domestic reforms are also important.
Should we protect anything that’s capable of bearing meaning, as current doctrine allows: Taylor Swift’s “This Sick Beat” applications for everything from nail polish toT-shirts.  TM application for “I Can’t Breathe” for clothing.  Specimen carefully uses that term on the tag, but clearly interested in enforcing against people who are using it on the front of a shirt, despite PTO rule against registering ornamental uses.  People then do use the term on the tags, but threaten ornamental uses, often successfully.  Or Delicious for shoes, and not used ornamentally, but then they go after Victoria’s Secret which uses the word on a T-shirt, and VS can’t win on summary judgment.  VS too has used marks on the front of T-shirts, like “Very Sexy,” which made it hard for them to argue no use as mark. 
Etsy store for tiny gold tags on necklaces; taken down because someone else has a registration for Tiny Tags for tiny tags on necklaces (disclaims right to “Tags”).  This is on the Supplemental Register, but the recipient took it down.  Controls results for Google searches.  Facebook went to trial on “Timeline”—FB can at least afford to litigate.  Oprah couldn’t get summary judgment on “Own Your Power.”  Can we get brands to care about these abuses?  E.g., “How” registration leading to lawsuit against Chobani for “How Matters.”  These are descriptive uses.  Need to shift perception of what the point is: whether people should own words in goods/services.  “Candy Crush Saga,” etc.
Acquired distinctiveness is not a big barrier. Declaration from company about use of mark. Examiner might search 3d-party use.  But what about future users of descriptive terms/colors/designs.  Rigorous examination as in patent?  Maybe we shouldn’t have protection in the first place.  Likewise w/incontestability.  No independent examination.  Then you can’t challenge it based on lack of distinctiveness.  Can’t do lack of confusion/descriptive fair use on motion to dismiss/often even sj. 
Slogans too, highly distinctive.  Wells Fargo claims TM rights in “Envelope Free” for ATMs.  Apple trying to TM store designs.  Bellaband: court says they could prove protectable trade dress in website design.  Not like copyright where actual copying is required.
Shaming sanctions for TM bullies? Sometimes people withdraw applications or claims against competitors: Ice Bucket challenge, IPA lawsuit.  Also: require more in the way of combination; require visual perceptibility.  Look to patent law §101 for model for subject matter exclusions. Requires us to consider international reform. Other measures to balance competition/free speech—functionality isn’t doing the job.
David Welkowitz: how do you get around free riders? Even if brands get on board, they won’t want to give up their ability to get a TM.
A: That’s why we need legislative reform. No TM for use on the front of a T-shirt; no single colors.
Lunney: most of the expansion has come from the courts—symbol was added to the bill specifically to exclude trade dress, yet 40 years later Breyer turns around and says symbol means “anything at all.” May be hard to get legislative action. Problem is that you get sympathetic Ps and the court stretches the law, then generate a rule that applies even to ordinary cases. They don’t think of the case as a regulatory system but it does become such a system.  Lots of businesses in the real world have very small differences in their names; they can register a corporate name w/a small difference in the state corporate registry.
A: completely agree that courts are the problem. That’s why we need subject matter reform, because once you get a right it gets stretched.
U. Shen Goh, Branding Linguistics: What do Coca-Cola and Chinese Bakeries Have in Common?
Coca-Cola’s treatment in Canada v. US. 1975, started filing applications for Chinese language marks in Canada, but not US. Canada hasn’t been very friendly—decided that Pepsi-Cola was not confusing w/Coca-Cola.  Also Canada had no comparable American doctrine of foreign interests.  But in 1992, when renewal came due, they abandoned.  Even though Canada had just rejected the American doctrine of foreign equivalents—another case decided there was no confusion between 2 Chinese bakeries (Vancouver/Toronto)—Chinese word was the same but English translation was different; average Canadian consumer doesn’t understand Chinese and the audience is the relevant public at large.  So Coca-Cola abandoned.  Since then the case law changed and found that the average consumer is the target consumer/actual consumers of goods/services.  US does have a bit of shakiness in the doctrine, but does have foreign equivalents.
