Monday, June 17, 2019

Uncommon sense on the presumptions granted by registration

Uncommon, LLC v. Spigen, Inc., No. 18-1917 (7th Cir. Jun. 11, 2019)


The PTO has sometimes found “capsule” merely descriptive of cellphone cases, but it also allowed Uncommon to register CAPSULE for such cases in 2013.   (A prior registration for “capsule” for such cases was cancelled in 2015 for failure to renew.)  Uncommon sued a rival, Spigen, that also used the term and had done so since 2010, with no knowledge of Uncommon’s use. Spigen applied to register “Capsule Capella,” “Capsule Solid,” and “Air Capsule,” but the PTO decided that “capsule” was descriptive. Capsule Solid ended up on the Supplemental Register, and the PTO required Spigen to disclaim “capsule” for Capsule Capella.  It also initially refused “Rugged Capsule” and “Capsuled Ultra Rugged” on grounds of descriptiveness and confusion with Uncommon’s mark; those applications had been suspending pending this litigation. The district court granted Spigen summary judgment and the court of appeals affirmed, saying some things about registration.
 
the accused cases

Uncommon's cases

Spigen produced a survey to prove that consumers didn’t associate “capsule” with Uncommon’s cases, and it erroneously disclosed the person who conducted the survey as a “non-testifying expert.” Admitting the survey anyway wasn’t an abuse of discretion on these “unusual” facts, because Uncommon gamed the system by not seeking discovery or other corrective measures when the error became manifest, and it was reasonable to call the error harmless.  (The court suggested that it also would’ve been fine to exclude the survey: survey evidence generally requires a foundation, which will require expert testimony.)

With the survey, there was no genuine issue of material fact: the registration was invalid and there was no mark to protect, or any likelihood of consumer confusion.

The registration was prima facie evidence of validity.  It allowed one of two presumptions, but not both: if the mark was registered without a requirement of showing secondary meaning, it would be presumed inherently distinctive; if it was registered as descriptive with secondary meaning, it would be presumed to have such meaning. Since Uncommon didn’t register under §2(f), the presumption was of suggestiveness.

The Seventh Circuit has said that the presumption is “easily rebuttable, since it merely shifts the burden of production to the alleged infringer.” The presumption “evaporates,” or “burst[s],” when the challenger presents evidence of invalidity.  Some have criticized this approach; though the Seventh Circuit doesn’t say so explicitly (somewhat surprisingly, given the general frankness of that court’s approach), the PTO’s inconsistent practice here demonstrates the wisdom of the Seventh Circuit’s rule. Fundamentally, examination is not nearly as rigorous as the testing provided by litigation, and where B&B preclusion doesn’t apply, it makes sense to take another look once the challenger has provided reason to do so.  (Of course, this doesn’t help much for incontestable registrations, whether or not registered under §2(f), but you do what you can.)  But anyway, even if Spigen had both burdens, production and persuasion, it would win here.


A descriptive mark “need not describe the product completely, but it must depict an important characteristic of the product.” By contrast, a suggestive mark “requires the observer or listener to use imagination and perception to determine the nature of the goods.” Drawing the line can be done by looking at “how, and how often, the relevant market uses the word in question.” The answer is a lot, and descriptively.  At least ten competitors used the word in their case names; one was even named Capsule Case Corp.  Previous cases have used the prevalence of “bliss” in the beauty care market and “platinum” in the financial services market to deem those terms descriptive; so too here.

Uncommon argued that these were all infringers “freeloading on Uncommon’s good reputation with consumers.” But there was no evidence of such a good reputation, or even evidence of copying. Uncommon also argued that, in the internet age, people throw lots of words into their product names to get hits, so competitors’ use of the term should be discounted.  That didn’t make sense; in fact, the example showed lots of descriptive terms packed into a long name.

Likewise, using the imagination test, “capsule” was descriptive.  “The mark directly conveys an idea: coverage, storage, protection—encapsulation—all of which the cellphone cases provide, according to Uncommon’s registration.” It didn’t depend on the technical meaning of capsule.  The Seventh Circuit is also dubious about using dictionaries, “because dictionaries often cite historical and dated definitions.”  But the dictionary here reaffirmed what the market’s use and imagination test already revealed: “capsule” describes cellphone cases. Spigen’s evidence included definitions like: “a small case, envelope, or covering,” “any object that can be used to hold things,” and a “small container.” “A cellphone case obviously fits the bill.”  The district court shouldn’t have relied heavily on them, but they weren’t “obscure, functionally irrelevant, or out-of-date” and could legitimately constitute “a piece of the puzzle.” Thus, “if, hypothetically, consulting dictionaries revealed that they do not define ‘capsule’ in a manner that so easily fits cellphone cases, Uncommon might have evidence in its favor. A factfinder could potentially infer from such omissions that ‘capsule’ does not describe cellphone cases.”

The court of appeals declined to rely on third-party registrations.  The PTO granted Vatra’s registration and Uncommon’s, but “more often than not, and more recently,” it decided that “capsule” was merely descriptive.  “[G]iven the internal inconsistency, we find little that can be reasonably gleaned from the Office’s registration decisions.”  [Which is why the bubble-bursting presumption is a good one.]

Uncommon had one more bad argument, which was that, because “capsule” could describe an array of products, it couldn’t be descriptive. Although some circuits—including, appallingly, the Second—have endorsed this reasoning, the Seventh has it right.  “A term need not ‘bring to mind the product in question’ to be descriptive, nor must it ‘depict the [product] itself.’ It is enough that the mark in fact ‘refers to a characteristic of the’ product.” 

Uncommon relatedly pointed to the survey, which showed that consumers don’tt often associate “capsule” with cellphone cases (only 14 percent of the time). Again: “A descriptive mark need not immediately invoke in the consumer’s mind the product itself; it must directly convey a characteristic of the product.” Thus, “Work-N-Play” as a name for vehicles with convertible interiors was descriptive not because consumers quickly associate “Work-N-Play” with interior-convertible vans, but because the vans were in fact “usable both for work and for play.” “Consumers may not immediately think ‘cellphone cases’ when they hear ‘capsule,’ but ‘capsule’ describes a quality of cellphone cases all the same.”  [Other courts, please take heed. Big is descriptive for every one of the many, many things that are big.]

