IPSC: Remedies and Creativity

Panel 24 – Remedies:

Thomas F. Cotter, Nominal Damages—and Nominal Damages Workarounds—in Intellectual Property Law

TransUnion v. Ramirez—FCRA case where D allegedly failed to use reasonable care and people were falsely identified as potential terrorists; sought statutory damages, but most Ps were unable to show that the info had been distributed to third parties. These Ps didn’t suffer concrete harm and lacked standing to sue. Congress can’t enact an injury into existence and can provide a remedy only for concrete harms, which can include intangibles like emotional distress if they’re recognized by the relevant body of law and proven.

Several modern-day remedies were enacted to reduce the risk that IP owners would otherwise be able to recover only nominal damages—reasonable royalties for patents; statutory damages for © infringement; disgorgement of total profits for infringement of design patents. These nominal damages workarounds are available without proof of lost profits or quantifiable harm to the D. Reasonable royalties are based on a legal fiction of a hypothetical bargain; can a hypothetical injury be concrete? He thinks the answer is mostly yes—history and tradition offer a meaningful guide to what counts as an Article III injury.

IP derives much of its value from opportunity to license, so it often makes sense to think of reasonable royalty as a cognizable harm. By contrast, elsewhere it might not make as much sense to think of the problem as a lost opportunity to license, e.g., the listing of someone as a terrorist.

Are these workarounds an appropriate response to the domain-specific problems or would reasonable royalties be appropriate across the board?

Basically, reasonable royalties are superior to statutory damages and disgorgement for public policy reasons. Inconsistency/predictability critiques could be applied to reasonable royalties too, especially in patent, but there are some ways to deal with that, and it might be easier in © and design patent where the damage awards are lower.

Are nominal damages appropriate where the conditions for the use of the workaround aren’t present? E.g., owner failed to register in a timely fashion and she doesn’t prove actual damages or entitlement ot injunction b/c infringement has ceased—is court obligated to dismiss the case for lack of subject matter jurisdiction? Patry says Copyright Act doesn’t permit nominal damages, but he’s not sure that’s right. Predecessor Act and Lanham Act both said/say nothing about nominal damages but courts sometimes award them. They aren’t a consolation prize for a plaintiff who fails to plead/prove actual damages; they’re damages by default. Suppose a patent owner fails to substantiate its damages theory with admissible evidence—the statute says “in no event less than a reasonable royalty.” Nominal damages are often a species of general damages. If there’s no proof, there should be nominal damages.

Are there any circumstances in which the award should be nominal or zero damages as a matter of law? Yes, e.g. where D would have been no worse off had it used a noninfringing alternative, at least where it’s possible to quanitfy the value of the difference b/t infringement and next best noninfringing alternative, though that might be harder in ©. What if D offers to manufacture/sell an invention but doesn’t follow up with sales? Some cases allow big damages for a hypothetical bargain. Without use, maybe there’s no reasonable royalty under the statute, which does speak of a reasonable royalty for the “use.” NPEs should be able to get reasonable royalties—no reason that a practicing entity’s lost licensing royalty is a cognizable harm while an NPE’s isn’t.

Are there any implications for injunctive relief? Before courts awarded reasonable royalties, in the 19^th century they sometimes awarded established remedies for the entire patent term, and there was no injunction because that was an adequate remedy at law. Courts usually awarded injunctions b/c that was hard to prove; but now it’s not a stretch to say they should just award reasonable royalties prospectively as an adequate remedy.

RT: Why is the paper about “IP” and not patent & © with a trade secret chaser? The analysis doesn’t seem as successful for TM, ROP. Related: if damage is an element of every claim under Article III then why are nominal damages ok? Aren’t they just the invention of an element of the claim?

A: Not sure there’s a principled basis for the distinction made for nominal damages—the majority in one recent case approving it was written by Thomas who of course dissented in the TransUnion case. History and tradition is an important consideration in determining when courts may award nominal damages.

RT: Which is particularly weird for patent because that seems to be saying that the common law [not legislatures] get to decide what is a harm, but there is no common law patent (and common law © is a very different thing than statutory ©).

