Tuesday, December 10, 2019

Content Moderation in an Age of Extremes

Belatedly, here is a link to the written version of a talk I gave last year, Content Moderation in an Age of Extremes, in which I note that the digital millennium lasted ten years, that strange apps handing out badges is no basis for a system of governance, and that it is hard to love in the time of content moderation.

Monday, December 09, 2019

Court fixes mistake: Rogers applies to nonfiction titles

IOW, LLC v. Breus, 2019 WL 6603948, No. CV18-1649-PHX-DGC (D. Ariz. Dec. 2, 2019)

The court quite properly grants a motion for reconsideration of part of its earlier opinion, correctly applying Rogers v. Grimaldi/Empire to protect the title of a nonfiction work.  Breus is a clinical psychologist, board certified in clinical psychology and sleep disorders, who studies how his patients’ chronobiologies effect their treatment, and has written extensively about chronobiology and circadian rhythms. IOW claims rights in various “WHEN”-related marks; the issue here is Dr. Breus’s third book, The Power of When; IOW claimed rights in that phrase.

Under Rogers, courts “apply the [Lanham] Act to an expressive work only if the defendant’s use of the mark (1) is not artistically relevant to the work or (2) explicitly misleads consumers as to the source or the content of the work.”  IOW argued that The Power of When “is a non-fiction, self-help book that is not an artistically expressive fictional work.” But nonfiction can be expressive. Under Gordon v. Drape, an expressive work “evinces an intent to convey a particularized message, and in the surrounding circumstances the likelihood was great that the message would be understood by those who viewed it.” The Power of When qualified.  It discussed “chronotypes” that supposedly explain when during the day it would be best to tackle specific tasks, based on a person’s particular chronotype.  “Given Dr. Breus’s creativity in developing and expressing his theories, categorizing and naming the chronotypes, and organizing the book, The Power of When is an expressive work worthy of First Amendment protection.” The court explicitly recognized that Empire rejected any requirement that an alleged mark have cultural significance before Rogers could come into play.

So, was there “artistic relevance”? The level must merely be nonzero. “The Power of When” [not the mark, but the phrase, despite some confusion in the court’s discussion] was “certainly relevant” to the book.  And was the use explicitly misleading? “The Ninth Circuit has been clear that the use of a mark in the title of a work, divorced from other explicitly misleading actions, is not enough to bar First Amendment protection.”  Plaintiffs alleged that customers had been confused, and that one of IOM’s team members “immediately contacted [an IOM principal] when she saw the book and asked if this was the same ‘sleep doctor’ who [they] had been working with[.]” That showed only confusion, not explicit misleadingness. “To be relevant, evidence must relate to the nature of the behavior of the identifying material’s user, not the impact of the use.” Without “an ‘explicit indication,’ ‘overt claim,’ or ‘explicit misstatement’ ” that The Power of When was affiliated with IOM, there was no triable issue.

The court noted that defendants’ promotional activities for the book were thus also protected by the First Amendment as an extension of their protected use of the Power of When mark. The Ninth Circuit has held that while “promotional efforts technically fall outside the title or body of an expressive work, it requires only a minor logical extension of the reasoning of Rogers to hold that works protected under its test may be advertised and marketed by name.”

Rogers/Empire also applied to the Arizona common law unfair competition claims.

Touting a paid-for report as if it were independent could be false advertising; public webpage was "advertising"

Pegasystems, Inc. v. Appian Corp., --- F.Supp.3d ----, 2019 WL 6560120, No. 19-11461-PBS (D. Mass. Dec. 5, 3019)

Undisclosed sponsorship of a critical report from an apparently neutral source leads to a Lanham Act/state false advertising claim, which the court here refuses to dismiss. [Side note: I am unduly charmed by the business name Pegasystems. Well done, namers!] Also, just as you don't have to show how many people watched an ad on national TV to show that it was "commercial advertising or promotion," so too with a public page on the advertiser's own site.

In May 2019, defendant BPM.com published a report, “Market Report: Analysis of Process Automation Investments and Total Cost of Ownership (TCO): Appian, IBM, and Pega.” Those three compete to make “business process management” software that helps create custom apps for business processes. BPM.com holds itself out as “the leading destination for research, white papers and community forums on BPM and process automation.” Appian commissioned BPM.com to publish the accused report, though this wasn’t disclosed to the public, and Appian highlighted the results on its website.

The Report provides its methodology on the first page: BPM.com sent out an online survey and received 500 responses. It then “eliminated any non-compliant entries, such as those from organizations deemed too small or from firms engaged in the sale, development, or specific services involved with this type of software.” It conducted follow up interviews to ensure that the surveyed customers were “verified end user organizations,” leaving 104 “verified projects,” of which 17% used Appian and 10% used Pega. Omitting some specifics, the Report concluded “Appian was distinguished as the clear leader” based on its low total cost of ownership combined with faster time to market.

Appian’s website allowed users to get the report, which it categorized as a “Whitepaper.” It summarized the Report as follows: “Through approximately 500 responses, BPM.com found that on average: • Appian customers build complete enterprise solutions 5 times faster • Appian customers use 79% fewer resources • Appian has more than 2x customers who’ve reached ROI in 2 years.”  It also created a webpage, “Appian vs Pega: Discover Why Enterprises Choose Appian,” with similar claims and linked to the report with a hyperlink labeled “READ THE 2019 BPM.COM REPORT.”

Without deciding that Rule 9(b) applied to Lanham Act false advertising claims, the court found that Rule 9(b) was satisfied. Appian/BPM.com were the who; the survey results and associated statements were the what; the Report/webpages were the where; and the when was “continuously.”

False advertising: Appian argued that Pega failed to plead sufficient dissemination to be commercial advertising or promotion.  Widening a smallish split on this issue—in the right direction, I think—the court found that it was enough to “target a class or category of purchasers or potential purchasers, not merely particular individuals.” “When Appian posted the Report’s findings on its website, it ‘target[ed] a class ... of purchasers.’”

Falsity/misleadingness: There were two misrepresentations: (1) failure to disclose the material relationship between Appian and BPM while presenting the Report as a neutral “white paper”; (2) presenting results as market averages without reflecting Pegasystems’ actual performance in the marketplace. Appian argued that the Report disclosed its methodology and didn’t claim to offer “generally applicable” comparisons between Pegasystems and Appian, thus wasn’t false or misleading.

First, it was plausible that the omission of the relationship between Appian and BPM.com rendered the representations in the Report and on Appian’s website false or misleading. Even without an explicit statement that the Report had been independently developed, that was the necessary implication of the presentation. Appian identified BPM.com as the Report’s author and then described BPM.com as “a leading market research group.” BPM.com states in the Report that its purpose was to “understand how automation software is being used.” “Nowhere in the Report or Appian’s statements promoting it would a reader learn that Appian was involved in the Report’s production — they would likely be left with the opposite impression. The allegation that the Report and website, when viewed in their entirety, are at the very least misleading is plausible because their description conveys neutrality.”

In addition, it was plausible that Appian made a literally false statement when it wrote that BPM.com reached the Report’s results “Through approximately 500 responses.” Only 104 were verified and analyzed and, of those, only 27% of respondents used either Pegasystems or Appian. The website claim about sample size was literally false.

If this was just misleading, Pega would need to show that “a substantial segment of [the Report’s] audience” was actually deceived. However, a plaintiff does not need to “identify the particular consumer survey that will be used to support its allegations to survive a motion to dismiss.” And it had plausibly alleged actual confusion. It alleged that “[c]ustomers have informed Pegasystems that Appian has distributed or drawn their attention to the Report. These customers have been confused or deceived by the false and misleading conclusions of the Report[.]” That was enough for Twiqbal.

