Trademark question of the day, Harvard edition

 When I was younger, I had a shirt that had VE RI OLD in the traditional Harvard shield configuration. The local burrito place just rolled these out, and I love them:

COVID-related communications are ads where they tout D's services

Steven A. Conner DPM, P.C. v. Fox Rehabilitation Servs., P.C., 2023 WL 2226781, No. 2:21-cv-1580-MMB (E.D. Pa. Feb. 24, 2023)

Conner is a podiatrist who uses a fax machine at his practice for treating patients, primarily as a communication destination for incoming lab results. Fox offers a variety of physical, occupational and speech therapy services in the form of house-calls to patients; it receives patients through, among other things, referrals from doctors.

The question was whether eight faxes that Dr. Conner’s practice received from Fox during the early days of the COVID-19 pandemic were illegal junk faxes (“unsolicited advertisements”) under the federal Telecommunications and Consumer Protection Act of 1991.

Each fax contained the headline “Helping Flatten The Curve With House Calls.” Fox’s defense was that, with the healthcare system in disarray, Fox wanted to reassure its partners and providers that Fox was open for business and its services could be counted on. There was testimony that, in the early days of the pandemic, many of Fox’s referral sources had reached out to Fox asking for information, and that Fox was primarily seeking to inform providers that Fox was adhering to existing COVID guidelines. The costs of the fax campaign ultimately came out of Fox’s informational technology budget because of its internal status as an information communication.

Out of the roughly 20,000 recipients, less than thirty requested Fox to stop sending such faxes. Two healthcare office managers testified that they had received Fox’s faxes and found them to be very helpful in assuring their own practices that Fox remained open for business, was comporting with COVID protocols and was “taking steps to bring additional services to my attention.” They also testified that they did not see the faxes as advertisements because the faxes “weren’t trying to sell me something” and they “state things helpful to my practice.”

The TCPA defines an “unsolicited advertisement” as being “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission, in writing or otherwise.” Dr. Conner credibly testified that he did not give permission to Fox to send the faxes. “Liability must be based on an objective standard—neither the intentions of the sender nor the opinions of the recipient factor into the equation.” The Third Circuit has also stated that courts can spot illegal junk faxes by considering if the advertisement has “profit as an aim,” if it promotes a discount or price, if it comes with a sales contact, or if it contains “testimonials, product images, or coupons.” The FCC has also defined non-offensive fax messages that contain only “information” as opposed to commercial promotion: “[F]acsimile communications that contain only information, such as industry news articles, legislative updates, or employee benefit information, would not be prohibited by the TCPA rules.”

The court held that the larger context of the pandemic wasn’t part of the objective test for what was an ad; the “reasonable recipient” standard “considers only that material contained within the four-corners of the fax.”

The court held that it was clear

that all eight faxes are promoting Fox’s services in a way that suggests … Fox is trying to secure referrals from providers. The faxes tout a specific “model” of care used by Fox and which Fox describes as high quality and unique. While the faxes certainly describe capabilities of Fox’s services as they pertain to dealing with the challenges of COVID, that is still a promotion of quality and not solely and informational exercise.

Even the first fax, which posed the closest question, was not just informational:

[W]hile the majority of the fax message appears to be on the informational side, it still promotes qualities of Fox’s proprietary “house call” model, trademarked and therefore presumably proprietary of Fox. The bullet points describe the quality of Fox’s services—even though these descriptions are within the context of dealing with the challenges of the pandemic, they are still promoting the commercial quality of the services offered. Here—and with the other seven faxes—there is an embedded profit motive to gain referrals from past providers, because the more referrals Fox receives the more revenue they are hoping to receive from the patients’ insurance.

Subsequent faxes went further, promoting the proprietary “Fox Model” for treatment of patients and going beyond just informing the recipient that was open for business or even that Fox was adhering to COVID-preventive protocols. Having a middle informational segment that would be fine on its own didn’t change the advertising nature of the whole fax. Promoting new capabilities wasn’t just “informational,” even if they were health-related.

The court also rejected a First Amendment challenge to the TCPA.

But the court didn’t find willfulness entitling Conner to enhanced damages; “Fox’s witnesses were credible when they testified that their intent was to inform their past referral providers of their additional COVID capabilities, not to gain referrals in spite of TCPA restrictions.”