With the registration’s presumption of inherent distinctiveness rebutted, the court turned to secondary meaning.  Since it wasn’t a §2(f) registration, there was no presumption here.  Spigen submitted one of the more “helpful” kinds of evidence: the survey, which showed that very few customers (six percent) were familiar with “capsule” as a brand name; only slightly more (14 percent) could connect the mark to cellphone cases when prompted; and barely any (less than one percent) associated “capsule” with Uncommon. Even assuming that manner and length of use favored Uncommon, no factfinder could reasonably decide that a substantial number of consumers think of “capsule” as the product of one cellphone-case maker.

Uncommon argued that, because “capsule” had a similar amount of consumer recognition as a few other brands in the survey, it had “reached a level of distinctiveness.” No, because none of the “capsule” comparators had much recognition either (citing McCarthy and past judicial requirements of at least 37% recognition).

Confusion was also unlikely. “[V]iewing the record in  Uncommon’s favor, as we must, the similarity of the marks favors Uncommon, albeit slightly,” as did product similarity and area/manner of use (they’re sold nationwide through online retailers).  “But the inference to which Uncommon is entitled is not a strong one. Selling through Amazon and eBay is ubiquitous, and it is hard to devise a more generalized customer base than nationwide cellphone owners.”  The products were cheap, meaning consumers wouldn’t exercise much care.

But the remaining factors decisively favored Spigen, particularly strength.  The court of appeals called “capsule” a “weak mark,” but of course, lacking inherent or acquired distinctiveness, it is not a mark at all.  There was no other evidence of the marketing power of the mark, and neither party’s cases featured “capsule” prominently.”We fail to see how there is a likelihood of confusion caused by a mark that is hardly featured.” There was also no evidence of actual consumer confusion or an attempt to pass off. “The marks are, at most, barely similar, and they are too weak to confuse any purchaser, especially in the absence of evidence of any intentional freeloading.” 

[On this record, they’re not marks!  You were doing so well!  I suspect the desire to call these terms “marks” has to do with the abandonment of passing off as a separate tort, as indicated by the repeated reference to intentional copying—the court of appeals has in the back of its collective mind that maybe sometimes intentionally confusing copying (as opposed to copying to achieve some non-reputation-related reason, like the fact that “capsule” is a useful descriptive term) should be actionable.  But you don’t actually need a “mark” to make that tort work, as Mark McKenna often reminds us.]

Friday, June 14, 2019

A Celebration of the Work of Wendy Gordon, part 4


A Natural Right to Copy by Glynn Lunney, Texas A&M University School of Law
Thanks to the great women who encouraged intellectual honesty in topics and analysis of topics, not just Gordon but also Litman, Samuelson, others.  Gordon doesn’t agree w/how far Lunney takes her argument, but that’s ok.  Gordon’s “A Property Right in Self-Expression” shows that Lockean arguments for authors’ rights also provide limits on those rights that are themselves in the nature of natural rights.  Lockean proviso: there has to be enough and as good left over for others in order for property claims to be justified. Is copying right or wrong?  There is dispute! 

He thinks natural rights are nonsense on stilts; natural laws would exist without people.  He thinks it’s often just hidden utilitarian balancing.  Kant’s Categorical Imperative: if the Nazis ask you if you’re hiding Jews in your attic, should you tell the truth?  Utilitarian balancing would give us a very different answer.  A natural right should also be technologically independent, which seems inconsistent with © and its recency.  He thinks of natural rights as rhetorical tools.  Rhetoric, though, matters. [Lunney characterizes natural rights arguments about fairness as “utilitarian arguments for people unable to do math”—but of course none of us can really do math, in the sense required for doing utility calculations that would take into account all the knowns and unknowns, especially at the level of detail required to distinguish two fairly similar policies from one another.  Thus the appeal of rule utilitarianism and so on. Obviously this is a much bigger debate than any of us can do justice to right here!]

Judges sometimes equate copying with stealing, but he thinks this is wrong.  Moses smashed the original tablets from the mountain; we only have the Seventh Commandment because Moses copied them and plenty of others did too. Copying is never stealing and an expansion of the no-harm principle that equates them is difficult for him.  No-harm principle: Locke says no one ought to harm another in life, health, liberty or possessions—but there’s nothing in there about economic harm/deprivation of royalties.  Mixing labor as justification for property seems inconsistent w/counting economic harm—if value alone justified a property right, we wouldn’t care about how I got a pile of apples.  This is relevant because of the well established principle of damnum absque inuria: harm without legal injury, as when competition decreases profit.  Gordon does distinguish harm from wrongful harm, but not all free riding is wrongful harm—Kellogg copying Nabisco shredded wheat and automakers copying the idea of the minivan are both desirable forms of competition based on free riding. 

Gordon suggests that utilitarian balancing can trump deontological concerns when the costs are too great. How do we know when they’re bad enough? Who decides?  Category error: even if you could use Locke to justify initial ownership of the song, what does that mean when you’ve shared access w/another? Locke is about initial ownership, not what rights you retain even once you’ve transferred in the absence of an express or implied contract.

Contributions to value to a novel other than the novelist’s own work: the people who taught her to read and write; the people who created moveable type and all the other distribution elements; people involved in creation of market demand, such as people who paid workers enough to have money left over to buy the novel. Once you do but-for or even proximate causation all of those matter.  He thinks what’s efficient and fair is a cost-based allocation.  Inefficient and unfair to have a rule that’s cost based for everyone but the © owner who gets a value based reward.

What should be the default rule? What’s more important to society, copying or creativity? To him, it’s copying. We talk today b/c we share a language that neither of us came up with or decided to adopt. We both copied the language and its structure.  What we’re doing in © is important but what’s more important is the right to copy and talk.