Injury: Pegasystems alleged that defendants’ statements had been disseminated to “major customers for which Appian and Pegasystems compete,” representing “prospective revenue streams in the millions of dollars.” It was plausible that an explicit unfavorable comparison between Appian and Pegasystems was likely to divert those customers from Pegasystems to Appian.

False advertising under Mass. Gen. Laws ch. 93A survived too. Appian argued that the challenged conduct did not occur “primarily and substantially” in Massachusetts, as required by state law. Appian argued that, “where the relevant deceptive conduct involves communications between a defendant and third parties, courts have said that the ‘center of gravity’ lies in the state in which the communications occurred (i.e., were ‘published’).” This was an issue not suited for resolution on a motion to dismiss. It was enoguh to allege that the plaintiff was based in Massachusetts, the injury occurred in Massachusetts, one of the defendants is in Massachusetts and another has an office there, and the document at issue was created there.

However, the complaint didn’t state a claim for Massachusetts common law false advertising or unfair competition. Common law false advertising requires fraud upon which a plaintiff relied to its detriment; Pega was the wrong plaintiff for that claim. Likewise, unfair competition is about consumer confusion as to source, which wasn’t alleged here.

Commercial disparagement/injurious falsehood claims survived, even though commercial disparagement covers only falsity and not misleadingness and also requires actual malice (but not that the statement be made in commercial advertising/promotion).  It was plausible that there was falsity here. Although a representation in a study is not false simply because the study’s “design ... was flawed” where the disputed “article plainly acknowledged possible flaws and limitations with the methodology that was used” and the plaintiff did not allege that the author “inaccurately interpreted or reported the collected data,” the situation was different here.  Pegasystems alleged that BPM.com “manipulated its selection of responses and projects in order to create a sample favorable to Appian and detrimental to Pegasystems.” If so, it was reasonable to infer that the Report’s unfavorable statements about Pegasystems were based on skewed or inaccurate data and so were false. That would also satisfy the actual malice requirement.

Footnote: BPM.com might have separate defenses but did not assert them here.

Thursday, December 05, 2019

do retailers proximately cause the harm of false advertising? [what about of TM infringement?]

In Re Outlaw Laboratory, LP Litig., No. 18-cv-840-GPC-BGS, 2019 WL 6497883 (S.D. Cal. Dec. 3, 2019)

Outlaw is doing a pretty good job of establishing the previously contestable—and inconsistent with trademark law—rule that retailers aren’t liable for false advertising that appears on products they sell. One would think at least secondary liability would be appropriate, but Outlaw’s strategy has been to claim direct liability.

Outlaw, which makes sexual enhancement products, sued five independent convenience and liquor stores in the San Diego area as well as one local wholesaler, alleging a scheme to sell sexual enhancement pills, which contain hidden prescription drugs, and which they market as “all natural,” among other false advertisements including that the products contain “no harmful synthetic chemicals,” “no prescription necessary,” and that the products have limited side effects. The court answers no to the question “can a local retail or wholesale store that sells another company’s product, without independently advertising that product, be held liable under Lanham Act for any false statements on the product’s packaging?”

Defendants continue to sell the accused products, which are displayed on racks “at or near the checkout counter” without the use of additional, in-store advertisements. The FDA has issued multiple notices warning that some of the accused products contain hidden drugs, including sildenafil (a prescription drug found in Viagra), desmethyl carbodenafil (an analogue of sildenafil), dapoxetine (an anti-depressant drug), and tadalafil (a prescription drug found in Cialis). However, there is no evidence that defendants had “any role in formulating the challenged products or had any role in drafting the language on their packaging.” [Why are they still selling these products, given the risks to their customers?]

In a strategy that will be reminiscent of other plaintiffs in IP cases, Outlaw’s demand letters warned recipients that they were “selling illegal sexual enhancement drugs,” which “subject your company to legal action for racketeering...under RICO (Racketeer Influenced Corrupt Organizations) and the Federal Lanham Act” and obligate the recipients to pay to Outlaw “profits from the sale of Illicit Products dating back four years,” “Attorney’s fees,” “Punitive damages,” and “Triple damages.” The letters estimated the recipients’ liabilities at “over $100,000” but stated that Outlaw would “settle all claims in exchange for a one-time settlement agreement of [$9,765, in the sample demand letter] and your agreement to stop selling the Illicit Products.”

Some recipients acquiesced to the demand letter and settled with Outlaw. Others didn’t settle but removed the products from their shelves.  In the resulting lawsuits, Outlaw contended that defendants’ sales “caused Plaintiff to lose opportunities to expand into the male enhancement market, and fail to realize gains in sales.” A principal indicated his belief that some of Outlaw’s customers now purchase defendants’ products, and that the general consumer has “no reason to purchase [Plaintiff’s] products if they can easily purchase pharmaceuticals over the counter.” There was no quantification of loss or identification of specific customers.

The traditional Lanham Act defendant “is the entity or person that makes the specific, false statements at issue in the litigation.” Retail or wholesale stores are different, and “cannot be held liable...on allegations that they displayed and sold [other companies’ products] in their stores.” “In the same way that an internet platform is not responsible for the veracity of vendors’ advertisements, a retail or wholesale store cannot be found liable for false information appearing on the packages of the products that they sell.” The store must actively “misrepresent[ ]” the products or make a “false or misleading representation.”

Outlaw’s contrary cases were Gucci Am., Inc. v. Action Activewear, Inc., 759 F. Supp. 1060, 1065 (S.D.N.Y. 1991), and Grant Airmass Corp. v. Gaymar Indus., Inc., 645 F. Supp. 1507, 1511 (S.D.N.Y. 1986). But Gucci was a trademark case, and Grant Airmass speaks of “knowingly cause[ing] a false representation to be used in connection with goods and services in commerce.” By contrast, defendants here didn’t “independently promulgate[] a misrepresentation or false advertisement,” whereas in Grant Airmass the defendant “distributed and presented in commerce the allegedly false report,” assisted in the sales efforts, and promoted the product in speeches to staff, customers, and third-party organizations.  [The conclusion would have to be that “distributing and presenting in commerce” aren’t enough, at least without additional acts like arranging for the initial printing of the report.]

There was no evidence of independent advertising; the photos of the stores showed no ads by defendants.

Separately, Outlaw failed to show proximate causation of the harm, because defendants didn’t create the enhancement products, design their packages, or independently advertise the products. As a result, “it is difficult to see how merely placing products on display and selling them qualifies as conduct that caused Plaintiff’s injuries under Article III or the Lanham Act.” [Hey, TM folks. Note that this conclusion should apply to retailers of infringing goods even if the “commercial advertising or promotion” reasoning doesn’t.  How comfortable are you with this reasoning for proximate harm causation?]  The next language links the causation argument back to direct misrepresentation, though: the injury has to be “traceable to some conduct by the defendant which violates the Lanham Act,” which was not the case here.

Design Law Scholars Roundtable part 3

Session 3: Shaping an Overall Approach to Protection

Introductions: Jerry Reichman and Estelle Derclaye 

In what ways should different forms of protection be tailored to various types of subject matter (construed legally as forms of intellectual property, but also subject matter construed socially or commercially)? How, if at all, should we deal with concerns about overlap/cumulation of rights? Should the current procedures and institutions for granting and challenging the validity of rights be changed? Should we channel subject matter to certain forms of protection? If so, how should we draw the lines between different subject matter? Should we limit the scope of different rights so that those rights have different effects? Provide for different remedies?

Reichman: battle on concurrent protection has been won by France. Italy abandoned separability, which we adopted. If courts take conceptual separability seriously, it becomes the German test in disguise—but even the German court has now abandoned a test of superior creativity, so there’s only one test of originality in German law, which doesn’t require superior creativity.  From a legal perspective, concurrent protection is the de facto norm in EU law.

