Trademark Scholars Roundtable, Stanford part 3

Session 3: Remedies in Trademark and Unfair Competition Cases  

Introduction: Mark Lemley, Leah Chan Grinvald Discussant: Laura Heymann, Eric Goldman  

[I had another conference in the morning so came in late.] Discussion of eBay’s effects. Burrell: In other countries the trend has to been add more and more remedies, extension of jurisdiction over intermediaries, etc.—US trend is not recognizable elsewhere.

McKenna: Lack of unfair competition has limited our flexibility w/r/t remedies; injunctive relief could be limited to font, presentation, other concerns.

Lemley: Increased use of counterfeiting claims may also be response to limit on remedies: a way to get out of eBay (maybe) and to get out of limits on damages/disgorgement.  Disgorgement other than replacing damages is a windfall to P: it’s money it wouldn’t have earned (b/c you can’t have double recovery) unless it is in practice just recovery for unprovable actual damages. Disgorgement as deterrence: if not limited to willful infringers, will deter some amount of lawful conduct.

Heymann: may also be for damage to reputation that we don’t think we can measure. [Though there’s no reason to think this actually happens in terms of reputational harm.]

Burrell: there are people who say that giving up wrongfully acquired profits isn’t punishment, so willfulness shouldn’t be required.

Lemley: it’s a differently calculated form of punishment. Treble damages might be more punitive, though they also may be less punitive than the gains from unlawful conduct, as in antitrust/drug cases.

RT: Irreparable injury: I see it these days often used as quick way out of a PI analysis when the underlying claim is weak. Analogy to 230: does it matter what the rationale  if the P was going to lose anyway? I think a reasonable answer is yes, but how it matters is up for debate. Making a bad case cheaper to fight actually has some value where otherwise costs will deter assertion of valid defenses. Cf. Lunney, etc.

Goldman: Equitable remedies: all facts are in play; Ps may not immediately and easily be able to gauge whether they will be able to establish all the requirements for injunctive relief, which makes it different and worse as a sorting tool than 230.

Mid-Point Discussants: Bill McGeveran: Notable that intermediaries will stand up for users in some circumstances, e.g., Fourth Amendment issues/tell police to get a warrant. [Though it’s less risky in that they don’t face severe financial penalties as long as they merely seek confirmation from a court about that, and they also may think that law enforcement demands/burdens on the platforms can be made more predictable this way.] Privacy by design as a potential model for TM remedies, remedial modesty. Easier online to find the people who need corrective advertising than if the ad had been a billboard. UX can be targeted. Also greater ability to monitor compliance, which could give courts more ease in ordering targeted remedies.

Jessica Silbey: remedies as ends of stories. They can tell us the moral of the story or what the story was about. Confusion in remedies signals confusion in what we’re trying to do w/TM law. Injunctions tend to broaden TM rights when they are broad. But no injunction at all seems like a gutting of the benefit. So how to inform courts/ think more specifically and concretely on choices w/in the scope of the injunction? Help them think about what they mean by goodwill. Money and control are the options: why is money not good enough/why do we go to control? Particularly relevant to TM. In patent/© money matters a lot; is it b/c there’s a consumer interest where the consumer doesn’t benefit if $ changes hands? If it’s about control, that’s a different way of thinking about the moral. Compulsory licensing remedy? Why is that uncomfortable for TM? What would a reasonable royalty be? Would a licensing remedy be likely to broaden the scope of TM rights in ways we don’t like, as w/the arguments over fair use?  Role of attorneys’ fees. In © cases, there are a lot of settlements that look like reasonable royalties + fees, b/c lawyers assume that fee shifting will happen if they get past sj. Need more empirical work on remedies to inform courts/policies.

In teaching, we could frontload remedies/teach them as front and center to help students understand their practical importance. We could help out w/amicus work only on remedies: think about the stakeholders who aren’t represented.

Dinwoodie: Old Kellogg litigation ended up being very much about remedies: there were multiple cases about what had to be on the box, what shape the biscuit could be and still absorb milk, and so on. Satellite litigation is a real thing when we talk about the burden of monitoring.

McKenna: compulsory licensing isn’t that different; look at how little we actually require for quality control in a licensing relationship. A lot of stuff that’s licensed, there isn’t any quality to control: these aren’t products/services w/any expertise in the licensor co. The value the licensee is getting is the value of exclusivity. It’s not about quality control, which could be baked into a compulsory license. It’s about the value of exclusivity.

Gangjee: Coexistence agreements as self-help remedies. Ends up working along similar lines, but may fool the public even though we allow it.

Heymann: property concepts: the affront of unauthorized use demands something of the remedy. Not just control of property but control of reputation/identity, at least for some TM owners.

Lemley: in real TM cases, cases going to what TM is supposed to be about, reputational interest and consumer interest align and should be protected by injunction. Not w/confusion w/o materiality. Rather not have those latter cases at all, but $ is less disruptive than control, so a halfway step would be to refuse injunction. Should we limit the alienability of those injunctions, then? Settling by allowing D into the market in exchange for $ suggests that it’s not really about control/reputation but really just about $.

RT: false advertising remedies are not always but sometimes tailored to figure out what the defendant actually can say. The solution space seems wider to courts as does the defendant’s interest in speaking truthfully. Look at those analogies.

Silbey: trade secret cases can require losing party to pay ongoing monitoring fees; maybe there’s a workable parallel there. Can imagine compulsory licenses as a reasonable thing if we’re worried about anticompetitive market exclusivity, but they could end up just extending the TM owner’s footprint. Tying losses to infringement: we estimate damages all the time. Why worry more about causation in TM than in other cases? Estimable v. irreparable seems like another axis worth thinking about, as does discrete v. ongoing behavior. Remedies should be as specific as possible.

Burrell: TRIPS prohibits compulsory licensing of TMs, though of course the US may no longer care.

Fromer: Gucci allowed Gucci Ghost to infringe: makes Gucci more cool by allowing it (though not allowing certain others). Uncontrolled use can sometimes be good for brand owners.

Diamond: Monitoring isn’t realistic in many cases. Go to Blinded Veterans website: there’s no disclosure. Is it b/c they just gave up b/c disclaimer wasn’t enough? Or is it that they’re now ok with the market and there’s no confusion/overlap problem?

Silbey: TM owners build monitoring into their own practices; the question is whether there are creative ways of shifting costs. TM owners get a lot of feedback from clients about possible infringements—monitoring is a partnership b/t audiences and owners. In some cases, Ds had to submit ongoing evidence of uses and how they change over time. So a T-shirt maker might have to submit new designs for approval. But she only found that in merchandising cases. Costs of monitoring might be different across types of cases.

Diamond: Across cases, the Q is whether people think it’s worth doing.

Silbey: there’s an expressive component to a judge saying it should be done. Trade secret monitoring doesn’t seem to be much enforced but hangs over employees’ heads.

McKenna: monitoring is a normal part of complete injunction, which says don’t use mark X or anything too similar. What is too similar is an ongoing Q. So court needs to pay attention to how it’s writing the injunction. There’s a difference b/t requiring “reasonable prominence” and requiring this font/this size. Happens all the time with settlements too. It’s a marginal additional cost.

Silbey: we could add clarity/predictability.

Gangjee: also happens with parallel imports/repackaging & rebranding required: you have to submit samples. So it’s already built into the system.