Currently we classify all foreign languages that don’t use alphabets or numbers as design marks in our databases. This is wrong.  Word marks receive more protection than design marks, and many marks not using Latin/Roman characters have multiple presentations/translations.  Simplified Chinese may not look the same to English-only speakers, but it’s similar to capital letters v. lower case in English.  Fluent = know it’s the same. Western databases should transcribe foreign language marks according to their official phonetic system.
Western system depends on letters—type in Coca-Cola, get matches. But if there’s no letter/alphabet, we traditionally treat it as design mark. Phonetic system: allows filing alphabetically and numerically. Improve efficiency of database; impossible to search foreign language marks alphabetically and you have to hire a firm to do a design search.  Would remove incongruity w/case law, which recognizes foreign language marks as word marks.
Solves inconsistency w/int’l trade: MFN/national treatment principles.  Mark in China is a word mark; would be a design mark in the US.
Judicial treatment: both Canada/US require that the foreign language mark be understood by average Canadian consumer/ordinary American purchaser. This evidence changes constantly depending on immigration, int’l trade, brand extension, and cross-branding. Not just a problem for large corporations.  We should assess foreign marks in the same manner as English language marks: assume a fluent consumer.  We treat “aubergine” as having a meaning; don’t question how high educational level of consumer is. Should always assess for distinctiveness. A trader should not be able to do in a foreign language what it couldn’t do in English.
Foreign marks shouldn’t be translated when assessing for confusion w/marks in the same language.  A fluent consumer doesn’t need to translate; the monolingual judge does and wrongly assumes that consumers do the same.  Do need translation for meaning, but that’s just practical.
Foreign language marks shouldn’t be translated when assessing for confusion w/English transliteration English language marks can’t expand into claims for homonyms or homophones. Traders who choose to spell an English mark are stuck with that. The same rationale should apply to a trader who decides to use a foreign language mark, and not use any/all of its possible transliterations. One Cantonese transliteration could be Cheung Kong, Chiong Kung, Chang Jiang, or more depending on one’s dialect.  If we do it for foreign language we should do it for English.
Foreign language marks shouldn’t be translated for assessing confusion w/ an English translation. English language marks can’t expand to claims for synonyms, etc.
Hana Bank: Korean language, want to transfer into English “Hana Bank.”  But there are multiple translations: Hana means one: One Bank, United Bank, Whole Bank: do they get to claim them all? Not fair to other traders.
Christine Haight Farley: you’re arguing not just for changed approaches but changed standards? It would be easier w/phonetic searching systems for parties to decide that something is too close in pronunciation, but you seem to advocate at the end for not having to use that.  Chinese companies: script versions of TMs, but Chinese consumers might prefer a different word—Michael Jordan becoming “flying man.”
A: you can use transliteration or translation. In China, many companies discover they’ve been usurped. Their Chinese TM may not be as popular as the TM that became colloquially popular. Coca-Cola ran a contest and picked the best—good brand management. 
Lemley: struck by statement about not extending protection to synonyms. Correct to say you wouldn’t get a registration, but as a practical matter you get control over them: both in registration where PTO will reject and in practice where likely confusion will control. Why treat foreign translations any differently? If people think of it the same way, why allow anyone else to overlap use?
A: There is a Coca-Cola case that allowed them to control Koke.  But that’s more for well-known/popular TMs. 
RT: disagree—Lollipops and Jellybeans for roller rinks held to be confusing, because not well known and inherently distinctive. But I love the rest of the proposals.