That said, he doubts that this is as important result as it seemed a decade ago. Because today, industrial designers are more inclined to seek unending TM protection. Even © protection remains iffy where form and function are fully integrated. In his view, role of sui generis design law today is to allow designs to acquire secondary meaning through use. When that demonstrably occurs, then the design can be protected indefinitely. The most ingenious pro design legislation anywhere is the EU regime of unfair competition law, prohibiting slavish imitation of unregistered designs for 3 years. Brilliant b/c in fast moving markets a successful design may acquire secondary meaning in 3 years; TM then takes over. Or it may have little/no further value on the market, in which case neither design nor © is of interest to investors.

That isn’t to say sui generis laws are useless, but they should be simple, easy to use, and inexpensive. To his mind, the best sui generis law was the PTO/© office proposal of the 1970s, attached to the draft act as Title II, but separated from the 1976 Act at the last minute on the grounds that it was anticompetitive.  We are stuck with design patent law, which expressly requires novelty, originality, though not nonobviousness and which is thus not fine under TRIPs. Courts in England and elsewhere have managed to complicate design laws so much that it no longer looks a ton better than our design patent scheme, but he still doesn’t know why we haven’t been sued.

Separability has become a farce in ©.  Imagined separability boggles the mind as framed in Star Athletica. The opinion is so meaningless as to require Denicola to make sense of it. Still a blemish on our law, b/c we exclude a bunch of designs from © and send them to design patent, but many can’t get design patents, which thus violates TRIPS.  Enacting a 3 year law as Title II might be the best option, even 50 years late.  That would stimulate our design industries further.

Estelle Derclaye: Overlaps are not bad per se. If there are different purposes, they are acceptable. Cumulating damages for the same infringement is an issue where the harm is exactly the same. © protection can be anticompetitive, where © extends (or is attempted to be used) where patent should be. E.g., you use the contract for software that you can offer b/c of © to bar the extraction of ideas from the program.  Or use of TM to extend a patent. Or overlap during same protection where the exceptions/scope of the regimes differ. TM/patent/design interface for shapes and other characteristics giving substantial value to the goods. Several ECJ cases have interpreted. Q: does the same demarcation apply to ©? She thinks it should. Not clear whether there is negative convergence such that only patents can protect these shapes solely dictated by function.  

Designer’s option to register design to cumulate: getting rid of community unregistered design right. That happened in UK, 2014 with its own design right—trying to minimize regime clashes. But if you do that at, you need a system which has a very well crafted registered design system. If you have a patent or © approach for registered designs you’ll have cycles of over and underprotection.  A design approach has to be neither © nor patent; EU is a good starting point.

Building on Ansgar Ohly’s proposal: need a rule for how you cumulate, including w/unfair competition. Imitation alone shouldn’t be banned w/o confusion as a cause of action under unfair competition.

Remedies: courts should consider the underlying nature of the harm and identify the remedy best designed to ameliorate that harm.

Sarah Burstein: Reichman is worried that designs can’t satisfy nonobviousness—but the Federal Circuit has removed constraints.

Reichman: the Fed Cir has improved it; but still, nonobviousness means that people don’t apply—the lawyers tell the designer there’s no chance.  [A lawyer who did that now might arguably be committing malpractice.] Pre Fed Cir, almost all design patents were invalid.  With the Fed Cir, the design patent system works. But even with a flexible nonobviousness standard, you’re not going to get much protection.

Burstein: the lawyers I talk to don’t consider 102 or 103 a serious bar and don’t counsel their clients that way. Not today. We know empirically that the number that are rejected is very low. The Fed Cir has made the test for hard to satisfy that rejection for obviousness is essentially impossible.

Sprigman: Examiners also don’t have the way to examine they need. Went through design patents for yoga wear. They didn’t even make a nonobviousness inquiry

Burstein: they don’t have the prior art. The examiners try, but it’s stacked against them.

Dinwoodie: state of law or practice?

Sprigman: both! The standard requires examiners to do something they’re not equipped to do.

McKenna: b/c nonobviousness is incoherent for design, the Fed Cir has made the standard impossible.

Sprigman: racerback bras: multiple variants have been granted based on narrowness/length of straps.

McKenna: agree not a meaningful bar, but trying to craft a workable standard.

Buccafusco: drop the word, but consider the concept: a judgment of similarity at some level of abstraction. No different from idea/expression.  So far, there has been virtually no abstraction at all; just a little bit of difference is enough.

Dinwoodie: every design system has a question like this: how much difference does there have to be? Reichman argued that utility patent obviousness didn’t work in a system that regarded incremental innovation as its object (design), but the framing: how different does this have to be to give you an IP right? Is a workable framing.

Sprigman: racerback bra straps—length and thickness would be normal variations. Two criss cross straps, you can patent three. That’s a problem.

Jason Du Mont: isn’t that just formalism problems?  The formalist test restricts examiners from using primary or secondary references in a way that would take that into account.

Dinwoodie: so would Reichman abolish design patents in favor of Title II design right?

Reichman: yes, replacing it w/© like regime. If Burstein is right [she is], then they’re no longer applying utility patent standard, which is what they wanted from design right. Is that enough to satisfy TRIPs?  He doubts it.  TRIPs reaffirmed the Paris Convention; a foreigner who doesn’t get a design patent because of obviousness should object.  

Sprigman: the standard probably fits now; there was convergence.

Dinwoodie: for that regime to work, separability must work robustly. 1980-2015 law was largely pushing stuff out of © is the other part of the puzzle.

Reichman: agrees. © office knew what it was doing with separability, but at that time separability was supposed to (a) be tough and (b) coexist with a design right.

Dinwoodie: Derclaye seems to want British law before we were forced to change. If you took a design that has © and apply it industrially, we then restricted your © to the scope of registered design.  Utterly compliant w/EU law but British IPO decided it wasn’t and abolished it.  Another provision of the law prohibited rights in the article via drawing of article; if you want that do you want unregistered design right abolished?

Derclaye: should abolish the Community unregistered design right b/c © does the trick. If you keep UK unregistered design right, the prohibition on getting rights in the thing from drawing of the thing is also good. Would change to election of remedies by choosing to make industrial use of a work. So you could use © without knowing you want design right, cumulation would be no problem, it would just limit the remedies/term you could get if you used © to protect what was actually an industrial design.

Buccafusco: Canada’s law is based on the old UK system. If you make more than 50 copies you have to switch to design right.

Ansgar Ohly: © and design law: Europe is a laboratory with all the possibilities that could exist—we’ve had separability, we’ve had 25 years for industrial application, we’ve had two different levels of originality (higher for ©, lower for design—need to meet a “museum test” for a design to get © protection). Now we have no idea: open Q whether French have won full cumulation or what the judgment means when it says there shouldn’t be a full overlap b/t design and ©, without providing any criteria for avoiding full overlap.

We find separability problematic—do you know what it is?

Designs and TM overlap: Article 4(e) says when a shape gives substantial value to the goods, you can’t register the TM, even w/secondary meaning. So what does that mean?

Dinwoodie: substantial value is unclear in meaning to him. British courts may think that if it is capable of being registered as a design then it has substantial value.  That would really exclude all shapes from TM.

Ohly: ECJ gave some criteria about design attractiveness: to what extent are features highlighted in advertising, and so on. But when a design becomes really well known as good, then it acquires secondary meaning and also may give substantial value to the goods.

Dinwoodie: there’s a gap between recognition and iconicness which isn’t quite recognized.

McKenna: but being recognized as a design is not the same thing as having secondary meaning.

Ohly: but they overlap.

McKenna: no, they really don’t.  Most widely recognized designs don’t have secondary meaning in the TM sense.  (Statue of Liberty, anyone?)

Dinwoodie: there is opportunistic framing by litigants, and the circumstantial evidence usually used might indicate both.