Commentary by Richard Stallman, Free Software Foundation

Defaults are tremendously important. “IP” is both wrong descriptively and an overgeneralization about the very different regimes lumped together under that term. It gives you a bad way of thinking by default.  Law professors can probably overcome that but if you don’t spend a lot of time with it, that will mislead you. Natural rights have to be about morality; natural rights imply natural responsibilities, though that doesn’t mean you have to do a recommended act every time. E.g., sharing is good/feeding the hungry, but you don’t have to do so every time you’re asked; it’s instead that if you never do it then you’re not a good member of society. Respect natural rights and permit people to carry out their natural responsibilities to share.  You don’t “consume” published works. They don’t disappear as your eyes pass over them. It’s an economic metaphor that also changes your default thinking. The idea that you have to compensate a business for not being able to make money from something that it bought is planetary suicide when it comes to resources, and this relates to © as well.  Would also distinguish software from creative works; software as a set of instructions needs to be free or it subjugates users.

Syed: Lunney was careful and crisp in discussing deontology, but lumped utilitarianism together.  If you’re truly a maximizer, do you believe that fair distribution plays no role?

Lunney: people would choose fair distribution over unfair, because we’re risk averse; distribution is a utiltiarian consideration. 

Gordon: it’s true that Locke justifies right to use more than right to exclude. But what he’s describing is one of many ways of saying, all else equal, if someone has invested a lot of himself into a project, you have an obligation not to disrupt that project without a good reason, though we can then talk about what good reasons might be.

Lunney: prefers the defaults reversed. Who has to justify a change in the default and what does it take to do so?

Unfair Use as Market Failure by Ariel Katz, University of Toronto Faculty of Law
Fair Use as Market Failure’s contributions include: theoretically coherent framework for understanding fair use, at the time a mess; pioneering economic analysis of copyright; offering economic justification for fair use; showing how broad fair use conception is economically consistent w/©’s premises. Alas, misunderstood as implying that fair use should only exist when transaction costs are high and should disappear if transaction costs become low enough to allow negotiation b/t © owner and user. Instead, looking at whether there is a reason we can’t be confident that deferring to the © owner’s self-interest will also lead to overall social benefit? If we can’t, then there is reason to go to fair use. But this logic presumes that we can ordinarily be confident that deferring to self-interest will serve social goals, and if and only if that isn’t true, such as market failure, then it might make sense to refuse to defer to © owner’s veto.

But should we ordinarily be confident of this? Why not require © owners to show that their self-interest aligns with the public interest?  What creates pull to overly narrow fair use: (1) market supremacy premise: in general, social welfare will be maximized if market transactions b/t © owners and users would precede as many uses as possible bc the market is in general the best way of doing things; (2) broad entitlement: © owner is ordinarily entitled to revenue for all substantial uses of the work; (3) when economic value is at stake, we ordinarily want a potential user to seek permission from © owner and pay a negotiated price.  Begins with the assumption that © markets are efficient, but they are usually understood as deviations from static efficiency done in order to create incentives (keeping prices above marginal cost). Copyright by design undermines the perfect efficiency of the market.

Relatedly, do we want as many uses as possible to be market transactions? The opposite: social welfare is maximized if we have as few uses as possible as market transactions.  Nor should we agree with (3)’s broad entitlement: fair use isn’t an infringement and not part of the owner’s entitlement, and a © owner shouldn’t get more than necessary to generate works. It is, in other words, unfair uses that present market failures. Copyright is against natural rights; it is a legal monopoly and a creature of positive law only.

Commentary by Chris Sprigman, NYU School of Law: Microsoft antitrust litigation was how he started to learn ©: Microsoft’s argument was that it owned the © so nothing it could do with the © could violate antitrust law. Court says: saying you own the © so you can’t violate antitrust law with it is like saying that because you own a baseball bat you can’t be held liable for killing someone with it.  Monopolies and market supremacy: this is the key idea, that property structures markets and that the markets are run by private transactions by default.  Broad entitlement then follows from that: © owner is entitled to all rents that market supremacy makes available.  So is the idea that we ordinarily want transactions to take place b/t © owners and users of the works.  Combination: strong deference to © owner, which then leads to overly narrow reading of Gordon’s work on fair use. 

Katz’s first best solution where goods are nonrival: competition.  Katz would presume fairness until unfairness is demonstrated. But what’s Gordon’s first-best world?  Have to think about static v. dynamic efficiency. The holy grail would be to optimize static + dynamic efficiency. Gordon’s first-best would be a copyright system that does this. If you believe that copying causes long term welfare loss, you should end up with “efficient copyright.” Under that scheme, Gordon’s premises hold.  Rights with appropriate scope, term, and limitations. But we don’t seem to have that, e.g., it’s hard to understand the point of © for fine art. Balancing static + dynamic efficiency seems unlikely given how much lumping together Congress has done, even if you ignore problematic political economy.

What is to be done? Should judges interrogate the static/dynamic balance, the scope, the limitations that Congress has enacted?  Care is warranted, but Congress has left open some room, viz. fair use. Even if fair use is a defense, it isn’t an affirmative defense: the P should, once raised, have the burden of going forward—Lydia Loren’s article and the reasoning in Lenz in the 9th Circuit.  Skeptical about judges doing other things in ©; we don’t have a different term for motion pictures than for software, even though we probably should, and judges would have a hard time doing that.  [I would note that anywhere else in speech regulation judges have no problem saying things like this and performing their own static/dynamic/other analyses—that’s what strict scrutiny does.]

A Celebration of the Work of Wendy Gordon, part 3


Death in Copyright: Remarks on Duration by Abraham DrassinowerUniversity of Toronto Faculty of Law
What would a rights based account of duration look like?  Really about death, not duration. Patents have a fixed term; trademark registrations also persist for a specific amount of time before renewal is required.  © is life plus 70 (US) and 50 (Canada)—the number isn’t the same for all works.  Something other than number alone goes into the determination, which is death of the author.  What is it about © that summons mortality so deeply into its substance?  History is one answer, but not of as much interest to him.  Does the concept of mortality fit © in a distinctive way?

His proposal: The idea of independent creation contains the idea that the author is a mortal being; the theory of originality is already a theory of duration. Works as messages: communications from the living.  Not an owned object but an expressive act. Duration affirms the specificity of the length b/t author and work as copyright subject matter. B/c author and work are inseparable, the death of the author must signal the death of the right.