 

Fourteenth Trademark Scholars' Roundtable, part 3 (Evidence)

Changes in Trademark Law and Evidentiary Rules

Introduction:   Jake Linford

Before courts admitted surveys routinely, they were concerned about hearsay. Sometimes rejecting surveys seems like judicial notice—“cola” as generic; the court doesn’t want to hear contrary survey evidence. Some objections go to the weight of the evidence.

Instead of surveys, can we look at things like Google results or large text databases reflective of use in a particular community? Comicon case: corpus linguists filed a brief trying to establish how comicon was used prior to the first San Diego Comicon; court didn’t find that persuasive but shows possibilities of use. You can get a sense for what the use of the putative mark was like at first use, if your data are rich enough. If survey evidence isn’t at the right time (Coach’s claim of fame in the Coach case), corpus evidence might be able to fix that problem. Skeptical that it could help w/confusion though.

Brain scans for consumers? New article proposes judging similarity—he’s very skeptical both of cost and whether it tells us anything [we don’t already know]. What about ChatGPT? Skeptical of that too.

If courts rely too much on dictionaries, the corpus evidence might create a wedge b/t judge and dictionary.

Barton Beebe: How to integrate this into a larger rethinking of competition? At the origin (in technical TM times), confusion wasn’t the harm sought to be addressed; confusion was the evidence of the harm sought to be addressed, which was trespass to property rights. What would it mean if we said TM law is primarily concerned with promoting competition: what would a survey look like for infringement? [Unsurprisingly, I say it would have to consider materiality.] Would secondary meaning surveys change? Maybe not. But would consumer uncertainty play a role in our understanding of how preventing confusion promotes competition?

Earliest surveys—1921 Coca-Cola v. Chera-Cola, used as a matter of course a Q including what we now call a Likert scale, measuring level of certainty. So did 1923 survey. Then we lost that, especially w/ face to face interviews. Surveys became trinary: yes/no/unsure—pushing people to a yes/no answer. Most people are not really sure! These surveys are now designed to suppress that uncertainty and not let it appear in the courtroom b/c we just want numbers.

Imagine 20% confusion in a survey, but everyone was only somewhat sure, while 80% are not confused at all and are absolutely certain. If you present that nuanced distribution, maybe 20% isn’t enough b/c of the large number of correct consumers. We urge introduction of that next level of detail to that.

Also, materiality: this is a way to consider materiality in the rubric of uncertainty.

How do we survey for arbitrariness, fancifulness, suggestiveness?

Discussant:      Mark Lemley

Maybe corpus linguistics can help w/things like descriptiveness and nominative fair use, though skeptical about confusion or fame (b/c you need a standard). Corpuses are attractive b/c the alternatives are so bad: Surveys are infinitely manipulable; dictionaries have an opposite goal to that of a statutory interpreter—to cover possible meanings instead of correct one and so they are abused when used in legal settings.

Rogers is a rule of evidence; its goal is to replace the cumbersome, problematic LOC multifactor analysis with a rule that irrebuttably presumes no confusion except in limited circumstances. [At least the 9^th Cir. version.]

One possibility: what if we required or at least said a presumptively admissible survey was X—could be drafted into court rules. If we did that right, we could get rid of a lot of fighting back and forth and manipulation and problematic Qs asking about permission. We could standardize minimum percentages, affected by Likert scale. Could also give us an idea about what heightened confusion is—having a standard would allow us to actually heighten the standard in Rogers cases, which generally don’t actually do so.

Statutory presumption of secondary meaning after five years of exclusive use: it says literally that the Director “may” presume this. There’s a nice naïve literalism that would say the PTO can do this but courts have no power to do so: if the PTO hasn’t so presumed, courts are not in a position to do so.

Incontestability: maybe we ought to have reverse incontestability: if I’ve been around for a certain period of time, we presume that I’m not interfering with another TM owner’s rights. Goes beyond laches; would require killing Dawn Donut, which is an additional plus in his view.

We might think about a TM anti-SLAPP provision.

Fromer: Deciding what we’re going to measure + how do we use a new tool—new questions arise with each new type. Corpus linguistics: consider fame. Is fame use of a word in a particular context a sufficient amount, or is it that the word is only used in that context? We’ve never asked that before! How do we know whether the use is shorthand for a class and what that means [what the Google court called synechdoche use]. Sometimes survey formats get standardized by default, so it has to be very thoughtful.

Grynberg: TM right now only has limited concern with mental availability for confusion; courts normally talk about confusion even though TM owners want to control availability of mark and surveys may be measuring that. On Likert scale, a person w/high recognition and low certainty may be reflecting a belief in what “belongs” to the TM owner.