Du Mont: that’s the marketing function. We might not like that concept, but that was what they were trying to put their finger on: the difference b/t differentiation and secondary meaning.

McKenna: it’s entirely possible to be widely recognized as a design but not say anything about source as such. Eames chair: Eames designed it, but it doesn’t tell you all designs come from one source. But b/c we have such bad proof systems for secondary meaning they do overlap. 

Burstein: Dastar.

McKenna: Yes! Being recognizable as a work of design isn’t the same thing as source. 

Ed Lee: what we would do if starting from scratch for design: the system we currently have is odd and irrational to have overlapping forms of IP. Public interchangeably uses patent, copyright, and TM, and apparently so does design even though there are important distinctions we should be using. Traffix/Dastar type system to navigate the overlaps? Functionality tests are different. Remedies are also different: seems like you could elect statutory damages for © and disgorgement of all profits for design patent in the same case, even though you couldn’t otherwise get two forms of damages for the same conduct.

McKenna: remedies are very important: people who bring trade dress/design patent claims say that they want injunctions and damages, and TM makes injunction easier and design patents make damages easier, so it’s the best of both worlds for them. The Frankenstein monster system we have now is the result of many different forces. A lot of the overlaps are the result of deliberate attempts to expand certain types of subject matter b/c of perceived sense that other systems didn’t reach them—we have design patent b/c © and TM didn’t protect them, but then people tried to expand © and TM b/c perceived design patent didn’t protect them, and it worked. We have post-sale confusion b/c fashion is supposedly not protected.  That’s a different problem from the natural internal logic of a system inherently producing overlaps; the internal logic of the system is changed to make it look like a natural outgrowth but these were engineered overlaps.  That has ancillary effects on the operation of those systems in their traditional domains: manipulating TM so it can cover product configuration changes your understanding of what source identification is, what confusion is, etc. So we should ask how much damage we’re doing to the internal system in order to reach this area of overlap.

What are the practical solutions? Creating doctrines to police boundaries; that can be done different ways. Can exclude stuff from the system entirely (Dastar). We were stupid to incorporate product configuration into TM in the first place and have created all these doctrines to deal with the effects.

A sui generis system works only if you can identify its coverage in a reasonably clean way and exclude its subject matter from other systems.  The concepts have gotten blurred since Title II was on the table. Maybe this should be about “design of certain stuff” and not just “design.”

The linedrawing difficulty wasn’t inevitable outgrowth of the internal norms of each system, and we could productively rethink each core system.

Ohly: can the legislature anticipate these strategic moves? The EU unregistered design right was supposed to avoid that. 

Sprigman: the antitrust division of DOJ really didn’t like Title II. There is no evidence that these industrial designs need encouragement.

Felicia Caponigri: the leading case for fashion © in Italy was a case about moon boots; the reason court abandons the separability test is that it evaluates how iconic the design is and how it changed the evolution of the boot historically and culturally. Not saying this is correct, but when we think about overlapping rights, we may have to consider whether there are other areas of law that may be also affecting the definitions in IP law. Cultural heritage law, GIs, concepts of authentic/not authentic may be affecting ideas of copyrightability and nonobviousness. Expand horizons to other regimes.

Laura Heymann: courts are motivated by the sense that new subject matter should be in the regime.  Post-sale confusion (e.g. for Ferrari kit cars) is invented b/c courts think this should be protected, and they don’t yet have dilution. And then we get dilution formally later. There’s a sense that this is the right thing for the subject matter—how to address that.

Caponigri: the Ferrari, subject of the post-sale confusion case mentioned, was recognized as subject to © in Italy this last year.

McKenna: agrees too. If the D feels like a bad guy, the court may try to reconfigure the doctrine to get it. But that’s not the same thing as a straightforward application of the internal logic of the system.

Derclaye: the EC was trying to address the overlap b/t regimes with the unregistered design right, but naively thought that therefore © wouldn’t be used by designers any more.  In France, they are winning the most on different bases (unfair competition, TM, ©). Good intention, but left open the copyright/design interface and thus ensured cumulation.  Negative convergence for shapes solely dictated by function (if no mess is made by © reasoning in CJEU case on Brompton Bicycle) could do the trick.

Dinwoodie: the problem isn’t the Commission, the problem is the Court. The Commission left it open for Germany and the UK to do what they did.

Derclaye: well, they left it open for cumulation assuming that © would not be used. Na├»ve.

Buccafusco: we could do simple things to make design patents better: they could cost more; they could have renewals. But we might therefore push people into trying to use TM/© in scarier ways.  Trade dress cases over expired design patents: if we want Traffix for design patents, that’s great, but may also further push people into using other areas of the law.  Maybe we should treat design patents as not that scary, even though they are silly, compared to the other fields.

Burstein: will the line hold? Design law as safety valve. But it’s not clear that works—Europe seems to suggest not.  In litigation: if people think there are multiple claims, they are more likely to find liability.

Lee: it also matters that you get to go to the Fed Cir if you stick a design patent claim in.

McKenna: presence of multiple claims may let the courts approach the case in broader terms—may let you get away with weaker claims on each individual cause of action. Intent evidence may contaminate similarity analysis for design patent.

If you accept that courts in many of these cases that courts have a protective instinct, the most useful intervention may be to remind them that some other right is available. You don’t have to screw up TM law to get this; they can get a design patent. That’s one reason that destroying unfair competition as a separate doctrine has been bad: the existence of a lesser remedy was a safety valve to prevent TM from expanding. Booking.com: generic terms can be generic and there can still be a very limited remedy for passing off (Blinded Veterans). Reminding courts that just b/c the structure of a doctrine doesn’t cover conduct doesn’t mean that other doctrines don’t exist. Copyright expires for a reason.

Sprigman: but the grass is always greener for doctrines you don’t know as much about. Depends a lot on the structure of unfair competition law.  Antitrust law is one thing, but letting plaintiffs’ lawyers have free rein over unfair competition is also a problem.

Stacey Dogan: there’s nothing self contained about unfair competition law. To say it’s limited to passing off is descriptive, not normative.  The impulse to have unfair competition is itself normative, but the constraints on it (remedy is labeling only) are descriptive.

Mid-point discussants: Rebecca Tushnet

Balloon problem/grass is always greener problem: there is a rule about defamation that is a channeling device and it works a ton better than the IP channeling doctrines.  If you relabel your defamation cause of action—if the gravamen of your claim is for damage to your reputation, whether you call it intentional infliction of emotional distress or tortious interference with contractual relations or even trespass by deception—you have to meet defamation standards.  Smithfield Foods, Inc. v. United Food and Commercial Workers Int’l Union, 585 F. Supp. 2d 815, 820-21 (E.D. Va. 2008) (“[I]f a plaintiff seeks damages which are ‘reputational’ in nature, constitutional libel standards (i.e., falsity and actual malice) apply to the plaintiff’s damage claims. To allow otherwise would be to countenance ‘an end-run around First Amendment strictures.’ . . . [T]he label of the claim is not dispositive ….”). (TM is an exception to this b/c no one knows what goodwill means, but it’s only a partial exception given the limits TM law has placed on suing over criticism.)

We have a better idea of what defamation is for than what © is for, and US courts are strongly committed to a distinctive First Amendment tradition, so there’s definitely no slam dunk in making this difference stick. (But … if courts start to distrust causes of action, they can be pretty rigorous. Antitrust, RICO, even some TM claims.)  If you are really committed to what these doctrines are for, you can channel. But without consensus you can’t.

Carol Rose: Crystals and mud as a useful framing device?  Bad guys and sad sacks drive the change in focus of the law.  But we are at different points in the “cleaning up the mud” phases in different fields—©, TM, design patent.  This ensures that no crystalline rule can ever get established successfully.

