Thursday, June 09, 2016

TM Scholars' Roundtable, part one

Trademark Scholars’ Roundtable, Boston University
Session 1:  Product Design Protection and Trademark First Principles
Given what we know about the costs and benefits of using trademark/unfair competition law to protect product design, is the whole enterprise worth the candle?  Why, or why not?  How does design protection fit with the competing normative conceptions of trademark law?  What does each of these models suggest about appropriate limits (thinking strictly about “intrinsic” – i.e., trademark-specific – concerns)?  In other words, what would trademark law’s own intrinsic goals tell us about whether to protect product design, and if so, with what exclusions or limitations?  Is functionality – either TrafFix-type or aesthetic – up to the task?  Given that courts treat functionality as a factual question, is there any viable strategy or policy proposal to resolve functionality issues earlier in litigation?  What is the role of error costs in assessing trade dress protection for product design?  If we are concerned about negative effects, what particular effects do we find most worrisome?  Can we think of case studies that offer compelling demonstrations of these costs, or empirical work that might help?
Introduction:  Bob Bone: Design protection/functionality as internal constraint on TM, or external? Thinks about this as a tension that needs balance: pro-TM protection policies v. preserving robust competition in product market and preserving patent/©’s public domain, as well as 1A issues.  Can you characterize TM policies themselves as providing those limits?  What level of generality should you use?  If you say TM is for promoting competition, then functionality would be internal.  But doesn’t give you traction on concrete/specific questions of defining functionality, b/c we lack metric for resolving two kinds of competition.  Same with the idea of unfair competition: need to sort within that category. 
Another approach: how often does product design serve as a true source identifier?  Really using design as an indicator of hidden attributes, not a design as indicator that it has a design I like—qualities that aren’t evident on inspection. That’s what real TM meaning is: a shortcut.  Not clear that people often approach design in that way.  If they merely say “X design indicates Y source and I like X design,” they are unlikely to care (w/exception of status goods, which may require different analysis).  [This may provide another way to explain why the Sleptone cases should be defense victories.  There are no hidden qualities when you claim that the trade dress is the manner of presentation of music files.]
Dynamism: if you don’t protect designs under TM, producers will switch to word marks and consumers will learn to rely on the word marks; confusion might exist in the transition but it would not likely persist. Might be worth bearing that transition cost.
Determining and balancing countervailing policies: I don’t think there’s a right to copy, but there is a public domain policy. It’s not enough to say public domain is good; need to know why.  Idea of channeling collapses into other policy goals, which usually collapse into robust competition.
In TM law, we tend to deal with these Qs in an all or nothing way.  If functional, no protection; if generic, not protectable except for against passing off/other acts.  Problem that functionality addresses also exists in © and maybe in patent; the linkage problem. You have something that would ordinarily be protected, but used in a context you want to promote.  Linkage problem when Y (context) needs X (usually protectable).  That’s merger in ©.  We also use thin ©/adjust the infringement standard; we also have fair use; remedies such as compulsory licensing.  Odd to require all or nothing.
Word marks can also be functional; not useful to deal with this by asking whether a symbol is functional for P or D.  Ask what are the policy reasons why we want this activity to happen.  [It seems to me this is contrary to Bone’s usually justified focus on administrative costs.] 
Functionality has lots of applications where people just want the surface appearance of the mark—the features have consumption value for the product (can be word marks, or design). If so, then this isn’t just about product design.
Discussant:  Annette Kur: Continental European background, while you are embedded in US doctrines. But we are here talking about fundamentals.  Is the game worth the candle?  Maybe not—the EU has extremely generous design protection and unfair competition laws—we could do without formal shape marks protection. What we need is some sort of protection against imitation of shapes when they actually give a message about commercial origin and that’s misused so consumers are misled. That’s about info transmission, necessary for competition, but no formal TM protection required.

But we have it, so what do we do with it.  If appearance should be free to public after a certain time, then TM protection for shapes prevents that.  Functionality is supposed to help us out of that dilemma.  Bone is right to think that functionality is not a separate clear cut doctrine; it’s not an aim in itself but meant to maintain competition goals. Can go beyond shapes.  In EU, until recently functionality was just shapes; now opened up to other characteristics such as color.
If an item serves a true TM function, it should be protected even if there was design protection first.  Or, if TM protection post-design protection doesn’t serve competition, then no sign of this type should be protected whether or not it received design protection before. It’s not the overlap that matters.  Competitive interests need to be looked at throughout the life of the TM/design.
Autodesk case: Court of Justice said that once a mark is registered, you can no longer invoke competition as a reason to influence decisions on likely confusion—only look at consumer reactions (or what the court thinks consumers think) regardless of the impact of protecting the mark.  Bad idea!
RT on Bone: It seems to me this idea of going back to fundamental policies for each determination is contrary to Bone’s usually justified focus on administrative costs.  Rules are much, much cheaper and when you talk about the costs and deterrent effects of threatened litigation in TM in particular, that seems important.  Blinded Veterans, Belmora—these increase the costs of knowing what you can do.