Commentary by Paul Gugliuzza, Boston University School of Law
Original 14 year term seems to have come from the first patent statute, which itself was double the usual apprentice term.  There’s no reason to think any of this was socially optimal for incentives [or otherwise].  And it’s gotten longer and longer b/c of © owners’ political power.  Drassinower isn’t looking for social optimality, which is a pretty impossible Q in the abstract anyway.  But US law isn’t animated solely by moral rights; suggest engaging other analytical modes, especially given the provocative nature of the claim that © should be cut back a lot compared to where it is.  Utilitarian arguments for extending some © beyond death, if not for life + many decades.  Older authors might need incentives; predictability of ensuring some duration beyond perhaps a few days. 

Talha Syed: we can resist various moves, including that independent creation requires inseparability of author from work.  We could also say that conceptual integrity in the system isn’t important: we can have independent creation and an unrelated term.

Drassinower: takes independent creation to be fundamental to what we think © is and is for.  That’s why he wants to use it to look at other parts of the system. 

Litman: earlier US terms did look at whether the author lived past a certain time for renewal term/ownership.

Experimental psych confirms Gordon’s insights about intuitive power of “reap where you haven’t sown” trope. Even little kids have intuitions about ownership of ideas.  Important pattern in IP law: creation or extension of common law protection due to restitutionary impulse/ “felt necessities.” Restitutionary impulse starts young: children apply ownership principles to some ideas, though not to common words. Kids by age 5-6 don’t like copying as much as they like original drawings, and they especially don’t like falsely claiming credit.

Felt necessity: economic hopes of a less confident, service oriented economy have switched to knowledge goods.  Demsetzian version of property rights: over time, property rights develop in response to growing (relative) value of intangible assets and cost-justified ease of defining boundaries. There’s a political, economic story of limitations and exceptions, whose creation can also be told in Demsetzian terms; IP rights create victims who can lobby too. 

What’s happened over decades with restitutionary impulse?  Federal dilution law; progression from common law to statutory right of publicity and almost inevitable call for federal uniformity; federal trade secrets law. 

Haelan as a moment of creation: they tried to create an exclusive right to a player’s image through contract, which couldn’t be done just by waiving the player’s privacy rights as to the chewing gum company.  It has to be done with a new right.  The alienability was at the heart of the new right. 

Restitution is a substitute for the market; sometimes comes from failed market transactions. Property is instead about creating markets: standardized bundles of rights that are easy to transfer.  Restitution is reactive and property is generative: corrective justice seeks to restore a status quo, while new property rights deviate from the status quo. Market transactions can be based on a bundle of rights more easily than on a bundle of duties.

Commentary by Bob Bone, University of Texas at Austin School of Law

Gordon is a value pluralist, and this helps with her affinity for the common law, where judges grapple with various values.  Principles may incubate in common law, though they can also come from statutes. Public choice makes it messy. Hard to say anything general about creation of IP rights.  Maybe original idea is some kind of moral insight, but they eventually get driven closer to property rights over the long run.

Intuitions about ownership are socially contingent in large part.  [Everybody eats, but different cultures find different foods appealing/disgusting.]  Plagiarism: Merges slides pretty smoothly between copying and failure to give credit, but kids seem more interested in the latter: the opportunity to give authors credit for their work, which would lead to an attribution right rather than a restitutionary claim.  Deeper Q: why follow moral intuitions? Some of them are bad!  How do we determine the lower level, more specific principles entailed by moral intuitions?  One way might be to look at the common law to see how some principles check others.  But common law is affected by other factors too; we can look elsewhere.

Q: sometimes children are mean and manipulative; they may make ownership claims as a matter of self-interest, but that doesn’t tell us what we should be doing.

Dreyfuss: EU trade secrets directive: is it property and will it therefore be controlled by human rights law? That’s a big difference b/t relational rights and property.

Q: fannish community opinions on ©: attribution and fairness are the norms; social contract idea—authors should allow fans to engage in certain types of noncommercial creative work. Moral rights concepts.

[A couple of thoughts, overlapping with the others: Glynn Lunney’s piece for this conference is all about responding to the restitutionary impulse. The YA book The Girl Who Owned a City represents a good example of one of the problems: the book doesn’t mean to do so (it’s supposed to tout Objectivism) but it demonstrates the impulse to claim ownership of that which is not new, but which was news to you and thus feels like “yours.”  Relatedly (since the book is about kids who have to recreate society after all the grownups die), maybe what kids think is a starting point in need of a justification since we are in fact supposed to be socializing them.  Indeed, kids do a lot of copying that isn’t even noticed as copying: trace the letters to learn how to write; instruction where we have students watch then do, which is to say copy, then teach, which is to say have others copy you; perhaps this can often be distinguished as processes v. outputs, but copying letters is copying outputs, not just tasks. We could say that in those situations copying is clearly valorized, but we then have to figure out why the valorization doesn’t carry over.]

Common Law Conceptualism in Intellectual Property by Shyam BalganeshUniversity of Pennsylvania Law School

Gordon as conceptualist who attempts to organize analysis/reasoning around discreta analytical devices that serve a simplifying role w/in relevant context. Takes legal doctrine and reasoning seriously as a mode.  Different categories of conceptualism: formalists (e.g. Joseph Beale) who thought that legal concepts had their own immanent normative logic which gave definite answers to cases. Realist conceptualism (Frances Bohlen, Wesley Hohfeld): legal doctrines as grounding for decision making but not “closed”: legal concepts could be deployed towards social ends, but they meant something. Neoconceptualist—Gordon is somewhere between a realist and a neoconceptualist. Not wedded to a singular methodology.  She adopts the Hohfeldian set for copyright, but is willing to read normative criteria into their working, and is skeptical of normative essentialism (unlike traditional neoconceptualists).  Suggests move from copyright to copy-privilege: move from P to D. Privilege is subsidiary: it needs protection by a “right” of some kind that allows the exercise of the privilege. W/o a right, there is no no-right/duty to not interfere w/the privilege.  Privileges of ownership, similarly, aren’t protected in the absence of a right to exclude.

Implicit moves: the owner’s entitlement also becomes a privilege, not just a right. Right to exclude is replaced by exclusivity as a continuum.  Questions the property/copyright analogy, boundaries, thingness. Evaluative turn: focus on entitlement structure leads to an evaluation of the utility of property analogies. It reveals copyright’s conflation of harms and benefits and the move from property to unjust enrichment.