The centrality of functionality: Star Athletica and functionality as the remaining limit. The potential dangers of saying it allows protection of functional elements (e.g. Buccafusco Lemley Masur piece): compare to the dangers of saying fair use is unpredictable. Courts may be able to do a lot with de facto and de jure functionality as in TM.

Relation b/t costly screens and biased screens in assigning the right in the first place: if there are thresholds, who will pass them (even assuming they have the money, which is also biased)? We have to understand that screens will disproportionately burden disadvantaged groups, although it’s also true that courts won’t be better.

Jason Du Mont: Might be ok w/a different functionality rule for design patent. Thinks of design patent as a baseline: if an innovation is going to go anywhere, it ought to be there unless it makes it into utility patent (or is in the public domain). Overlaps aren’t a problem in themselves. They tend to be problems of TM or ©.  History of design rights in the US: a pure gap filler, which was in the design patent system b/c Congress just listed topics with no conceptual coherence.

Registration systems: might require greater specificity. The Star Athletica © registration, for example, should have been better nailed down. That could contribute to resolving cases earlier. Not sure how to make that work in TM w/o getting rid of unfair competition.

McKenna: de facto/de jure functionality is not a strong distinction.

Buccafusco: that still means expensive fights about what is protectable and what is excluded. Everything is protectable and it’s about scope and it may all have to go to a jury.

Du Mont: © office has started rejecting things for originality.

Fromer: that’s mostly for logos—channeling to TM.

Du Mont: also rejected a float in the shape of a piece of pizza.

Dinwoodie: de facto/de jure could be used in interpretation of separability; could also be put into originality and idea/expression—102(b). Or are you suggesting a freestanding functionality doctrine? If we want a transubstantive functionality doctrine it might make more sense to do it freestanding.

RT: yes, could do it as a matter of 102(b) (facts aren’t listed in 102(b) but we screen them out anyway).

Derclaye: that’s what we do in EU.

RT: and these decisions are always made in context of a defendant who has done something: have they taken something copyrightable? So there will always be a comparison and functionality can be part of that.

Q: would aesthetic functionality count?

RT: yes.

McKenna: Fromer has made the point that courts have never taken seriously the Q of whether the intrinsic function of the article is anything other than to portray its own appearance/convey information—it’s very broad.  Discussion: There’s very little case law playing with aesthetic functionality and whether it counts as functionality in © (in © it can get deemed merger, scenes a faire, etc.).

Reaching consensus on the meaning of functionality is one thing; operationalizing it is another. Features are going to be aesthetic and functional at the same time. The question is where along that curve it has to be. TM says: if a drop of function, it’s out. Design patent: a drop of aesthetics, it’s in. Could have the same question about what function is and different places on the curve.

If you think of functionality as alternative designs available in the market, there’s no reason to distinguish utilitarian from aesthetic functionality.

Buccafusco: the amount we are scared of functionality has to do with the limiting functions of other doctrines in the field.  Functionality in ©, which is long and has limiting doctrines like merger, idea/expression, raises different issues. [Note that TM cases do say you can’t protect an idea with TM, though conceptually that puts the cart before the horse.]

Caponigri: aesthetic functionality as a protection against speech restrictions? People use these for communication.

Dinwoodie: Kalpakian says idea/expression protects freedom to compete, so it’s not hard to locate functionality concepts in ©.

Buccafusco: design patent cases essentially have idea/expression already: Richardson tool case; Ethicon.  Without saying so, the courts are saying that the design patent doesn’t protect the concept. Very narrow level of specificity.

Du Mont: push back a little: factoring things out is problematic.

RT: but substantial similarity is the exact same difficulty.

Du Mont: EU also does that with considering designer’s degree of freedom.

Burstein: Egyptian Goddess actually does a good job of that.

Buccafusco: we don’t necessarily know what’s going on in the field. But design patent data is available. One of the things we should be doing is figuring out what we’d like to know about, e.g., design patent citations. 

Burstein: the prior art citation is very bad; they cite URLs that then disappear.

Heymann: we also don’t know what’s happening in C&D world. Rules that change the effect of what people do before they get to court are more important.

Fromer: even w/registered TMs, it’s really hard to figure out what’s registered—how much on the register is trade dress? The coding is really bad! They don’t care about data consistency, maintenance, etc. We need to push them to code consistently and keep data.

McKenna: we’re asking for data about categories that have only recently been enforced on the law: trade dress as an ontological category is new and undefined—it’s all just stuff that wasn’t a TM, so there was no reason to distinguish packaging from configuration etc. The registration system reflects that—“trade dress” or even “configuration” is a recent phenomenon.

Dastar is a rule about channeling. Defamation is channeling based on the nature of the harm the plaintiff is claiming the defendant inflicted.  Most IP channeling rules aren’t like that. Dastar is an opening for that kind of channeling: if the nature of the harm you’re claiming is that people will attribute authorship of the content to the plaintiff, then that’s a © and © only issue. Would it be easier to configure rules around what the injury claimed is?

Dinwoodie: as RT says, the problem is that we need a coherent concept of the harm.

Heymann: misuse is a group of cases geared at the same kind of thing: you’re trying to enforce your © in a way that © is not for.

Mark Janis: note that the rhetoric of dilution crept into the Apple v. Samsung case—that’s not the kind of harm design patent is for.

McKenna: there was a dilution claim there too, and that may have contaminated the reasoning.

Burstein: that was also about gaming remedies; claiming they needed an injunction for the brand.

Du Mont: is it really a legit purpose of design patent law to let people acquire brand value?

McKenna: no!  Deeper Q: is the sharpness of the defamation rule coming from the fact that we really understand the harm of defamation and so can recognize a defamation claim whatever its label?

Dinwoodie: we can do better than subject matter channeling, but with less consensus on purposes of IP it will be difficult to get as clear as the defamation rule.

Caponigri: Is the harm of © infringement that there was harm to incentives, or is it a more Abraham Drassinower like theory of harm to expressive interests?

Burstein: SCt has said it doesn’t care about overlapping subject matter.

Sprigman: so shallow: how is design patent different subject matter than trade dress?

Dinwoodie: Kohler v. Moen says there’s a difference b/t an invention (faucet) and a sign (faucet).

RT: incentivizing different things/preventing consumer confusion as the cores of patent & ©/TM respectively?

Discussion about how this is a tough and abstact line to draw, and also law & econ has contaminated the idea of incentives. RT: thinks the Trademark Cases are nonetheless good law.

Future directions:
Dinwoodie: the role of transubstantive rules (the flip side of cumulation). Some of us think there are values to that, but we might think about the merits of such rules and design is a good vehicle for that Q generally.

Fromer: the extent to which we use the same terms differently in different fields—Burstein’s faux amis.

Derclaye: Overlaps and remedies. 

Sprigman: Unfair competition as safety valve. Specify doctrinal soft spots of each IP facets that could be eliminated in favor of a meaningful unfair competition approach, e.g. post-sale confusion. Catalog where unfair competition could be useful in solving/reducing overlap problems. There was a theory of unfair competition once upon a time; could that be recovered?

McKenna: people use IP claims to complain their markets have been disrupted; they also sometimes use antitrust or other business torts. Many of those state tort doctrines have recognized the soullessness of those doctrines and built protective doctrines: you can’t bring a claim for tortious interference w/o identifying a separately tortious act—you can’t just show competition. It’s not recovering the theory, but recognizing that we lost a useful tool and reconstructing it for current purposes.

Sprigman: antitrust’s standing/injury doctrines are meant to do that. It puts the plaintiff to an early showing that injury is w/in the zone of interests.

Dinwoodie: Lexmark as innovation towards a similar thing?

RT: Courts let TM claimants get away with standing/injury very easily [b/c we don’t know what goodwill is].

Buccafusco: should think of other areas of law that shape product design: disability law, transportation law, environmental law, etc.