Heymann: efficiency/cost trades off with accuracy in surveys. People are notoriously bad at reporting on their own mental processes and that’s what we’re asking them to do. [especially with “why do you say that?” where they just guess.] In UX, we don’t ask people how they’d navigate a website; we watch them do that. So we could construct a mock situation where we ask people to make choices and derive from that whether they are confused or not. Choices instead of thoughts.

Silbey: companies invest in those already!

Sprigman: could be a Squirt test with context.

Heymann: but actually ask them to perform the selection task, not just report on what they think they’d do. We’d have to think about whether hesitation counts.

RT: [Want to strongly endorse Fromer’s point: Measuring almost always changes what the construct is—you are answering a different Q than the non-surveyed or non-corpus analyzed question; the survey and the corpus themselves answer different questions (what do people say in response to direct Qs, sometimes after training, versus how do they talk when not thinking about it?). Maybe it’s a better Q, but that needs to be identified.

UX point: 1-800-Contacts: 10^th Circuit says look at clickthrough rate to find maximum possible confusion—possibly there’s opportunity to focus more on this.

Past work on how people walk around in a fog of confusion: Jacob Jacoby did this work in the 1980s—20% of people misunderstand any given factual claim in advertising! They walk around confused about sponsorship b/c of their priors!

How to survey arbitrariness/TM function: Washingmachine.com in booking.com—maybe along with not sure we also need the option “neither a common name nor a brand name.”

Lemley’s proposed standardization: (1) Burrell’s caution yesterday that they standardized badly, including about permission; (2) Teflon is a pretty standard format, but questions always arise: (a) original Teflon survey used STP as a well known brand name; wouldn’t do that now; (b) take a look at FOOTLONG surveys, both of which were Teflon surveys w/essentially the same Qs but different training and testing examples. 14 point swing in FOOTLONG results—which might even seem reassuring about the general tenor of the answers since even manipulation didn’t change a ton, but it was a lot.

McKenna: we have substantial standardization in Eveready, Teflon, Squirt (garbage, but much less common), but there’s enormous variability introduced by stimulus, control, universe, and those are extremely hard if not impossible to standardize. What has happened in TM is fetishization of confusion for its own sake: confusion is itself the harm. So one goal is to push against that construct: things in the context of survey evidence need to connect to marketplace behavior, and certainty/Likert scales can help with that.

There’s a strain of marketing literature that uses scanner data: tries to measure effect of brand extension on parent brand. And mostly they don’t unless the products are used together; consumers just segment. Marketing studies: what TM thinks of as related products, TM is much more expansive than consumer behavior—things have to be really close together for consumers to care. Mental state is relevant, but it is relevant in conjunction with behavior.

Linford: if we’re right in our empirical work that supposedly tarnishing uses often have a burnishing effect, what are firms doing when they challenge those uses?

Sprigman: don’t assume firms are rational: they think it’s theirs!

Linford: firms do try to figure out what marketing decisions will work [but there is a difference between the expertise and methodology of the person who does that at P&G and that of the person who does that at Gucci—this is an example of high fashion possibly distorting our analysis of other things].

Ivorine tooth-whitening gum & Ivory soap—the court didn’t think that, as Ivory claimed, you could brush teeth with soap; court looked at survey responses and heavily weighted the “I don’t know” responses against Ivory.

If we’re looking for marketplace harm, that is looking for confusion—but in theory under current law we should be looking for the likelihood of marketplace harm—evidence of likely changed behavior. How would we do that?

Sheff: You could have rigorous standards about substitutes and cross-elasticity of demand that could lead you to the proper universe for a given survey. But one reason you think competition is good might be a deep suspicion of private economic power, so anything that adds friction to that is good. In that circumstance, neither universe nor stimuli selection might matter very much; even confusion might not matter very much. We could do things like market share analysis—but TM might not try to prevent copying others’ TMs in general.

Ramsey: standardize by requiring Qs to separate out different kinds of confusion?

McKenna: courts settled on a low percentage b/c this was about an injury to the TM owner, and the Q was what we should care about. Thinking about injury to TM owner as not the only Q could let us consider, as Sprigman argues, the benefit to the other consumers (85% even) who have benefited from the new option and would have to face loss of the information they got from D’s use.

Fromer: things change over time: marketing channels mattered more when the multifactor test was initially propounded; this makes standardization a challenge (what do we do with increasing brand self-parody?).