Legal structure of © is not contingent—see Drassinower—there are some basic principles that make ©  mean something. These legal concepts allow © to accommodate a plurality of normative considerations. This may be messy in practice, but it is true. Our search for purity should not lead us to oversimplify.

Challenge of copyright conceptualism: ©’s unique challenge is its legislative origins.  It is not a creature of common law.  Conceptualism is not the same thing as textualism: looking for analytical logic underlying the text.  An idea acquires meaning through usage within a context or domain, not through fiat. Thomas is wrong in Star Athletica to leave behind all normative logic underlying the text of the statute and to say that we begin & end with the raw text of the statute.

Commentary by Talha Syed, Berkeley Law
Conceptualism begins as the search for necessary and sufficient conditions for the use of a word/term—the hunt for essences. 50s/60s: turn to essences/family resemblances.  Third version: capture ordinary uses for good enough work (HLA Hart). The problem, in any form, is the attempt to fix meaning; there is always, inevitably, an unargued for smuggling-in of a normative conclusion. This is what gave conceptualism a bad name.  Hohfeld says rights are definitionally relational: there are no rights on a desert island. He’s building an idea.  Entitlements implicate different interests in different contexts: a use privilege and a right to exclude are different.  The unbundling just follows from analyzing the issue before you. The tools are normatively neutral: focal points for positive/normative analysis, and immensely useful nonetheless. If you’re thinking about law, you’re thinking about social relations and there’s always burden/benefit, entitlement/disentitlement, and the interests vary by context and purpose and it would be odd to bundle them together and act as if answering one question answers them all.  This is a Copernican revolution, and Gordon brings it to ©. Nonrivalry is a constitutive feature of IP versus intangibles. This is the driver of Gordon’s harmless free riding: prima facie, using a nonrival resource doesn’t harm others w/r/t nonpecuniary harms. That’s a conceptual move.

Copyright Practitioners and Copyright Scholars by Jessica Litman, University of Michigan Law School
Gordon was one of 9 women teaching any IP course at any accredited law school when she began teaching. Then as now the spectrum of views on IP was wide. © lawyers saw each other as a priestly elite, and debated essential but hypothetical questions under the new 1976 Act, like “if you build a sandcastle below the high tide, is it fixed?” Then as now, the © bar was essentially a plaintiff’s bar. Genuinely shocked and dismayed when courts or Congress disagree w/their ideas of how to do things.  There were insiders and outsiders, real lawyers and those who research/practice but don’t count.  Litman worked on Gordon’s foundational Columbia LR article on fair use as market failure as a law student! [Happy coincidence exclamation point mine.]  Fundamentally theoretical work, not “practical,” but nonetheless of great relevance and potential utility to practicing lawyers.

Today, the relationship b/t academics and practitioners is more fraught; tech has brought more money at stake and new tech has also made hypotheticals more realistic. Entry of new players w/significant financial and political clout, which caused old lawmaking patterns to not work so well any more. Previously, if certain groups agreed w/each other, Congress would enact it; upstart groups could be maneuvered around or bought off.  That stopped working when the new entrants came to the table w/more economic and political resources than the quote unquote core copyright industries. 

© rhetoric has been overheated (Boston Strangler = VCR; HathiTrust as Plessy v. Ferguson) but seemed like an escalation to Litman.  Maybe it’s just the age of Trump and that’s how we do now.   Too simple to blame the rift on the fact we don’t agree; most lawyers get that other lawyers hold opposing views, and she didn’t see this problem 40 years ago.  The way legal scholars think about © versus how practicing lawyers and lobbyists think have diverged enough that we’re not speaking the same language. 

One important milestone of divergence: 1984, when Reagan Admin and State Dep’t were keen to join Berne; asked Irwin Karp to get together w/Authors League of America, Authors Guild predecessor, to write a report indicating that only minor, uncontroversial changes would be necessary to adhere to Berne. Claimed that American law already amply protected moral rights through contract, state statutes, unfair competition/TM law.  This argument was a lie.  The best anyone could say at the time was that it was just barely colorable, but no one actually believed it.  © professors were divided about whether accession was a good or bad idea.  Request for their comments put joiners into awkward position—it seemed like the only feasible path to accession, but lying about the law is not in the job description.  We see law differently! We are subject to wishful thinking, but we’re also trying to discover the law rather than to make it up. Some comments enthusiastically supported Berne adherence but disagreed with the report’s description; some kept heads down; some submitted carefully drafted comments that avoided discussion of the touchy parts.  The gambit left an unpleasant taste.

Inflection point 2: runup to the DMCA.  1993 discussions: © owners were reluctant to involve Congress in changing © at all, b/c only last year AHRA had been enacted and Congress had insisted on allowing consumers to make noncommercial copies of recorded music. Wasn’t unimaginable that it would do the same for digital files. Yet © owners spoke candidly about difficulties of current system, especially sound recording industry. Hilary Rosen (RIAA) insisted that w/o public performance right there was no means to assert control over unauthorized performances online b/c transmissions were performances. Bruce Lehman asked “can’t you treat that as distribution of copies,” and industry reps replied they’d thought of that, but first sale was a problem. If authorized transmissions are distributions of phonorecords, then the authorized recipients could redistribute them.  So they needed a public performance right. Lehman and his staff pursued a different tack—they wrote a report claiming that © law already covered almost everything the © owners wanted.  This time law professors didn’t wait to be asked, and spoke up to contest the distorted view of current legal doctrine. It didn’t matter much; academic opposition barely affected the law’s enactment, but in the ensuing 3 years, supporters of the Lehman approach managed to persuade each other to develop message discipline. That message discipline has been on display in subsequent efforts to persuade USTR, Congress, White House to get on board—“rogue websites,” value gap, etc.  It’s an effective strategy, and it’s hard to say it’s immoral from a policy perspective, but it’s not what academics do or like.  It’s an important and respected lawyerly tool but not a scholarly one: message discipline is inimical to us, whose norms look for the new and different.  That means that professors could mess the message up if anyone listens to us, which has produced a bunch of “stay in your lane” instructions to avoid advocacy, amicus briefs, etc.