Design Law Scholars Roundtable part 2

Session 2: Legal Protection for Design

Introduction: Chris Sprigman: what kinds of protection should be available depends on what the justifications for protection are. Incentives: requires us to ask about motivations of designers, the companies that employ them. Design of jet engines may not work the same as design of soda cans—worse than in ©, even. What are the fixed costs of design? Are they the kinds of costs that require longer term exclusivity to provide? There are some where the fixed costs are very low—where form and function are intertwined, we might want a first to market advantage. Ease of copying also matters; it’s not always easy to copy a visual appearance. E.g., car bodies; design patent and trade dress are available on the margins, but mostly not. There is some copying—trunk hump on BMW—but it’s relatively rare to copy car bodies. It’s not technical difficulty but they’re difficult to copy from a marketing perspective. Brands develop a brand specific design vocabulary; copying interferes with that message.

Fashion: first mover + TM protection for brand name is arguably sufficient b/c of ephemerality of designs. Another justification for protection: source identification. But that works against an argument that we should protect design through incentives. Relatedly: is a design an adjunct to a good, or a secondary good? E.g., a design of a computer may help, but the computer is also separately functional. The expenses of design may be defrayed by differentiating through actual functionality. Another factor: competition. Need some normative judgment about how much differentiation through design is enough or too much. Design used to extend period of monopolistic competition instead of ordinary competition, which is at least ambiguous in overall social effects.

Desert/natural rights arguments: labor/personality theory. Labor/desert arguments are complicated in design b/c design doesn’t involve rival goods/deprivation of the original creator’s physical outputs. Turns back into a question of incentives. Personality theory is even more confusing for design. Why mark artists out for their production as opposed to plumbers or surgeons? Surgical scars can be well/elegantly done, but we don’t treat that as an artistic claim. As producers of knowledge we tend to be more sympathetic to producers of knowledge, but most donuts are better than most poems. He can see the claim that a book reflects a person’s personality, but a computer screen design doesn’t speak in the way that a person does. It doesn’t express Jony Ives’s personality other than to tell you that he likes modernist design, as many people do.

Authenticity and narrative: a S. German furniture co. called Vitra, which has registered and litigated over a lot of IP; people go to jail in Europe regularly for trafficking in midcentury modern American furniture, where there are limited/no (what he calls bullshit) US rights.  Two stories about what it is doing: the obvious, ominous story—Vitra is just limiting competition, and the EU IP system lacks adequate screens. Design patents ran out but it claims ©, to which European © is open. Spurious claim to stewardship of these designs to exclude others from competition. Less ominous story: Vitra is engaged in a very deliberate propaganda campaign: an attempt to convince. Of what?  They call designers authors. Eames was an author! And we are the heirs to these authors’ estates in Europe. And these authors created what they created in a specific cultural context; an Eames chair has a backstory and a story about its cultural significance over time, and the kinds of architecture, paintings, carpets, music, that are associated with these chairs. What does that narrative try to do? It tries to change the nature of the good from an object to a story w/historical significance. They raise the price, eliminate competition, cut people out, transfer consumer surplus to themselves—but they are also giving something to people who can afford the chair: a chair with more narrative and thus more market value. Those w/o the money can’t experience the narrative instilled in the object. Is that socially good or bad? We need to balance what’s given and taken away.

GIs are the same thing; terroir is empirically nonexistent, but it’s a story of creating meaning in people’s heads. True of drinking Coke; true of luxury goods? Some counterfeits are close copies that will confuse, and there’s a straightforward story about those, but some counterfeits are very distinguishable and the theory of confusion, even post-sale confusion causing harm, is very weak. What we’re worried about there is inauthenticity—weakening of the narrative. Related to Barton Beebe’s observations about the sumptuary code, but it’s not directly about class but about control over the message (though it may cash out as class).

Laura Heymann: SignificantObjects.com—origin stories written by well known authors for store bought items; sold for $8000 when bought for $1.25 because of the stories associated with those specific iterations.

Mark Janis: Eligibility provisions: there’s a history of ex ante detailed legislative specification of product categories, and a second more abstract approach that uses the word “design” and throws in something about functional characteristics. Legislative categories approach: on the extreme edge, regimes specific to one particular product class, like Vessel Hull protection. Calico Printers act, and ribbon patterns, and lacework patterns—protection both sought and derided at the time. Vessel hull protection can be understood against background of © act and recent proposals for fashion design, which sought to provide a list—clothing, wallets, belts, eyeglass frames, but not shoes or backpacks. Clumsy way of conceiving design legally. First US design patent legislation: category-specific eligibility, some broad and some narrow: wool/silk/cotton fabric; bas relief or statute; and on.

Questions: These categories seem purely reactive to technological developments affecting ease of creating and copying designs, for example in the cast iron stove industry. Reactive to lobbying pressure from manufacturing interests. Started out planning to say that these lists are incoherent, but then there’s a certain kind of interpretive coherence traded off with other things—it’s perfectly coherent to track the categories that the British protected, as we did. Should we care about reactivity, or strive for a proactive legislative conception of what designs are in what regimes?

These are cumbersome—require response to shifts in tech, and require litigation over gaps in the list—are backpacks fashion design? Should we say we’d rather have ex ante thinking about these definitions and a legislative approach that limits discretion or leave it to common law?

Most modern regimes are more abstract: ornamental design for an article of manufacture, in the US; Community Design is a little less abstract but similar.  These regimes place substantial pressure on articulation of central characteristics—ornamentality, functionality, separability for ©. Burden falls on agencies and courts. Is there a false perception of coherence here? A risk of lost meaning? Design patent provision wasn’t written out of whole cloth, but derived from past practice including past categories. Thus, PMEP says design means configuration, ornamentation, or combinations thereof; would we get that definition w/o knowledge of past practices?

Initially thought maybe we shouldn’t try to define design at all, but compare utility patent law. It’s based on the concept of an invention, but not much work is done in defining “invention.” There are statutory definitions in the AIA/Patent Act but they’re recursive/very broad.  Defines the act of inventing in the service of rules of ownership, and that has relevance to design law. If design is concept than identity of designer is up for grabs. Similarly, priority of rights requires you to know when the design occurred. Finally, has mostly discussed eligibility, but eligibility considerations are intertwined with considerations of scope, and major fights in utility patent recently have been whether to do primary work in defining eligible subject matter or to do most of the screening work through doctrines of prior art and scope. Are we at the beginning of a similar debate in design patent in thinking about what constitutes a design/article of manufacture, which might be close to questions of nonobviousness in design/infringement.

Ansgar Ohly: EU design law is based on academics working at Max Planck. Child of its time: the mainstream in academia was to increase IP protection because there was a generation who grew up in a world with big gaps in IP protection. Very little discussion of justification, only gaps in present system/what designers need for adequacy, but not justification in the sense we’ve been talking about. Design approach: sui generis.  Design has a marketing function, not just an aesthetic function.  Reflects difficulty of locating design in IP system: beauty and functionality, © and patent, and also communication, TM. Why not just use those 3 systems? Supposedly to avoid overstretching those systems and unfair competition law. Low level of originality; many of these creations are obvious from utility patent standpoint, but making everyday things a little nicer or more functional is a different thing. And unfair competition law: if there was no design law, there’d be the urge to apply misappropriation.

Formal requirements: no substantive examination in EU law, and unregistered community design grants three years’ protection and only against copying. This was done for the fashion industry that didn’t want to wait for a registration. Two-tier system has a lot to be said for it: longer and stronger w/registration, shorter and weaker w/o. That might even be good for © if we didn’t have Berne.  

But it hasn’t kept its promise in practice. There isn’t as much litigation as one might expect for unregistered community design, probably b/c the alternatives are too attractive—© in France/Benelux, with life + 70. In Germany, Austria, Denmark, Poland, unfair competition is attractive. So one problem is that there is no election/exclusion rule. Question: is there a case for unregistered protection of design? Should these cases go to © or should we cabin it and make it shorter?