Matthew Sag and Pamela Samuelson, Hysteresis: An Empirical Study of Copyright Injunctions After eBay v. MercExchange

In 2012, study found eBay ignored/ineffective in © cases; cited in only 11% of cases; applied in a cursory way; continued to grant injunctions at high rates. Maybe it took some years to take effect. Reviewed about 70 cases in which injunctions were denied; there are patterns. Hysteresis: it takes time for changes to propagate through a system.

Collected 330 cases 2000-2019. There are a lot of easy piracy cases where it just wouldn’t matter what the standard was, you’re going to get an injunction. Overview: eBay was never as poorly cited in cases where it would be likely to have an effect as the early literature would suggest; it’s now better cited (around 50% in nondefault cases; citations to eBay or its progeny start out at 40% and jump to mid-60s). One category: in nondefault permanent injunction cases, the citation level hasn’t increased, but that’s because it was always strongly cited in that subset. There are fewer successful injunction Ps, and that category has increased, showing evidence of delayed effect, except for where preliminary injunctions were concerned where the drop was substantial and immediate. Grants bounce around from year to year; weirdly, the permanent injunction grant rate goes up immediately after eBay, then goes down and down. In preliminary injunctions, the grant rate goes down immediately, even before Winter. At the same time, number of injunction cases are going down, while damages claims aren’t going down at the same rate. There is an apparent selection effect where Ps aren’t pressing injunction claims as aggressively.

Why such different results from Liu’s 2012 study? Did a full replication study b/c didn’t have access to Liu’s data on reported cases (506); we found 86 using that methodology, 29% of which cited eBay. It wasn’t really based on reported cases, but unreported cases that were available on WL and Lexis. This really matters because those cases were chock full of easy cases padding out the decisions, particularly unreported default judgments.

Takeaways: if you had the view that eBay didn’t affect © cases, you can’t hold that view any more. Or empirical studies, you really have to think about the difference between easy cases and hard cases, label cases carefully, and think about mechanics of legal change. Don’t believe everything you read! Don’t extrapolate from everything you read. If our study had included unreported cases, we would likely report much higher rates of injunction.

My reaction: hysteresis is very plausible in general—after the TMA and its explicit statutory command, we’re still getting cases citing eBay in TM/advertising cases and that’s just a matter of diffusion of knowledge.

Jorge Contreras: Other people did say that there were big changes in ©; that was always his understanding. Reported/unreported cases are complicated—there can be value to unreported cases, as in the patent world. And they matter to practice. Maybe benefit in reporting both sets of results and explaining why you think they differ.

Panel 23 – Creativity and Culture:

Amy Adler and Jeanne Fromer, Memes on Memes

[Came in midstream b/c of other panel attendance] Memes further blur the commercial/noncommercial distinction, as well as the idea/expression distinction [snowclones!]. With a meme, the expression becomes the idea. [I think this might be a characteristic of images that memes bring to the forefront]. Memes move faster than life +70—they become stale in months. Selective enforcement is also huge—everyone can use the meme except a few targets. Decentralizes authorship: the work becomes what’s important b/c it spreads, decontextualized.

How could © respond?

One possibility is do nothing, but leaving it alone is a bit dangerous. Could shift norms, and that could be bad. Another possibility: go down the attribution route. But it’s very impractical in this context. How do you attribute things that keep changing and shifting? Another option: tailor © to new realities of meme culture. Selective enforcement feels much more troublesome from a free speech perspective when you’re disallowing only a few people from use.

Jennifer Rothman: the disallowed use is most likely to be fair use. Reducing term would also be much harder than making other changes like attribution. [I think those are different and both significant kinds of “hard”—the former is political, the latter is in enforcement/implementation]

Madhavi Sunder: Is this new or part of the broader critiques we’ve had for a long time?

Fromer: the paper goes into this; there are strands of this throughout © but tech makes copying that much easier and the rise of the visual also has had a real impact.

Adler: also, looking for the author of a meme is, in a way, folly.

Madhavi Sunder, Intellectual Property Is Theft!

Began career celebrating appropriation—e.g., appropriation of Indian stories to tell new lesbian narratives. Still thinking about it, but in different ways now. Cultural appropriation and racial justice: as a place of redress and potential remedies, as with the Washington Football team. Social movements brought down brands that TM law couldn’t. George Floyd’s death had implications beyond criminal law [RT: perhaps only beyond criminal law and not within it, unless something changes about qualified immunity]. Dispossession of Black intellectual and physical labor—history and continued source of our nation’s wealth as founded on expropriation of racial minorities. Racial capitalism: defining resources from Black communities as nonproperty and free for the taking. Reparations claims have moved from property to IP.