Does it really matter? Instead of one priestly tent, we have two tents populated by different priestly tribes?  Yes, it’s worth addressing.  Professors have been sidelined in law reform arena and limited in our influence on regulation, compared to patent for example.  That has costs, as in the MMA which was written to be unreadable. Even if we did read it and had stuff to say, no one listened, so why put yourself through that? The law we got includes naked wealth transfers from composers and independents to big three labels, and it’s much worse for our not being meaningfully involved.  Sure, some have hooked up with new intermediaries, but many of us have things to say to the “core copyright industries.”  Gordon’s work is not about tech issues, but about fundamental justifications.

Commentary by Justin Hughes, Loyola Law School, Los Angeles
Disagree on moral rights. He believes that the © lawyers opining then believed they were lying—but they weren’t public international law scholars.  (It turns out that complying with Berne on moral rights, like complying w/ int’l law more generally, is a lot easier than you might think based on what Berne seems to say.)  Marrakesh: didn’t recognize the earlier account of the treaty negotiation process. A lot of the treaty’s prose is his, as chief negotiator.  It is true that very early on, the deal was to take the MPAA out. He did that deal. The Holy See didn’t play a pivotal role, but it addressed the EU, not the Latin Americans.  In fairness to PK, he was repeating hearsay b/c PK didn’t participate; Gigi Sohn was very politically savvy and knew PK could help best by staying out, as could Google. The acrimony b/t © and “anti-©” [my quote marks] people was so strong that disinterest was better than participation. 

The game is a rough one at this point.  Ask yourself what you expect of yourself and what you expect of others. The rules are different for social media than for amicus briefs.  Some people [I am one of them; Hughes is not] signed on to an MPAA ad against the ROP law proposed in NY; if you signed on to that, you are political fair game.  We need to spend more time thinking about the rules of engagement for ourselves, including conflicts/appearance of conflicts, which law professors often discount.  The Oracle study: there was a lot wrong with it, but we need to spend more time as a community talking about disclosure and what constitutes conflicts of interest.  Arti Rai and I have had to disclose everything to serve in government, which is the cost of service [unless you belong to this Administration], and not everyone in this room would be willing to do that. 

We don’t spend enough time talking to people outside our tent.  It’s scholarly malpractice to write about something where people are alive and you don’t talk to them, e.g. how the PTO works, but we’ve separated ourselves so much that we are treated as outsiders. Spend more time talking to practitioners and interview them, as Silbey does.  The only way you’re justified writing only on the paper record is if everyone involved is dead. [This strikes me as an interesting thing to say right after we’ve just heard so much about conceptualism; I don’t actually have to interview Tam or his lawyers to write about the implications of Tam, so I take Hughes to be making a narrower complaint about when people write about the political economy of decisions, particularly legislative decisions.]

Yen: For some of us, this seems like our parents’ fight—CSUSA has been perfectly welcoming to academics. Don’t poison what can be done going forward.

Litman: the current barrage of abuse is less than a year old, so it’s not old news. [I would also point to the rhetoric at the 512 roundtables, which is less bad than the incidents Litman describes but not exactly welcoming.]

Feld: He’s done telecom and other fields, but IP is clearly much more poisonous than his comparatives.

A Celebration of the Work of Wendy Gordon, part 2


Harmless Free Riding by Wendy Gordon, Boston University School of Law
 (Additional related drafts from Wendy: Time and Intellectual Property After Coaseand Proximate Cause in the Law of Copyright: Linking Liability to Incentives)

Common law imposes penalties on those who harm much more readily than it requires people to avoid benefiting without payment; very few duties to help and lots of duties not to harm.  Foregone benefits don’t receive the same weight as harm done—which means that “do no harm” is not the same thing as “maximize wellbeing.”  Special deference to harm may be hardwired. We’re more “rational” when computing potential benefits.

When it comes to IP, this common law preference seems largely eliminated b/c most IP is about increasing productivity, rewarding beneficial behavior rather than penalizing risky behavior. Damages include lost sales but also lost licensing fees—internalizing lost benefits.  Don’t require harm to be proven. Particularly notable in TM: “if value, then right.”  Expansion in © liability too—now, for example, no economic motivation is required for criminal infringement.

What is “harm”?  Add up everything that people have rightfully (e.g., exclude stolen goods; removing those doesn’t cause harm), including things that they might not have a “right” to but do benefit from.  To harm is to cause a setback to a rightful interest. There should be a presumptive liberty to act in a way that’s not harmful, though that presumption can be overridden (and I think she also endorses vice versa: there should be a rebuttable presumption against causing harm).  Right wing libertarians think that only physical harm matters and only harms to people with entitlements to property matter, but she considers more kinds of harm relevant.

Foreseeability is a big issue with harm.  The clearest harm is diversion of current customers; the next version is copying but making money in a market you’re willing to exploit; least likely is where someone reaches a market you couldn’t have exploited or even licensed given privacy/transactional concerns.

Ultimately: thinks you have a weak obligation to pay for benefits you’ve received as long as you’re not made worse off (can pay out of the benefits you received), an obligation that can be overridden by other sufficient concerns.

Why do judges not care about harm? One reason might be that anyone else’s benefit—harmless free riding—is a source of inequality or envy.  Maybe envy is legally important because envy is a big driver of capitalism, for good and ill. Maybe judges ignore harm/benefit because they think of IP as a benefit-based field so all the usual constraints are off. Maybe judges don’t like free riding because it’s a threat to democracy when it means people don’t vote or don’t pay their taxes. 

It would be hard to persuade courts to tolerate harmless free riding, but we should try, and that will be easier if we understand why courts don’t like it.

Commentary by Rochelle Dreyfuss, NYU School of Law & Fred Yen, Boston College Law School

Dreyfuss: T-shirt cases: there is a premium for a T-shirt with a team name on it.  The surplus has to go somewhere, and the judge sees the team v. the guy selling the t-shirt and it’s not a surprise that the judge chooses the team. The court doesn’t see the guy as standing in for the public and the surplus being dissipated into the public.  Courts don’t like institutional litigation b/c they think they’re distorting—school busing, for example, pits particular groups against each other—but they don’t notice that IP cases are institutional litigation.  Courts can’t tell that surplus is being diverted from the public; they can’t tell whether the price is competitive, which would require several different producers competing to sell team t-shirts.  The same is true w/failure to appreciate the public domain, which looks like the place stuff goes to die. 

