Thursday, August 10, 2017

2017 IPSC Conference at Cardozo School of Law

Usual disclaimers; there were lots of overlaps where I had to make tough choices, and I favored presentations where I hadn't previously commented on drafts.

Day 1 Breakout Session I
Trademark Doctrine
Mapping Confusion – Mark. P. McKenna & Rebecca Tushnet

Problem with LOC test.  Courts use the multifactor test.  Developed for a particular purpose: infringement in cases that didn’t involve directly competing goods, but related goods; and overwhelmingly in word mark/logo cases.  They’ve become a multipurpose tool in every sort of TM case, regardless of the theory of confusion and regardless of context.  One reason that happened is that 20th c. courts collapsed a whole bunch of different forms of unfair competition claims into TM w/o much consideration of nuances.  Among other things—papered over significant conceptual differences b/t types of claims. Lost sight of use as heuristic, rather than end in itself.  Detached from sense of what they’re supposed to be measuring.  At the end, court shakes a magic 8-ball and tells you which factors matter.  7th Circuit cases: reason, reason, reason, conclusion.

The LOC test is supposed to be measuring something other than itself. When it doesn’t measure that thing, it’s become detached from its conceptual anchor. Cts implicitly understand that and may truncate the test or abandon it altogether (Rogers/nominative fair use).  That seems awfully ad hoc.  What is the theory about which factors should apply when?  What is the theory for which theories of infringement should be used?  Cracker Barrel restaurants; Kraft’s preexisting processed cheese product Cracker Barrel.  Raises questions about priority in different markets, but 7th Cir. treats it in conventional source confusion ways—whether people will think it’s the same thing as the restaurant, then says that restaurants differ from cheese. Entirely ignores co-branding (e.g. TGIF frozen foods)—straightforward sponsorship confusion claim. Can also see this in IIC cases or reverse confusion—Gibson guitar—court just says we won’t go there b/c it scares us; could swallow up the rest of confusion b/c in most case it’s reasonable to ask whether some people might wonder about source when they saw a thing.

Paper attempts to do descriptive mapping: you say LOC is the test for infringement, but in fact you’re not doing that.  Sometimes we can justify that—NFU.  But it’s not just theories of infringement but also context—trade dress cases differ from word mark cases, especially in product configuration—increasing emphasis on labeling, contextual aspects that don’t show up in other cases.  Prescriptive: whether it makes sense to explicitly break apart some other categories.

Examples: sensible to say we ought to treat trade dress cases differently, for the same reason we would’ve once treated them as unfair competition claims.  Ought to treat them differently from word mark and logos; we’ve lost something by refusing to consider ontology (at least claiming to).

RT: Rogers as proof of concept.  You don’t need and in fact don’t have a unitary likelihood of confusion test—the 2d Circuit’s recent treatment of nominative fair use notwithstanding.  One payoff: break out trade dress again, not in protectability but rather in infringement.

Dan Burk: is this a paper about LOC or a paper about how courts do things?  It could be said about Fed. Cir. and doctrine of equivalents, or 9th Cir. and idea/expression.  This is what courts do w/tests.

McKenna: it’s about confusion too—how we ought to think about confusion assertions.  Right now P picks theories of confusion and one sticks (maybe), as if there’s nothing about those theories that fits a particular pattern of case.

Q: Restatement of TM?  After claim preclusion case, having PTO issue studies/working papers about how they might want confusion issues analyzed in different contexts—litigators might have different perspective.  Institutional way of thinking.

McKenna: that’s a bigger Q even than this paper. Believes should be done by courts, in part b/c Congress would not do well. Common law process has produced lessons that have been ignored/forgotten; we are trying to catch the patterns. Don’t want to let TM Ps tell us what they want.

Jennifer Rothman: Instead of unitary tests, we need lots of different tests?  Do we need a unitary concept?  We lose sight of what we’re actually trying to figure out, which is whether consumers are going to be confused [RT: and act on it]. Could more tests worsen that?  Second, you throw NFU and Rogers into the bucket, which are defenses not prima facie case—even if it’s confusing, we might let it go.

McKenna: Rogers is a nice example. What courts have done is recognize pattern of cases—deviate from LOC factors and ask a different set of questions, doesn’t bear much relationship to LOC multifactor test. It’s not a defense; it’s a mode of analysis for a particular type of case.  That’s not the only example, but there are other patterns and we should make that explicit. Part of the cost of using the multifactor test is that we have obscured that.  And it has also obscured, confusion about what?  Let’s be more careful about what we’re trying to measure and test.  Not about proliferation of tests but sometimes truncating the factors. This analysis might lead more naturally to double identity—same mark and same goods, no point in doing LOC test.  Old tests: only thing they really measured was similarity of marks, b/c competition was required. The LOC multifactor test was created because that got blown up. There are pockets that demand different approaches.

Jake Linford: Error costs v. administrative costs.  Do you approach this is concreteness about deviating from multifactor tests, or do you want offramps for different issues, like IIC or post-sale confusion.  You may have to wait for courts to follow things like Kozinski’s NFU test. Which courts should be the innovators?