Of course, “art is theft,” as Picasso says, and there are arguments that culture can’t be owned. Has agreed with those values and impulses, but trying to hone in on when cultural exchange crosses into misappropriation or theft. Trying to create a definition that does more than focus on taking of resources from one culture to another, but starts with Ijeamo Oluo’s focus on exploitation by a more dominant culture. W/o that, cultural appropriation becomes much less harmful. And there’s distributional harm—redistributing benefits of innovation away from subordinated group.

3 kinds: cultural degradation; misappropriation; racial capitalism.

Cultural degradation: understanding relationship b/t representation and structural racism. Jim Crow, before it came to be the moniker of structural racism, was a brand. A created minstrel character in 1830: the performer happened on a disabled older Black man; was taken by the man’s movements and created a character mimicking/mocking him. Racist brands have continued despite the Lanham Act’s bar on disparaging marks (until invalidated in 2017). People feared that would usher in racist marks, but huge culture shift occurred instead. Navajo Nation’s litigation to control designs as marks—offers possibility of better control (in litigation against Urban Outfitters).

Misappropriation: Traditional knowledge/global fashion brands taking designs from indigenous communities: a lot of pushback from culture ministers around the world. Asking not just for credit but for partnership. And the old idea that artists can just take what they want is under attack. Such borrowing often happens with “blithe thoughtlessness, creative entitlement”—that’s what’s being called out now. Cases brought by collectives against Neiman Marcus, other fashion proprietors: what’s being taken is the work of individual artists. Using © and “cultural appropriation” as a legal claim; case was settled.

Racial capitalism: how to contend w/appropriation that occurs when culture only becomes valuable when mediated through white performers. Copyright in dance—claim for © in the Carleton dance was rejected, but Beyonce’s choreographer received a copyright in popular dance choreography and has started a firm to help young choreographers get power over their art, has talked about “authentically Black” dance and art and wants to protect that against Fortnite and other exploitation. Controlling dance might be an important place to start affirming Black voice and body, taking back what minstrelsy appropriated.

RT: intersectionality: guessing you don’t now object to the Indian lesbian stories; does race have indexical priority here? [Also, I’m again going to recommend Ashley Mears’ Very Important People, which is about how women’s beauty capital is valuable only in the hands of men.] Concerns about whether move from tangible to intellectual is just another way to keep resources out of the hands of the poor—who gets hired to create is still largely determined by who got into a well-known college, and so middle and upper class Blacks are the face of continued appropriation from poor Black communities.

A: yes, focusing on power, both within and among communities.

Trevor Reed, Restorative Licensing

Tribes/mascots are examples of wins against cultural appropriations. Trying to identify IP rights and ways to remedy violations. Judicial colonialism makes it difficult for tribes to enforce their own rights structures. We don’t have good numbers on quantity of Native American creations being used by other institutions w/o their permission. What we do know: a significant number of settler institution holdings likely are within the subject matter of tribes’ IP laws. Bootlegged recordings, looting, graverobbing, acquired from someone not authorized to transfer IP. While most institutions don’t adhere to tribal IP laws, there’s nothing inherently inferior about them; tribes are separate sovereigns and Copyright Act is silent about preemption of tribal laws.

Johnson v. M’Intosh—indigenous sovereignty is held inferior to colonizers’ sovereignty, based on outdated assumptions about race and culture. Have to use federal IP or other law to make claims. NAGPRA is the prime example recognizing right to demand return of patrimony taken in violation of tribal law. Can also enforce law when there’s entry onto tribal lands, but most appropriation is off the land. Institutions have also started to take private action to recognize tribal IP. Different standards, some of which recognize tribal interests overriding IP defaults, some of which balance, some of which don’t recognize tribal interests. Some acknowledge harm; others appear motivated by efforts to increase inclusivity or limit liability. Some require consultation w/tribes before making indigenous IP available; some require repatriation where gathered illegally or w/o consent; others only allow input on whether materials are culturally sensitive, which reflects institution’s view of what tribes should be concerned about.