Substantive requirements: in Europe, partly similar to the US and partly different.  Has to be appearance; no standard of nonobviousness but rather individuality—a different overall appearance from the perspective of informed user. Not terribly demanding. Even small differences will be enough, as with Apple/Samsung: little bits of the iPad are registrable. But scope is correspondingly small; Apple lost against Samsung in EU b/c overall impression was so different that it got out of Apple’s narrow scope. You might criticize this. Recommended paper: We Wanted More Arne Jacobsen Chairs But All We Got Was Boxes - Experiences from the Protection of Designs in Scandinavia from 1970 Till the Directive, Focuses on Danish law but could be said of Europe—too much focus on packaging and little bits of, e.g., radiators. Functionality: “no design alternatives” used to be the test. Recent case, ECJ about functional design for welding, which said that the right approach is whether the technical considerations were the only considerations or whether aesthetic considerations also came into play, from an objective test—slightly broader. Should there be a functionality exclusion? Should we grant low level protection to functional shapes? That is the origin of the German regime—sub-utility patent protection for aesthetic models. What should a functionality exclusion look like so that form can follow function and still be protected by design law?

Spillovers from design to ©: key case in ECJ, Gstar against another clothes manufacturer. Are we allowed under harmonization to add additional aesthetic requirements to distinguish © from design law? ECJ says no. Originality is harmonized at EU level and there must not be additional requirements. But there must not be a full cumulation of rights. Legislature deliberately created design law so there must be something separate. But the ECJ doesn’t say what that something is. 

In design law, we take freedom of designer into account (jeans must have two legs, pockets) etc. If we are asking for originality in ©, are we likewise more generous when there is little scope for variation?

Pending © case about folding bicycles: Belgian court has to apply the ECJ ruling and decide whether this bike (which is completely inseparable and clearly just a bicycle) is protected by ©. Should more things be excluded under functionality doctrine under ©? We don’t yet know under European law. Should there be a spillover from design law, or should the standard be more robust. We have to harmonize the originality standard but what that standard is, is less clear.

Derclaye: Originality that is sufficiently identifiable is the standard.

Ohly: but what does that mean for an object? German courts would have said that a higher level of originality is required to distinguish it from other objects. Struggle is whether funtionality from design law should be borrowed for functionality for ©.

Derclaye: there was a utility patent on the bicycle, which expired.

McKenna: that should be game over!

Dinwoodie: problem w/European law is failure to exclude cumulative protection; the European structure, if it had been defined to avoid cumulation, might actually have been useful. If we focus on what design is and exclude other regimes, Sprigman’s formulation could help. Is there a definition that works for what design adds to non-design?  EU has huge protection and very low standard for individual character, but very few cases find designs both valid and infringed—scope is very closely tied to the threshold for protectability. If we have definitional ambiguity, one way to help is to be very careful to connect subject matter eligibility to questions of scope. That works if and only if you properly control the register system. No UK case has found validity plus infringement. But there’s a whole bunch of crap on the register that is unexamined, and that has chilling potential outside the litigation context. Substantive examination would be helpful. Then the EU model, of a right made to be focused on what design adds and excludes other regimes, with a short term unregistered right and a larger registered right, would make sense. 

Caponigri: Sprigman’s descriptions of authenticity/narrative seem to map onto justifications for cultural property. The public is involved in design—a type of conversation w/the public about the surrounding narrative/historical interest attached to a design. In terms of competition, can people compete w/that?

Sprigman: thinks it’s different from cultural property b/c state can promote that through education, museums, curation. W/Vitra an interloper has laid hold of a cultural artifact and annexes itself to it through property claims. The Eames chair is not European and not protected in its country of origin. Authenticity narrative that seems deeply inauthentic to him, and wrongly privatized. Private narratives [contradiction in terms?].

McKenna: you can buy the cultural narrative story about the design, but the move from that to single company ownership is the troublesome move. In what way does the cultural narrative get dissipated if other people are allowed to participate? Accessibility would seem to be a value.

Reichman: if you take it and just copy, you’re just an exploiter; if you add something that’s different, you ought to be able to protect that increment but you can’t claim it’s a cultural narrative then.

McKenna: for an increment of time. But it’s bizarre to claim infinite custodianship/ownership.

Dinwoodie: that’s what GIs do, albeit potentially exploitable by many producers in the region.

Sprigman: the argument would be that commodity competition gets rid of the incentive to establish, reaffirm the narrative—goods would be stripped of meaning.

Reichman: Trademark protection could work for that. The main function of design protection, for him, is to give you an opportunity to establish a TM and decide whether the investment is worth it. If you can’t get it in 3 years w/an unregistered right, don’t bother!

McKenna: In ©, patent, TM, we’ve seen shift from eligibility that is specific to eligibility that is abstract—from books and maps to works of authorship, from names and devices to anything that functions as indicator of source. This has created problems, substantially complicating the question “what is the protected thing?”  If I have to ID a book, I can do that. But if I just have to say “work of authorship,” it’s more difficult to specify claiming rules. We have pervasive problems, especially but not just in design, with claiming rules.

Dinwoodie: Batmobile case: what is the work? The court doesn’t really tell you, just runs through the different versions that appear in different iterations of the comics and TV and movies.

Fromer: Star Athletica: each of the 3 opinions identified the “work” at issue differently: a lot of mischief.

Reichman: maybe we need a derivative works right for design like we have for ©.

Ed Lee: we could also list things that are excluded from design patent, e.g. subject matter of utility patent. © office says short phrases, titles, logos are not copyrightable. Utility patent has exclusions too, though there are proposals to get rid of that.

Silbey: if the story of the production of the design tells you what’s protectable b/c of what was added, and insofar as the people doing design feel they’re adding something of value, they attempt to delineate the line between all the stuff that is part of what everyone uses/builds upon and the final result claimed as exclusive. Through that story of process, there is a lot that is/can be identified as public domain/tools. There’s a big disconnect b/t design patent claim and what designers imagine as owned/controlled by the process. Stories of authenticity (Sprigman) are for her one way of thinking about an anti-counterfeiting impulse. “Truth” that distinguishes some producers from others.

Sprigman: agree, but what does it mean to be “True” in this context? Eames chairs are mass produced consumer goods. What is the authentic chair? If it hews to the design, is that enough? There is no canonical Eames chair.

Jason Dumont: they talk about the quality of production.

McKenna: but that’s about consumer protection/understanding what they’re buying.

Silbey: a lot of things are packed into “authenticity.”

Derclaye: reminder that the limitation to appearance, as opposed to other characteristics, is an exclusion of some things/limitation on subject matter for design. Also it’s restricted to products, which may seem obvious but in the UK it’s “articles,” and that acccording to Laddie could include living things.  Handicraft/industrial product is a limit, though perhaps not a consciously chosen limit. Plants, flowers, limbs—all can be made to look different. Artificial limbs: article or part of a person?

In terms of functionality exclusions in EU: some academics think the functionality exclusion in design is more robust than that in ©.  Also there was a community unregistered design that was held both valid and infringed in one case (Landau?), though maybe no UK designs.

Mid-point Discussants: Sarah Burstein: EU’s definition is close to that of the USPTO, which is any visual characteristics embodied in or applied to an article—really broad.  Derivative works: the horror of considering it—Barbara Ringer discussed this in the context of copyright reform in the 1970s, and said that one reason design rights should be separate from © is that design shouldn’t have derivative works. But given continuations/fragmented design claims, in practice that looks a lot like a derivative work right, and we should talk about whether that is a good thing.