McKenna: not the 7th Cir.  Functionality law has crystallized around a pretty clear set of rules (except Fed. Cir.).  Most cases now have converged on results, w/slightly different terminology. This can happen and in some contexts is happening. We should build some conceptual coherence about it so it’s less ad hocery.

Graeme Dinwoodie: One thing that happened w/double identity was collapse into confusion analysis, but w/burdens of proof. Maybe what it highlights is whether you want to categorize types of case by type of use or by reference to the type of harm at issue. If you do the latter, which might be what IIC is about, you might have a vehicle in Lexmark for doing that in the courts. 

McKenna: There’s overlap in type of use/type of harm, but we’re trying to do both. We shouldn’t pretend that all assertions of harm are the same.

Deborah Gerhardt: type of mark too, descriptive v. suggestive?

Copyright Doctrine
Copyright’s Transformation – Glynn S. Lunney, Jr.
Analog drove a lot in © that we don’t even think about today: natural monopoly economics predominate b/c of costs of distribution. Digital era: no longer true.  Example of duration: book would be distributed and then go out of print. Duration didn’t matter b/c the book wasn’t going to be printed again. Similarly w/derivative work. High capital costs to make one film from a book. Public performance: broadcasting networks had limited bandwidth. Digital changes the high fixed costs/low marginal costs of natural monopoly environment.

All the re-users were natural monopolies—broadcasting networks.  License fees are not passed on to consumers: TV station needs license from ASCAP/BMI, that won’t change the number of ads per hour they run.  Derivative works licensing costs to author won’t change cost of movie ticket. A prospect theory of © made sense: assign rights to initial owner and allow them to decide on exploitation.  Without a natural monopoly, © itself becomes the monopoly. The reason we only have a couple of digital performance services is b/c there is a DPR and you need permissions from lots of © owners. We almost had widespread webcasting, but we don’t.  Films: took 40 years to get a good Star Wars sequel after Empire, but for the Long Island Lolita case we got 3 films quickly, each from a different person’s perspective.

Prices of 50 best books from 19th c/20th c.  In paper world, average cost was $9/copy for © works, a bit lower for not-in-©.  For digital, average cost was $10 for ©; $0 for not-in-©.  Electrons cost less than trees but consumers are still asked to pay more (transferring their surplus). Getting less (no right to transfer, give to library) but being charged more.

Value-based v. cost-based pricing. Imagine a world w/just 2 products, food and music.  Imagine: each consumer has $100 endowment and identical preferences, and cost of each is $10. If everything is cost-based, then consumers spend $10 on food and $10 on music and keep $80.  If music is value-based while food remains cost-based b/c it’s competitive market, consumers will have to pay $90.  If society gets wealthier and consumers have $120, all that value goes to the industry. © is thus a tax on the full value of everything created by society. What happens if food technology improves and becomes cheaper—do farmers get to keep the surplus? No, b/c it’s competitive/cost-based market. That money goes to the music sector too.

Result of digital age: overestimate social cost of lost incentives and underestimate social cost of lost access.

In the 90s, when we gave the music industry all that money, we don’t see response to incentives we would have expected under conventional theory.

RT: Wouldn’t that tax on innovation still exist if food were competitive regardless?  It goes to consumers or music industry.

Lunney: yes; he’s just trying to point out what it really means to say that the value-based pricing is fine, you can just charge what the market will bear.

Q: if people save instead of spending, does that factor in?  What about infringement factoring in, where people refuse to pay and use other means? Does that make it more like cost-based?

Lunney: I’ve set it up as perfect price discrimination by having step demand function and uniform preferences; in the real world no value-based system works that way and some will be more effective at price discrimination than others. So some will remain in consumers’ pockets.  There’s no cap on how much value-based industries can capture in the model, whereas in the real world you can’t.  [Also b/c in the real world eventually the peasants will revolt, which has some conceptual relationship to torrenting.]

Rosenblatt: demand issues—insatiable hunger for more Star Trek stuff, but maybe not for more copies of a particular Star Trek movie.  Can you account for that?

Lunney: that’s about the costs of licensing, which are treated as if they were still analog.

Incentivizing Conceptual Art Through Social Norms—Guy A. Rub
Multiple copy model (Harry Potter) and single copy model (Guernica).  Books have to control copying b/c this is where the money is made, whereas Picasso’s money isn’t in copies; copies are inferior substitutes, so all he needs is personal property law, not copyright law.  Conceptual art is somewhere in the middle.  Definition: “Art in which the concepts or ideas take precedence over traditional aesthetic concerns. This means the idea is important but the execution is a perfunctory affair.” Value is opposite place from where © locates it.  MOMA paid a lot for Duchamp’s shovel (In Advance of the Broken Arm)—no different to the art world than paying a lot for Guernica.  What do you do if there’s no specific object attached to the work of art?  Consider Felix Gonzalez-Torres, Untitled (Portrait of Ross in L.A.) (1991): It’s instructions.  175 pounds of cellophane-wrapped candies, visitors invited to take candy, museum replenishes the taken candies every day.  It has a meaning: 175 pounds was the weight Ross, his partner, was when he was healthy and not dying of AIDS; the candies are the diminishment of the disease.  But what color, shape, size is the work? None of this is defined.  Can be piled in a corner, put on the floor in a rectangle, used to form a line that encircles the museum.  Where is the © protection, even setting aside the fixation issue?  None of it is protected.  What does he sell? He sells the idea.  A similar work by the same artist sold for $8 million.  What did the museum buy?  Not the candies, and not the ©.  Nonetheless, descriptions do bear © notices in the name of the Felix Gonzalez-Torres Foundation.  The foundation claims to own © in “all works by Gonzalez-Torres” (some of his work has more physical components).