Mark Lemley:  Intermediate approaches in general may not be a bad idea, but worries that we’re not very good with “you’re in the door, but only a little bit, so you get very narrow rights.” Once we say you’re in the door, you get almost carte blanche when it comes to infringement in practice. Structured ways of balancing help. Samara: doesn’t disallow protection forever, but requires a certain threshold to be crossed.
Once you’re in the door, we should think about limiting doctrines other than gatekeeping. Bone said: law’s not very good at balancing two kinds of competition. But we do that in other circumstances, such as antitrust/IP intersection. Actavis, 2013, takes approach not of avoiding overlap but that you have to have a robust conversation b/t these two visions of competition to give these their due.
Graeme Dinwoodie: Limits from source identification/distinctiveness test is useful idea.  European idea: Nestle case, now on appeal to Court of Appeal: it’s not enough that consumers recognize it, they have to rely on it.  Thinks English courts are wrong about that, but it’s the passing off test for decades. That might be normatively correct, but we’ll see what the court of appeal does.
Using policy levers: yes, we should think about that—defenses, filters, remedies, thin marks?  Wallace in the 2d Cir.; Louboutin to some extent endorses that approach of thin marks. Europe has a problem w/that b/c we haven’t recognized that something might have just gotten over the line of protectability when we later analyze its scope.   
In Europe we don’t need as much shape protection b/c design laws are so expansive.  Also expansive unfair competition laws; US  might not have either of those.
Why worry about overlaps/channeling?  The reality is that everything’s a potential design, including words.  The instinct of separateness comes from the early 20th c. when the different regimes were more confined. 
The idea that we have clarity from the functionality rules is perhaps overstated.  Though if you think that no product design will survive, maybe that would be clear; but he wouldn’t say that functionality has had rule-like characteristics.  [I meant more what happened after the functionality determination had been made, but fair point!]
Mark McKenna: If you have high functionality threshold, and high secondary meaning standard, and want to carefully confine scope, and we think that very few marks will pass through, isn’t that an extraordinary cost to the system, especially given that many such marks will not, as Bone says, signal hidden features—isn’t that just not worth it?  Why not just do unfair competition/labeling and packaging are the only possible remedies and prospects of attack.  © has a variety of doctrines and doesn’t do them well, so doesn’t think we should borrow from that.
Functionality applied to words gets detached from our usual considerations; could be thought to also be descriptiveness/genericity/comparative advertising; should we just have a bucket entitled “competitive needs”? Thinks not because there are different concerns for different categories.
Mike Grynberg: Plenty of examples where courts see design as performing TM function in nebulous sense and give it thick protection—Maker’s Mark case is the same year as Louboutin; it was clear that there was not going to be confusion b/t a bottle of Jose Cuervo tequila and a bottle of Maker’s Mark, but the court decided to focus not on source confusion but on affiliation.  Doctrinal tools are being deployed to exclude all the distinguishing context b/t uses.
Bone: Implementation of optimal balance is a different Q; he’s all for rules.  Marks can be thin in a variety of ways—Louboutin is one way. You can also make a thin mark with a higher confusion requirement or a harm requirement. [Double identity as thin but strong?]  Why have so many buckets—maybe the old story about the difference b/t technical TM infringement and unfair competition is some explanation; genericity had to develop in technical TM context, and functionality in unfair competition; only now have they united in the underlying cause of action and we see they serve a common function.
Kur: Would like to see study about costs of protecting different elements of an article.  All rights are monitored, litigated, searched separately—this must be generating a lot of costs w/o market justification.
Lemley: we could imagine a descriptive fair use concept: I’m using this shape descriptively, which is sensible b/c we’ve already said that designs are descriptive by definition.
Stacey Dogan: we don’t call it market definition in TM, but we talk about need for access to product features to compete in a market. We are sympathetic as a group of the notion for broad access; courts have opposite instinct, as long as there is some infection of the brand value in what the defendant is trying to copy, they’re unsympathetic.  You have to demonstrate as D that the thing you’re trying to copy is completely unrelated to reputation of TM holder to show competitive need, at least in aesthetic functionality.  Would like to talk about level of generality in market definition. Could we get some traction w/courts there?
Dinwoodie: if we were willing to think about more flexibility in defenses and remedies, maybe we’d worry less about intake issues.  Devices that allow you to address the problem: Europe has both descriptive mark and indistinctive mark as concepts, and we should allow descriptive and indistinctive fair uses.  “Descriptive” works for word marks, and may work for some other marks, but indistinctiveness captures the broader concept.  It’s also a TM use type issue.  Indistinctiveness is “I’m using this, but not in a way that indicates source.”  [Around the table there is some amusement at this embrace of TM use.]
Lionel Bently: indistinctiveness needs to be in accordance with good industrial practice; we don’t really know its scope. The court has said that if there’s dilution, free riding, or confusion, then you can’t use it.  [Like descriptive fair use in the US.]  Everything you prove to show infringement undermines the defense.
Kur: You’re wrong.