Euro-regrets: registration sounded great, hasn’t worked great; low originality standard sounded great, has led to a bunch of nuisance claims. But as AIPLA/INTA have gotten more attentive, they’re pushing for protection by registration worldwide, so we should write about that.

Short-term anticopying protection for unregistered designs: gives her pause w/o a clear idea of what we think is copying. Intent? Full duplication? Copying type rights might end up broadening the scope of the right.

Jonathan Masur: Design as not involving much of a public goods problem, per Sprigman; strikes him as correct. But what are the harms from design protection/deadweight loss? His intuition, with the weakest possible degree of confidence, is that static harms might also be pretty low.  One of Sprigman’s key points was that design is relatively low cost, and can easily be funded w/first mover advantage. If that’s true, there should be lots of relatively low cost substitutes available for any given design. Lots of high quality consumer goods are sold at relatively low prices: Target’s design reputation. Second, in many cases the social value of design might stem from exclusivity created by the design right itself. What makes the Birkin bag cost $10,000? If it’s exclusivity that creates the value, then there’s not a lot of deadweight loss from having it be exclusive. This assumes a sharp divide b/t design and functionality—functionality exclusivity creates lots more deadweight loss. So the key here is the line b/t protectable aesthetic design and functionality.  If we get the design right wrong (and they don’t really need to exist), our misses may not be socially costly if we don’t allow protection of functional designs. Mistakes about functionality are where deadweight loss will accrue.

Dogan: add in interoperability/path dependence. 

Masur: genericide as applied to design?  

Buccafusco: encouraging commercialization/dissemination of knowledge from utility patents: we don’t get that from design patents: these are articles of manufacture so they’ll be commercialized anyway and the design discloses itself, so we don’t get those benefits from having the design patent system. Downstream: they are at least incredibly narrow in their scope. Design patent law, following utility patent, has determined that its laughably low validity criteria are also equivalent to its infringement criteria—lower than © originality, but as long as we use the same thing downstream it’s not so bad. That makes him even more scared about derivative works rights. Substantial similarity is a broader standard than not substantially different (the latter being the design standard).

Dinwoodie: The lack of registration means you don’t have to define what is owned.  © issues: what exactly the musical work is came up in Led Zepplin case; also Star Athletica. More a European product, but also the US: if you allow partial designs, then similarity of one spoke on the bicycle is enough to arguably infringe. Focus on making sure that infringement inquiry filters out very aggressively things that are functional. Software is like design in tending to be incremental forms of innovation—maybe some lessons can be moved over. European approach requires a list of exclusions from protecting functional designs: must-fit, must-match.  Some of the European exceptions are effective, but others have been interpreted too narrowly.

Reichman: why hasn’t anyone sued us for violating TRIPs because our nonobviousness standard for design patent is too high, given the TRIPs standard of originality?

Burstein: we negotiated language that protects us.

DuMont: “or significantly differs” is language put in to protect us.

Reichman: you can’t stretch that to nonobviousness.

Sprigman: within design patent today, the actual standard fits comfortably w/in that.

Reichman: sees rejections/invalidations—they’re not being lax on nonobviousness.  Perplexed why never raised even in informal discussions, when there are often Qs about American TRIPs-inconsistent practice.

Burstein: visibly disagrees w/premise.

Dinwoodie: so many different countries have their own design standards; they have no incentive to fight on the issue.

DuMont: legislative history arguments over industrial property v. copyright originality standard—US says that “significantly differ” is enough for those who have a patent model like US, Japan at the time to satisfy the TRIPs standard.

McKenna: registration won’t necessarily help with the scope/definition problem. If you have a book, then the work of authorship is still an abstraction. Things like facts and ideas aren’t part of the work of authorship.

On design as low cost: that doesn’t cover everything we talked about this morning. If we believe that we need to define our buckets of design.  Deadweight loss argument also relies on assumptions about scope—he’s not sure that scope really does match the originality standard.  We see constant assertion of claims that seem bonkers b/c the scope analysis can’t be done until the end of the litigation. Also, the instinct that other designs are cheap and easy seems wrong to him—if true, then not much incentive to seek the rights, given how easy it would be to design around. There must be some reason design rights seem competitively valuable. It’s not just design patent: trade dress claims too. The assumption of easy designing around may come from valuing utilitarian functionality over design, but that isn’t the limit of what’s competitively important and may even be less competitively important than design.

Masur: should figure out the costs first and then what needs an incentive for design.

McKenna: instinct is that this would lead us to a list rather than to a definition.

Fromer: There are a lot of design/function interactions that are hard to disentangle. We see the same inventors on design and utility patents for the same objects and both can seem plausibly valid. Fusion of form and function is difficult to disentangle. Then design patent can be used to bootstrap claims of secondary meaning—the regimes overlap which affects the costs they impose.

Dogan: part of her concern for replacement parts is that consumers really do not know that they’re buying into regimes where they may be locked into repair/replacement from only one source even after paying the manufacturer for the original.  European law is much more explicit about protecting this concern.

DuMont: Europe also has parts of complex products exclusion where the parts aren’t seen during ordinary use.

Derclaye: looked at EU litigation: in fact, there are more unregistered designs asserted in litigation than registered ones. It’s because the scope isn’t claimed, like ©, so it’s not easy for defendants to know what the scope is until it’s litigated. ECJ has imposed a requirement of objectivity of definition on a TM claim, and even in © they’ve said that’s the rule but it’s impossible to do that w/o a registration. Agrees that not every type of design is low cost. Some designs require designer to take multiple factors into account to come up with the product. Much activity in the EU in registering designs; why are people doing that/thinking it’s worth the expense? Especially where the sector is crowded, and it’s harder to identify individual character.

Sprigman: not claiming all design is cheap; it’s just there are wide swathes where it will be. We tend to regulate as if these disciplines were inherently high cost and they’re not; even tend to go down over time. Why people are registering designs/patenting designs: the incentive story is complicated by activity that isn’t about protecting designs as such but as about protecting ability to differentiate a product—a TM interest, even though these things aren’t supposed to be for protecting distinctiveness, since TM has its own screens including functionality and secondary meaning/TM function that aren’t present in design. Cumulation = people aren’t disciplined about what they want, and why would they be? The law makes design one of the criteria for competition in areas where it might not otherwise be, because companies respond to legal opportunities. Have to decide the normative question of what kind of competition we want.

Caponigri: when something becomes socially mandated, is there now a need for competion to proved it? Whether it’s a standard way of making coffee or something else.

Dogan: Boudin’s concurrence in Lotus v. Borland—make it possible for a competitor w/a better product to enter the market by using the commands that consumers have been trained on.

Sprigman: scenes a faire doctrine could accommodate this idea. The minute Java became widely used the previously available options for declarations became unavailable. [Explicitly rejected, wrongly, by the Federal Circuit.]  Cape on a superhero: it’s not like superheroes were formed with capes. But it became widely enough done that it became standard for the genre, to the point that Incredibles made it into a joke about the genre.

Dinwoodie: though Boudin would treat this as a matter of fair use rather than unprotectability. In European TM cases, treating iconic design as giving substantial value to the goods = similar result.

Burstein: why are people getting registrations? Remedies, especially border enforcement in Europe, which people here really envy.

McKenna: parties mislead about the use of “distinctive”—they try to bootstrap “distinctive from other designs” into “distinctive as to source.” Study in China about a period where design rights aren’t enforced: shoe companies not able to enforce design rights invest more in the functional performance of the shoes. Relevant to what kind of competition we want. On the margin, design rights can affect investment.

Silbey: some designers say that designs converge on fundamental instantiations, like a phone with curved edges; they tend to think of that as part of the toolbox, but there were a lot of different instantiations at first until the design settled. Relevant to scenes a faire.

Sprigman: that can work with relatively short term rights, but if copyright eats this area then what then? We’ve stayed away from discussing Star Athletica because of the potential horror.