Need to vividly expose the courts to the public for whom the D stands, though that didn’t work w/composers etc in Golan and Eldred.  Patent cases: laws of nature aren’t patentable even if we know who discovered them—the benefit to the public is a cost to the creator.  Breyer gave an ode to the public domain: patents can discourage research, force people to avoid potentially good ideas. His concern about follow on invention hasn’t fully extended to other forms of IP. Why? Amicus briefing? Greater obviousness that progress depends in tech on using the work of others? Is romantic authorship an easier sell than heroic inventorship? Does patent’s other requirements (shorter term, examination, public disclosure) emphasize the public interest? Is the lure of new stuff enough to get judges to tolerate free riding?

Adverserial distortions could be minimized if potential users intervened, but we don’t observe that kind of intervention. If D wins, others will win anyway (nonmutual estoppel) so why bother?  That free riding is tolerated—why do courts allow it? 

Yen: Foreseeability is a real challenge when one wants to use negligence and similar concepts. It’s not a static concept in tort; it runs on a dynamic world in which things become foreseeable. If it happened, it can seem foreseeable that it would and will in the future happen.

What if we took “if value, then right” as seriously as possible?  Consider the ultimatum game. You must make a proposal to split; if you offer too little and the other person says no, you both get nothing. The rational amount to offer is a penny, but you can’t do that. Empirically, it’s closer to 30-40%.  There’s a connection here to a windfall from a potentially valuable unforeseen use of IP.  Suggests that society is in fact comfortable w/idea of windfall benefits but we would rather forego them unless there’s some sharing of the windfall in some way.  Could apply to the secondary user but also could apply to the people who end up owning valuable IP.

Envy but also respect is at issue.  A reasonable offer is a sign of respect. [I’m thinking of the work showing variations in the ultimatum game based both on demographics and on perceived desert through specific performance on a task.]

If we give rights every time there is value in a litigation, then we don’t necessarily correct a distributional wrong, because we’ve never asked the P whether she paid off all the people she borrowed from (though we may come closer in patent with examination etc.).  We could even let Ds seek offsets.

Gordon: patent law is not necessarily about corrective justice: since copying isn’t required, patent doesn’t trigger the idea of but-for contact w/P’s work, D’s work would’ve looked different.  That’s another thing that may protect patent from the dynamic she identifies more than ©.  Once causation is involved, it is vulnerable to expansion of what counts as causation.

Loren: narrative also matters: the expectation that things that are valuable must be owned. [But see things like the ability to read: processes or behaviors are often not subjected to the same logic.] Judges see themselves as authors; the © pull is stronger in that they’re less likely to be inventors.

Bone: Custom may also have a strong normative pull. Don’t need a harm/benefit distinction.

Hughes: idea of gleaning/leaving for gleaners (from Bible; appears in paper) is a double edged sword. In the tradition, it’s not inconsistent with ownership—ownership is required before you can have a duty or injunction to share with others.

12:00pm   Acquired Functionality by Pam SamuelsonBerkeley Law

At the heart of her work: functionality is almost as difficult as harm.  Gordon, in How Oracle Erred, deals w/functionality as limit on ©.  Gordon drew on Baker v. Selden’s explanation/use distinction. Copyright protects explanations; need a patent to control uses.  Oracle isn’t complaining about books that reproduce & explain the Java API, only about use of parts of the API to enable Google & Java programmers to write code. API is a tool for creation of new works of authorship—it is functional—and © should enable rather than forbid it. Likewise, Lotus wasn’t going after people using the command hierarchy in books about Lotus 123; it was going after competitors using the command hierarchy for functional purposes to enable interoperability so consumers could continue to enjoy the benefits of their investments in macros.

Pure Baker: © is never available for functional designs. Congress created two exceptions: software & architecture—but still recognized that functionality limits the scope of © protection in such works.  But what does functionality as a limit mean? Functionality can come from merger over time as users make investments in using a program. There’s more than one lens to look at Lotus.

There are many things born functional; channeled to patent/trade secrecy. After Star Athletica there’s less channeling, but still: if they’re inextricable from intrinsic utilitarian function, they’re not ©able.  Most ornamental designs for (as opposed to designs on) articles of manufacture in design patents would fail this test (or be too abstract to protect, as w/the beveled edge).  Various scope rules serve as functionality limits: bookkeeping forms, temperature recording charts, designs depicted in drawings not giving the © owner of the drawing any rights in making the design as depicted.

Indicia of functionality from case law: mechanically derived; dictated by function; systematic or methodical organization; necessary to objective or task; conformance to rules, logic; efficient design; incidental to carrying out tasks or processes (ABA claimed © in bank transfer numbers); constrained by health/safety concerns (SmithKline case about drug instructions where the generic drug was FDA required to use the same language on the label as the non-generic version; Bikram Yoga); Industry standard; affecting cost, quality, or effectiveness of design (trademark: Traffix). Fed. Cir. has a terrible functionality rule for design patents and used to have the same rule in trademark.  Some cases do recognize merger of function & expression in software: necessary for interoperability in game platform, accepted by Fed. Cir.  This is true even though the first programmer had choices about how to create the game in the first place. It was a constraint on games that wanted to interoperate: the merger occurred after the firstcomer’s choices.  Lexmark: had choices about printer software for cartridges, but Static’s chips couldn’t operate in the cartridges without the Lexmark code.  That is merger over time.  CONTU report recognized this issue as well.

Other examples of acquired functionality: Veeck v. Southern Building Code: once the city adopts a building code, the choices go to zero; there is no other way to express what the law is, so posting the code is noninfringing on merger grounds.  SmithKline: FDA approved wording, similar result.  Beck/Merritt Forbes—jury could decide that contract language/bond document was functional: if you want limitation on liability to work, it has to be written in a specific way, especially if a court has approved the language. Merger is one of the relevant doctrines but functionality is a useful label.

Could we be more precise about distinguishing expressive creativity and functional creativity, the latter of which should be channeled into patent/trade secret?  We can look at synonyms for expressiveness and functional creativity.  CAFC has to be wrong in saying functionality requires that there be no other way to do the thing, because utility patents routinely identify prior art ways of performing the same function.

