Thursday, June 09, 2016

TM roundtable, part 4

From last time: RT: I was thinking as Silbey was talking that you’re convincing me that TM should be a particular kind of anticopying regime (though, as w/patent, knowledge need not be required, at least for double identity).  And that would argue for a greater role for registration, which I think is a desirable outcome: it would be good to channel people into registration by making it hard for them to win when they haven’t registered; I wrote a whole article about that.
Mid-Point Discussants:  Robert Burrell: Using the patent monopoly period to develop secondary meaning.  Concern over this led UK to have rules.  B/c British TM law at the time didn’t extend to shapes, this concept was initially limited to words. Some Commonwealth countries still have similar provisions: when product produced under patent, you can rely on TM when you have secondary meaning; remain fully enforceable for up to 2 years after patent expired, but then name becomes free to use.  Reflects understanding that markets can correct and be corrected: you now have two years to rebrand your product. Australia case: Main Indus. interpreted the current provision to apply to shapes as well. A shape can describe a product.
Patents correct for market failures. But when we take TM seriously, they have a more fundamental effect in the establishment of a market.  Hard to imagine a market economy if I were free to sell sugar pills as Tylenol: more of a market-constituting effect than patents. If that’s right, it’s not obvious why we’d prioritize patent logic over TM logic. Yet most of us would immediately do that. B/c TM have become untethered from any rational basis whatsoever. When we think about shape marks/trade dress, they’re almost invariably limping TMs, with other things on the product we can use to ID source. We don’t think that Pepsi has joined Coke when Pepsi uses a similar bottle. Consumers can respond quite quickly when similar products emerge. Budweiser: there are two sources, and consumers in the UK rely on other indicators of source.  Traditional rules aren’t working well. Distinctiveness test doesn’t work well applied to shapes, as McKenna said.
Rights stacking: another way of thinking about problems from TM perspective is precisely that it’s almost never the case that a 3D TM works on its own.  Beebe/Fromer on running out of marks; Australian Productivity Comm’n doubts whether you should have more than one TM per product, which he thinks is extreme.  Design patents over every little part of an object: consider accretion of rights through one system and not just questions of channeling.
Michael Grynberg: Courts are concerned for reward; other schemes might ensure that those concerns aren’t being unmet. Why are courts so appreciative of utility patent’s ability to do that and not design patent?  Prominence of design patent is increasing, and this may sensitize judges to the possible force/power of design patent.
Disclaimer practice as a means of keeping fences; if you do that then you can copy.
Dinwoodie: what the courts in UK have said about limping marks would invalidate a lot of marks.  The Austl. Productivity Comm’n: the impetus for this idea is plain packaging, b/c one of the arguments that they made before the WTO is that you don’t need the logos b/c you still have the words. Might be driven not by TM concerns but by other concerns.
Lemley: Design patent seems a close, logical parallel to ©: trying to encourage creation of nonfunctional thing. We do have functionality in © in various doctrines; so why not look at that kinship.
Grynberg: The existence of design patent should give TM pause about protecting the same thing—it’s not kinship.
Lemley: then shouldn’t © also give the same pause?
Grynberg: Fewer cases involve that tension.  [Logo infringements?  I’m not sure how many noncounterfeiting real logo copying cases there are, as opposed to things like stylized initials that probably don’t cross the © threshold.  Of course, TM lawyers are now telling clients to use © claims to protect marks.]
Lemley: There are fewer cases where courts take seriously that © ought to have some preemptive power, except where the © has expired.
Dogan: Distinctiveness protection is different from exclusivity designed to encourage creation; so what is wrong with leveraging exclusivity for secondary meaning? That is looking only at the values that justified creating the rights in the first place, but other values inherent in the system as a whole call for limitations. The reason we provide protection is to incentivize for the ultimate benefit of the public; can’t lose sight of that value.
Kur: wants to use TM principles informed by principle of undistorted competition—the existence of a patent doesn’t mean there can’t be a TM; though she wants TM rights to be narrow. Patent shouldn’t have automatic effect in another regime; it tells a story about competitive needs, but it’s not an absolute argument. 
McKenna: for me that doesn’t answer important questions: which kinds of competition, under what circumstances? Can’t be derived from TM first principles. Some people are resistant to the idea that things in the patent universe have preemptive effect but are ok w/ expired utility patents having that effect. 