Curators say: these works are “owned,” typically by a museum, but it’s difficult to explain what is owned. They wouldn’t imagine presenting them w/o a lending agreement from the museum that “owns” them. Otherwise this would be “fake” or “forged.” Even though it’s the curator at the “borrowing” museum that decides the shape and arrangement of the candies.  In addition, get permission from relevant artist/foundation. Lending museum generally requires it, and even if not, we will do it. A “heavily inspired” work doesn’t need any of this. If the level of copying is artistically justifiable (“if it’s good”) we won’t ask for permission—curators even had a difficult time understanding the question.  “Copies” by individuals are sometimes perceived differently.

Artists have weapons in their arsenal to control works w/o law—Richard Prince says he doesn’t his like his 1980s work any more, doesn’t represent him as an artist. Some museums won’t show it any more, others will.  Lost at least some value.  He created a work for Ivanka Trump, then disowned it. 

Takeaways: strong gatekeepers/strong enough social norms: art world create a de facto in rem right in public ideas—private ordering steps in, but it mimics legal language of ownership/licensing.  Thin and flexible right, doesn’t seem to cover personal copies or derivative works.  The museum trusts the foundation of Felix Gonzalez-Torres b/c the person who runs it knew him well. Notion of exhaustion isn’t followed; artist and foundation are keepers of authenticity. Legal rights from VARA are limited but powered by community norms. Artists have leverage over “property” owner.

Q: What about the story behind the art? What gives it meaning is the reason that the candies are there and that they weigh 175 lbs. Isn’t that protectable expression?

A: I would push back on that. Those are facts. 

Q: isn’t the candy the expression of the story?  Undefined, but still.  The story that goes along w/it could limit the explanation others might offer.

A: context gives it power, yes

RT: Conceptual appropriation art: Did you ask them what would happen if I titled a pile of candy “After Felix Gonzalez-Torres”?

A: Asked them about appropriation art, though not this precise question.  They said they were happy with having appropriation art in their museums, so if it met that definition they’d be fine w/it.

Q: what would be the advantage of copying w/o permission?  It wouldn’t necessarily allow them to charge less for admission.  What happens to the rogue gatekeeper?  Will donations collapse?

A: they’d excommunicate the rogue. They’d say this isn’t art.

Perzanowski: Do they think they’re following the law?

A: Talking to their lawyers is next step, but his sense is that yes, they think they’re using legal concepts. [Which is consistent w/other things we know about how people tend to think that the law is what they think is just.]

Revisiting (Moral) Rights for IP-Wronged Music Vocalists—Tuneen E. Chisolm
Followup to earlier paper about ownership interests of music vocalists—seen up close inequities that are visited on vocalists because of industry practices/©.  This piece looks at moral rights justification for proposed © solutions.  Can they fill the gap for absence of moral rights protection for non-visual artists.  It’s a contract issue, but also a bargaining power issue.  Different rights for sound recordings; non-economic inequities from involuntary associations, such as political campaigns, advertising, sampling, objectionable soundtracks.  ROP: Hasn’t worked for vocalists when their actual recordings were used under license.  Could address inequities w/moral right of integrity, but also wants to explore whether © could do the job if © protected a fixed performance as an applied composition, w/vocalist as author & full bundle of rights, subject to license but not assignment.  Require consent from vocalist as author to create derivative works.  Practice of stripping out parts of sound recording to have only the voice—but the work is intended as an integrated whole; would require use of the integrated whole, consistent w/idea of what joint work is in the first place.

[This paper has an interesting dialogue w/Lunney’s paper.  Why would a vocalist still sign these contracts in the digital age?  And I don’t mean to suggest that they’re necessarily foolish to do so! Maybe we still have some non-© chokepoints based on legacy industry structure? What would you say to someone who claims that digital distribution will solve your problems of bad contracts.] [Not sure these treatments of uses in advertising are inequities: if someone owns the © in any work and licenses it for ad use, the non-owner creator is out of luck, right? Maybe a practical difference in recognizability]

A: use counter to vocalist’s personal values.  Digital simply hasn’t changed the inequities to date. The labels are consolidated into 3; at the end of the day because they monopolize a lot of distribution, artists still sign w/them.  Independent route is harder, costly to get your music heard above the fray.

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