Also occurs in trademark law: Inwood Labs.  Initially the colors of drugs may have been arbitrary/nonfunctional, but over time they assist patients in identifying medications and reducing anxiety over a switch to generic alternatives; useful to pharmacists in sorting drugs to fill prescriptions.

Gordon wrote about restitutionary impulses that create risks of overprotection, witness CAFC’s idea that Google just has to be made to pay for its use of the API. Free riding can be a good thing: 9 million Java programmers have invested in learning that API and created millions of programs that run on Android and other Java platforms. The Lockean proviso should limit IP rights: “enough and as good” must be available to subsequent creators; Sun promulgated the Java API to be widely used and endorsed distinction between no-© interfaces and © protectable implementations. When intellectual creations become standards, the public’s interest overrides the initial creator’s interests.

Commentary by Rebecca Tushnet, Harvard Law School

I assume I was asked to comment right before lunch because I talk fast.  Also perhaps because I have notes for a paper that has the exact same title as Samuelson’s, except my paper was going to be about trademark. And this amusing coincidence signals something important about the topic: it is about channeling between different IP doctrines. Functionality is our most well articulated (which doesn’t mean well implemented) channeling doctrine, and it is important across the areas of ©, TM, design patent, and utility patent.  Samuelson asks us to distinguish between expressive and functional creativity as a way to distinguish the distinctive subject matters of copyright and patent respectively, which might also help us think about different types of functionality in TM.

Functionality as a matter of necessity: link should make us think of various fair use tests that sometimes frame the issue as whether the defendant took more than was necessary, both in © and TM.  I’ve been a critic of the tendency to shove all tough issues into fair use, but the correspondences signal the presence of a pattern that needs to be handled by some protective doctrine: functionality as a separate doctrine focuses us on the desirability of channeling a claim into a specific IP regime, while a fair use defense in TM or © holds out the prospect of overlapping rights in the subject matter at issue in at least slightly different circumstances.

Lexmark poem hypothetical is the perfect example of necessity derived from previous unnecessary choices: the poem didn’t need to be the password that opened a lock, but having become so, the claimant’s own choices rendered the defendant’s necessary. Ties into Gordon’s important work on how some copyrighted works can change the communicative environment enough that a subsequent creator feels compelled to respond. That is, the Lockean proviso about having as much and as good left over is applied to a dynamic world, in which what’s left over changes depending on what the author created.
Implications for TM? TM already recognizes acquired genericity—a term like aspirin can enter the public domain as the name of a kind of thing, rather than a brand name, when the public uses it as the name of the thing.  Genericity and functionality are very similar and perhaps identical ideas: some things are preserved for public use even if that means some rump amount of confusion among people who think they’re privately owned.  Acquired functionality would be no different from this kind of genericity.

Samuelson’s work shows us that neither expressive nor functional creativity should be protected by TM, since both © and patent are separate regimes with different demands and constraints.  Specifically: With Betty Boop in the public domain, the creativity involved shouldn’t itself be allowed to serve as a source identifier for things on which Betty Boop appears—we see this handled various ways in the case law, from using Dastar to nominative fair use to the idea of aesthetic functionality to the idea that a song can’t serve as a trademark for itself but rather would have to represent some separate product or service in order to be a valid mark.  TM is going to confront this more often as well-known works resume entering the public domain. 

Expired © as one example of acquired functionality in TM; Terracycle in recycled Coke bottles is another: it’s functional because Coke comes in bottles of a certain shape, but it doesn’t have to be that way in alternate universes with the same rules of physics and even the same humans that we have here.

Functionality requires us to ask questions about timing.  Not all of Samuelson’s examples of functionality in TM are acquired over time—maybe better to say result of conscious decision: Inwood v. Ives, the functionality of a known capsule color is definitely acquired; the black motor that looks smaller because it’s black (Brunswick v. British Seagull (Fed Cir 1994)) isn’t acquired functionality in the same sense: it’s functional because of larger patterns of human perception which were known or knowable before the trade dress was initially adopted. Hot pink just couldn’t have served the same function if the original producer had chosen that color instead, whereas the Inwood colors were chosen initially with a fair amount of freedom. Justin Hughes has offered an interesting idea of aesthetic functionality that depends on whether a consumer preference preexists the development of the challenged design. His idea of functionality would encompass the black motor but not, without some further tweaking, the Inwood v. Ives capsule color for that reason.  Hughes adds in the idea that matching can be functional—a larger preference for things that match can justify finding certain kinds of designs, mainly but not always color, functional, at least as applied to durable goods. You need more than that to get Inwood v. Ives capsule color functionality, because pills aren’t durable goods, and a general human preference for consistency might not be hugely helpful in distinguishing the shape of the Coke bottle from the color of a pill.  And yet it seems hard to deny evidence that consistent pill color and shape improves medication compliance as relevant to the functionality of pill color and shape for generic versions of name brand medicine.

Broader question about Counterfactual reasoning: what are you allowed to change about the world in order to assess whether other choices were possible for the defendant?  Maybe not decisions of third parties like Boeing or a golf association that makes the rules for what equipment has to be shaped like. SmithKline/Drug labeling: FDA rules that mandate the adoption of identical language: a rule operating on all parties regardless of what choices were initially available before the P entered the market. Counterfactual moment as when the D seeks to enter the market because it’s the D’s conduct that interests us and that raises questions of harm and benefit.

Vetter: under this analysis, would translation into Braille for nonsighted access count as acquired functionality?

Samuelson: imagined it as using something exactly; adaptation is worth thinking about.  Are all things that constrain aesthetic choices functional? Not ready to say that, but the more constraining, the more likely it is to be functional.

Lunney: should functional mean the same thing across different areas of IP?  Utility patent has a different history than PGS works in ©.  Disagrees with RT that genericity is for words and functionality for symbols—the words Merry Christmas on a ribbon aren’t generic, they’re functional. [I guess I’d say that there is no difference in meaning or implications for TM law as between the two terms of art except that one is usually applied to words and occasionally symbols while the other is applied to trade dress/design, and to the extent that there is differential legal treatment of generic v. functional I don’t think there should be.]

Gordon: something can be both a fact and functional (that is, the content of the law). 

Samuelson: happy to say it’s merger, but calling the law a “fact” isn’t persuasive to a lot of people.