RT: Louboutin as thinness or Louboutin as failure of ability to analyze b/c of inability to talk about non-confusion-based values?  I see it as more like the Wittgenstein moment of US TM law: “Whereof one cannot speak, thereof one must be silent.”  Louboutin just can’t coexist w/a consumer confusion analysis: There has to be something there about TM as instead a business activity/competition regulator; thin mark would require us to leave behind how consumers perceive the mark once recognized as valid by not even asking whether they’re confused, which is exactly what Louboutin does. 
Even if you did what Bone suggested and imposed a higher confusion requirement you’d be derogating from what courts have decided “real” consumer confusion is—if they’re ordinarily going to count affiliation confusion or endorsement confusion, then they need to have a reason not to do so, which has to be something about market structure.  And if the problem is w/ the affiliation/endorsement confusion allowed for others, then all marks should be thin in this way!  This leads me to think of double identity as a kind of thinness in scope, but also thickness in terms of rights.  The harm requirement for uses outside double identity then would reverse that: broad scope in theory, but thin in terms of which uses are actually covered when you get to the end of the inquiry.
McKenna: That’s a reinstatement of TM infringement v. unfair competition.  [Yeah, I’m finally getting making my peace with that, though I still want some channeling/preemptive effect from patent and other regimes even when it comes to unfair competition, at least to the extent that Sears/Compco imposed.] Retail-level competitive harm analysis, rather than categorical rules, create effects as Dogan described—it’s hard for courts to define relevant markets b/c they don’t get full info and lack a conceptual frame.  [Dogan: think about how to convince courts to move to that global level.]  One thing courts do seem to get is interference w/ other rights regimes. That’s why they latched on to stronger channeling in utility area: patent law makes a decision about whether to protect a thing or not, and that has competition norms baked in; that decision is not TM’s to undo. Easier for courts to get; doesn’t require them to do the work of defining the relevant market.
Lemley: easy for an expired patent.
McKenna: or for Jay Franco—if it has useful features and you can’t/haven’t made it through the gates, too bad for you.
Bone: That’s not enough; what if there’s good reason to protect this thing from TM perspective?  The patent system hasn’t always made a decision.
Dogan: but if it’s w/in the subject matter of patent, then we can infer it’s not protected.  Unless you meet standard for patentability, competition is the norm.
Bone: not sure patent law is helpful in defining markets.
Dogan: but courts think the work has been done for them, descriptively.
McGeveran: will also endorse this normatively.  How influential is the gravitational pull of some other regime? Utility patent is one, but maybe design patent increasingly will/should be.  Once you start to cast things as 1A matters, the courts also find a gravitational pull.  Descriptively: when you ID other areas of law with big footprints, courts tend to defer more. Would like to do that more with design patent and 1A. Question: can you present this competitive need consideration in a way w/the same gravitational pull; not sure there’s as tidy a place you can point.
Robert Burrell: [Something I’m not sure I completely got, but was very interesting: the idea being that direct copies were likely to compete solely on price, but partial copies would have at least some R&D costs associated w/them, so the price competition if extant wouldn’t be solely based on free riding.]
Dogan: Thinks that both kinds of copying should be allowed, but descriptively courts don’t like the pure copying.
Fred Yen: When we say trademark meaning, do we care about intent of P or D?  In Traffix, was the spring chosen b/c it worked or b/c the P thought it was jazzy looking/would eventually become a distinguishing feature?  Or consumers’ POV?  Hooks into what we think we’re doing w/TM law—courts are very interested in investments made by P; but other parts of TM are about protecting how consumers operate in the marketplace.  When you ask about perspective, if we are about investment protection, then P’s perspective matters a lot—incentive function.  But present in a lot of these cases is the sense that we use consumer POV as a reason to give value to P even if there was no investment at all and they put it there for non-trademarky reason; windfall.
Lemley: The D’s perspective: matters a great deal whether this is a defense or part of the cause of action.  Even if TM owner treated it as TM and consumers do, in some circumstances if the use wasn’t intended to take adv. of the presence of competition, then we protect it—descriptive fair use.
McGeveran: so too w/functionality: we judge from the D’s perspective.
Dinwoodie: w/in the Continental tradition there’s unfair competition (consumer protection) and slavish imitation (which is about ethical norms).  Why, other than the Supremacy Clause, is it patent that establishes the competitive baseline? Why should patent control TM, and not the other way around?  And why isn’t © at least as controlling?  Lots of stuff is ©able.  Would make lots of stuff unTMable.  [Great Q.  Maybe something about the difference between communicating and doing other things in the world?  TM and © are both communicative, and on that logic so too design patent might be.]
Alexandra Roberts: These defendants are often copying for the sake of copying, not b/c we want it for consumers but b/c it’s the one that sells—generic or store brand shampoo.  Mixed motive—not intent to deceive, but intent to incorporate these features b/c they signal a cheaper version of something that’s already selling.
Yen: Not terribly sympathetic to going after lookalikes, but one thing that’s going on is that someone who does that is using the mark-like aspects for descriptive purposes: the message is “the stuff is equivalent to the branded stuff.”
Laura Heymann: but why not just use the words?
Yen: it’s efficient; easier to see from far away.
Heymann: we assume these things, but is that true?

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