McGeveran: as antitrust swings back towards power containment and holistically about efficiency in the whole market rather than whether a particular merger is efficient, that could change how you think about TM’s competition goal.  The narrative about market concentration and power and the ways in which tech creates bottlenecks instead of long tails suggest productive TM inquiries: when we say “competition” in TM, it’s no longer clear what we’re talking about. New market entry opportunities? Competition on store shelves like with private labels? How does TM contribute to the shape of the whole market?

Bone: TM has always been about protecting sellers and avoiding fraud on the public; fraud reflects a moral wrong. Our reconfiguration has to take those into account.

Mid-Point Discussants: Eric Goldman

Antitrust is not a model of empirical evaluation at law, but empirical evidence does matter across consumer law—formation of TOS. Does a link to a privacy policy provide effective notice? One court says a reasonably prudent smartphone consumer knows that an underlined blue link is a hyperlink—that’s just made up; no survey evidence or consumer testimony, no literature. Chances are the judges are not themselves reasonable smartphone users. So much of what we talked about today are riffs on broader consumer law cases: what do we know and how do we know it? Emoji evidence: courts are just, again, making it up. A “good” emoji evidence case includes a statement from law enforcement saying “I’ve worked this beat and I know how they talk.” That’s the best evidence they use (and it’s bad!).

Chris Sprigman: need a way to account for consumer heterogeneity, which is almost always what we see under the hood. Different from saying that consumer belief is sovereign/a trump. Vintage Brand case: court asks whether consumer belief about sponsorship/licensing should be taken seriously or should be considered a legal conclusion about licensing. This isn’t wholly empirical.

Stabs at a theory of competition: start w/ preferences. We’ve been agnostic about them for a while, removing moralism from competition. One form of private differentiation is as good as another; we don’t question why consumers want something. But: Producers enjoy more surplus in differentiated markets; consumers enjoy less. The response is that consumer surplus lost in the form of price is gained in the form of differentiated preferences being satisfied more closely. But is that true of a manufactured-by-marketing preference? To say that in a room of economists is to risk being called an idiot, but that doesn’t mean it’s wrong. People’s valuation of attribution depends on the frame—they value it more if it’s an entitlement and less if they have to pay for it. This isn’t super hard, but the response from economists is “who cares?” We set a legal rule, create preferences, then satisfy them. We forget at the end of the day that the preferences only arose from the entitlements created by the legal rule. This is unsatisfying. The neo-Brandeisians say: the market has an organic existence, which is not about people being induced to have preferences, but manifesting them. That’s too innocent; people are convinced into preferences all the time—but a highly engineered preference might not be as important to satisfy. If we were to use that model of competition in TM and designing surveys, we’d look for what would cause consumers to substitute—focus on source primarily, and we’d need some sort of materiality requirement either as an element of claim or a belief about source strong enough to undergird a choice in the market.

Need more coordination about surveys, outside the context of particular cases. Judges and survey experts need to be able to interact in ways that make accepted surveys more credible.

TM surveys should be more incentive-compatible—in © has done incentive-compatible experiments where people buy & sell things—these are more reliable b/c people don’t tell you what they think but show you what they do—their incentives and their behavior are compatible. Correct answers should benefit participants more than incorrect one, which simulates the real world better. Even if it’s getting the right chewing gum, something small is at stake in the real world.

Robert Burrell

Looking behind curtain of preference satisfaction: it’s very difficult to convince courts to do that. One possibility: makers of Nurofen pain range were fined AU$10 million for having misled consumers for selling the same product as different products for, e.g., period pain with huge price differences. But Nurofen still has a massive price premium over generic ibuprofen: is that ok? We need other examples to move the dial.

Double identity as a solution to evidentiary challenges: it is in Art. 13 of TRIPS! He’s a fan of it for goods cases—seems to cause relatively little harm and acts as an escape valve for the property intuition: it defines what the “property” is. It doesn’t work so well for advertising! Advertising can convey all sorts of nonconfusing messages, so we need robust defensive doctrines to prevent undue harm in advertising, but there are ways to design that.

Evidentiary problems exist everywhere, though they vary across jurisdictions. When we look at what’s actually happening, we see courts getting really uncomfortable w/certain evidence but we don’t use that to ask more general questions about the quality of evidence. Particularly UK and Singapore, acquired distinctiveness is a reliance standard for at least some forms of TMs (trade dress)—don’t provide evidence of use, show me that consumers rely on this to make decisions. The move to failure to function and away from acquired distinctiveness might be a similar rule of evidence—we don’t trust the usual proxies. But if we don’t trust them in trade dress, why do we ever trust them?