Abraham Bell (& Ted Sichelman & Gideon Parchomovsky), Trademarks as Club Goods
Why do people wear T-shirts advertising their affiliation w/brands? Not a new Q, but a new answer.  People are acquiring not any information about the actual physical product. Economic search cost explanation doesn’t give us a very good answer, b/c only the brand and not the product is of concern.  TM in theory incentivizes production of goods w/non-observable qualities, but the value of the brand is fully observable.
TMs as expressive goods? Express fealty to NY Yankees, Nike, etc.  Brands serve as self-expressive private goods and linguistic public goods: counsels in favor of weaker protection to foster expression.
We think TM has one function of creating clubs/signifying membership. Not simply self-expression but membership/identification w/ a network of others associating w/the mark. Our theory separates club aspects from expressive aspect of the mark.  Deven Desai talks about bits of this but does not delineate badges of loyalty from other expressive aspects.  TM is a way of telling you something about the individual bearing the TM: an entry ticket into a club.
Vital that TM owner is the one that owns the right to exclude.  Creating a membership group.  Club goods are intermediate b/t public and private. Semi-enclose things that would otherwise have risk of being public goods/private production of goods that could otherwise only be produced collectively.
Ted wears a Harvard T-shirt. Ted is getting branded with Harvard (like ISO standard). Harvard is getting branded w/Ted (other consumers know that Harvard is the kind of school that draws Ted, or at least Ted identifies w/). The value of the T-shirt goes up and down w/Harvard’s activities. Harvard’s control over production and distribution affects the value of the club membership.  So it makes sense for control over entry to be in Harvard’s hands.  If every single consumer controls the TM, it loses the ability to cabin this club.  [RT: But Harvard will sell anyone a T-shirt.  It does not police the boundaries of the club and it can’t police the used market nor should it be able to do so. Compare Republican and Democratic (or “Democrat”) Party.  They can’t protect the “club” aspect and seem to be robust.]
This gets us to exactly the opposite of the expressive theory. [But why would this lead to any right to control the image of the club?  Can’t we have the Coca-Cola Kid?] Not simply about T-shirts. Purchase and use of many products have a club goods aspect separate from self-expression. Drinking Coke, driving a Mercedes Benz, riding a Harley Davidson, using an iPhone, eating and McDonald’s.  Commercials for these brands often emphasize club aspects: e.g., Coca-Cola’s “I’d Like to Teach the World to Sing.” Create a membership group and police its boundaries.
What do we get this?  Facilitate dissemination of goods that can only come in these kinds of networks; large potential increases in social welfare. TM already does this but we haven’t been paying attention.  Best way of understanding dilution is being about this.  [Except then there shouldn’t be expressive exceptions.] Dilution = spreading club benefits outside the club.
Do we have some normative suggestions?  Exclusivity is important. Optimal spread of the good if costless is not infinite. Some point at which it’s too widely spread.  [How is “I’d like to buy the world a Coke” in any way limited?]
Lunney: complete misuse of the theory of club goods.  (1) getting funding to afford public good, (2) setting price that doesn’t create deadweight losses.  Treadmill in fitness center: could be public if there are few members; congestion = need to set price/fund creation. You haven’t shown me a congestion externality or using the congestion to set the price. This is just “if value, then right.”
A: the congestion is the exclusivity. If everyone does it. 
Lunney: McDonald’s would lose money if everyone ate there?
A: Yes.  Set price to control access. There’s a reason companies like Members Only name it Members Only. Even McD and Coke exclusivity is working to provide profit. [Citation needed.]
Gerhardt: Make assumption that TM owners create brand value and channel it down.
A: no we don’t.
Gerhardt: consumers invest in creating brand, should get return at least in form of being able to use for information.
A: the TM owner gets to police the boundaries even if it doesn’t create value.
Gerhardt: community rejected New Coke.  Good brands let brand story change in response.
A: but mark owners police who can enter the community.
Gerhardt: should we shut down Pinterest? TM owner doesn't like being pinned by the kind of person who pins images of its products.
A: there are other interests—not saying shut down Pinterest. This is an important interest on the other side.

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