Violation of tribal IP laws is not just an ethical matter. It is experienced by indigenous individuals and their communities as a violation of the law. Judicial colonialism makes it difficult to enforce those rights in settler courts; restorative justice may provide a framework for resolving claims.

Columbia U decided to take responsibility for misappropriating tribal music. Many of their collectors had violated tribal laws. Went to communities to understand what the harms were and what expectations the tribes had for Columbia to make them whole. Shame, embarrassment, psychological issues that result from disclosure of private material to public: Boy Scouts performed material outside tribal control; record labels made ceremonial sounds available to the public. Bad public policy resulted from having lives depicted w/o authorization. Community closed more now b/c of fears of unauthorized rampant appropriation. Children being confused about right source of knowledge in the community. Community wanted enforcement of their own IP rights and structures.

How do we repair the harms of the past and meet the expectations of communities going forward? Extend tribal jurisdiction over specific cultural materials just as state and federal IP law governs. Institutions must learn tribal IP laws; provide restitution to the community for violations of such laws; police themselves going forward; maintain contacts w/tribe to ensure correct administration. Many institutions are willing to interact though not clear they’re willing to subject selves to liability.

What about patrons/general public? Restorative justice doesn’t talk much about the community surrounding the offender. The real concern is not the institution, but the entities using the institution’s resources. Restorative licensing framework: bring the institution, patrons, users under the tribe’s jurisdiction. Exercising jurisdiction under nonmembers could be tricky, but can be done with contractual provisions involving choice of law, conditional licensing as with EULAs limiting uses to those allowed by tribal law. Repatriation of any copies for violation.

Chris Buccafusco: Who is the tribe for these purposes with older materials? Eastern Band of Cherokee may have different approaches than two tribes in Oklahoma. Possibility of race to the bottom about who has the right to license things.

A: could recognize tribes as constituted now, or religious authorities w/in tribe as subgroup having sovereignty. Could be that Eastern Band has separate jurisdiction. Timing and way tribe settles that could be helpful.

Betsy Rosenblatt: Restorative justice framework seems useful and valuable for beyond tribal sovereignty and to other conceptions of differing norms bases. So thinking about negative spaces: if/how this is different from other norms-based subcultures. Calls for legally enforceable licensing attached to these processes seem to require more tangible/concrete links.

A: key question: what’s the justification for treating these materials differently? There are groups trying to create their own sovereignty, like Creative Commons [I thought he was going to say the “sovereign citizens” movement] [BR says that CC requires contractual privity]. We’re talking about dispossession. Were it not for judicial colonialism, you would have to obey tribal rights. [In the US, you don’t have to obey British IP rights to the extent they conflict with US © law and/or the First Amendment. But I take the argument to be more that, if there weren’t a US, we’d be living under different tribal legal systems entirely. But would those systems really look like current tribal law? That seems like a big reach, since other nations have also settled on various consensus ideas about IP—even to the extent of a couple of mandatory exceptions and limitations. There is not international consensus about most issues relating to traditional knowledge. In the hypothetical, have the nations joined Berne? Lack of full sovereignty has insulated tribes from many of the political pressures that would otherwise be brought to bear by IP industries—the RIAA/MPA don’t lobby them because they don’t have to. (Compare what happened when pharmacos tried to use the tribes for patent laundering.) I think using the sovereignty argument as a way to distinguish the tribes from other groups is in some tension with the argument for using restorative justice because of the violations to which the tribes have been subjected.]

JohnJohn Uket, Transforming Policymakers into Innovators in the Civil Service of Developing Countries

Nigeria as example: head of civil service/bureaucracy adopted mission statement to provide professional and efficient services that are responsive to citizens and other stakeholders. But this isn’t possible w/o innovation in civil service structure.  About 90,000 civil servants in Nigeria. Many struggles, including low overall trust in government. Innovation struggles in government which has a more rigid operating system which emphasizes stability, certainty, and predictability. Requires leadership: openness to incremental and transformational ideas from inside and outside the structure. Openness to risk as well as feedback—fear of risk means nothing happens. Human factors are key to dissemination of innovation and that has to be understood before success.

Q: Consider path dependence literature too.