Kur: I don’t want to say that all the different types of IP are unrelated to each other.  The more there is a need for using the shape, the smaller is the scope you can grant a TM right: these are TM principles. They help you use utility patents to figure out what rights should be granted. TM is based on the assumption that TM is separate from what’s actually protected and doesn’t hinder competition & the sign is in infinite supply; the further you get from that, the more careful you have to be.  [I wonder to what extent this is really about harm done by the fact that we have an incredibly lax distinctiveness/distinctive character requirement.]
Bone: If TM did what it was supposed to be doing and patent did too, we wouldn’t have a problem. But we worry not just about whether TM is performing its functions but also the effect of the practicing bar using these theories.  A good TM law can be deployed in ways that interfere w/ policies in other areas, so we can’t silo them. Not as optimistic as Kur seems to be that getting it right in the silos will suffice.
Peter Karol: Note about timing: you see these claims when the patent expires b/c that’s when competitors enter the market!  Will also make 2018, when ©s begin to expire, an interesting moment.
Dogan: design patent surge as direct response to SCt scaling back trade dress protection at the end of the last century.  When those design patents begin to expire that will be another interesting moment: more cases of cumulation of rights than we’ve seen historically b/c of the greater volume. Empirical question: will they invest in developing secondary meaning in these designs?
McGeveran: Coordination isn’t a matter of mere tidiness; need an independent reason to police the boundary. Nothing wrong w/pursuing alternative legal theories of recovery; it’s actually sometimes good. But the law does create boundary policing mechanisms when a problem results from it, e.g., the economic loss doctrine. Can’t end run around contracts by using tort when that undermines the actual bargain.  Then there are exceptions to the economic loss doctrine. Based not on borders for their own sake but for the policy reasons we have those boxes/want people to stay within them.  If someone patented a real, Back to the Future hoverboard, and they happen to shape it an arbitrary way, like a purple hexagon, he’s comfortable w/saying “flying goes into the public domain, but not shaping it like a purple hexagon.” Some of the commentary does not think carefully enough about what an expired utility patent is evidence of.  [This point is very clear in Dinwoodie & Janis’ TM casebook.]
McKenna: if you can’t make an end run when you have an expired patent, it seems that you shouldn’t be able to make an end run by declining to seek a patent either.
Silbey: patent as evidence that it really did fit within that regime.
Lemley: we do feel differently about McKenna’s point b/c of vestigial instinct that you got to choose b/t regimes. 
Ornamentality might justify further attention: if it’s not attractive, then it shouldn’t be part of a design patent.
Silbey: if you shape the utility patent to get around prior art to include the hexagon in the hoverboard, it seems like you’re taking advantage of the patent system. But not sure what expired design patent is evidence of that’s distinct from trade dress. Does it have a quid pro quo the way we think of utility patents have?
Dinwoodie: not much of a quid, because by selling the thing you’re disclosing its visual experience.
Yen: Smells like election of remedies.  You got an extra leg up in establishing secondary meaning, that others don’t get.
Bone: but if the system works, so what? If we think TM is double dipping, then sure, but if it’s dealing w/harmful consumer confusion, we might say that developing secondary meaning and communicating w/consumers is a good thing.  A question more of deployment than of doctrine.
Yen: but to the extent the thing we have a design patent for has some “useful” function, there should be a potential limit on what TM would allow, here aesthetic, right?
Dogan: if I go to market w/a chair, others can copy it before I have secondary meaning—but if I have a design patent I can keep that from happening. Properly designed aesthetic functionality test could figure out if people are demanding the chair b/c of its aesthetic properties v. its popularity, but the test is not likely to work well unless the expired design patent is evidence of aesthetic functionality.
Dinwoodie: Children’s chair case—the EU has started to develop a series of factors to figure out whether something is iconic—taxicab case, J. Arnold discusses the role of designs.  Dogan is asking for something close to what they’re doing.
McKenna: meaningful ornamentality requirement could allow us to say that presence of design patent is evidence of non source related aesthetic value/function just as presence of utility patent is evidence of non source related utilitarian functionality.

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