In Australia, occasional examples in which proxies for secondary meaning are regarded as unreliable—e.g., consumers had to buy a thing, as when everyone had to buy a set-top box to transition from analog to digital. Massive sales aren’t enough to prove consumers care about manufacturer—similarly with hand sanitizers and masks. But we don’t ask similar questions about shoes, soap, rice, even though those are staples in the modern world.

Evidence of actual confusion: sometimes ignored b/c wrong sort of person is giving answer or answer is so manifestly wrong. Anyone who thought Nike would make toilet cleaner had an extreme and fanciful reaction, according to SCt of Australia. Anyone who thought McDonald’s would make wine was operating under an erroneous assumption.

Maybe consumers aren’t good at explaining their responses not b/c of problems in articulation but b/c that’s not how they make decisions! Might be worth looking comparatively—he previously thought German TM law loved surveys, and that’s true for distinctiveness in general, but not in likely confusion cases where they are verboten. Lack of trust plus commitment to normative view of likely confusion. But the effect (answering Lemley Q) was to broaden rights.

What about marketing experts? Do they have specialized knowledge, or are they charlatans? Australia has debated that as well. Ongoing question of admissibility of Wayback Machine evidence. Every now & then, more in the UK than Australia, courts just assert things about how people shop. And damages are often just asserted. At quotidian level, there’s just a plague of fake evidence—e.g., invoices. In light of that, a narrow property rule makes more sense; otherwise you should have to show real harm.

Silbey: to demand TM have a theory of competition is to displace the consumer as sovereign in terms of what evidence matters. We’re not measuring systems; these are private rights of action.

McKenna: but we structure private rights of action towards systematic goals all the time—what counts as secondary meaning, w/in TM.

Silbey: if it’s not a market for lemons story, it’s a consumer sovereignty story. All these tests arise out of and are reified at a time when the story about what’s optimal in a market is a view of advertising as beneficial/creating the best kind of consumer market.

Sheff: evidentiary rules depend on the theoretical structure. Is a deceptive used car dealer competing fairly? Why does it matter that he be honest? The problem is the seller has information the buyer doesn’t—that’s a form of power that we think ought not to exist in consumer markets. Why do we think that? It’s not b/c it’s inefficient to allow asymmetric info to be used, but b/c we have a thicker theory of autonomy underlying market structure. [McGeveran: or both!] Theories that are quite different can converge on certain aspects of regulatory structure.

But the interesting thing is how we choose when they diverge. If the problem of used cars is that falsities will cause markets to fail, then some critics said to Akerlof that if he was right there should be no market so he must not be right; the response is “this market is worse than it could be.” That’s a comparative claim. We could take care of the market for lemons if we forbade all ads and required plain packaging. [I don’t think that’s true.] Why would that be worse than the market we have now? We have some substantive notions of freedom and autonomy, including in commercial behavior, that shape our idea of the appropriate comparator market and what type of regulatory regimes are preferable which then informs what types of evidence count.

Lemley: There’s a perfectly good information story: bad information makes markets less efficient and decreases purchases. You don’t need a new theory of TM.

Sheff: by the same token, there’s an efficiency story about branding; if we only care about efficiency we’d have a lot more regulation of persuasive advertising than we do.

RT: (1) Anti-ESG movement/anti-DEI movement—think not just about progressivism but about challenges to preference formation from the right. What interventions into the market are justified because preferences are currently distorted? Who is distorting preferences or at least affecting formation of preferences in way they have a vested right to do? If that’s the wrong framing, why is it the wrong framing?  

(2) In response to FTC actions against “results not typical,” industry mounted defense of “results not typical” for weight loss products: consumers are buying hope—even small chance might be material depending on circumstances, which pushes back on the Likert scale?

(3) double identity and advertising: note that in the US comparisons for house brands are often made on the bottle or package!

(4) False advertising has similar theories to those discussed by Burrell in the US: misleading v. misunderstood; puffery and no reasonable consumer would believe that e.g. Froot Loops have fruit in them.  Also there are now two cases accepting the Nurofen-style deception theory in the US.

(5) periodic reminder that registration is not actually consumer focused. If we thought of the US as at least half registration based we would have to say that it’s at least half about competition. [Lemley says that registration might not be about competition either, but it’s at least closer.]

McKenna: the choice is not between satisfying preferences and not, but which preferences we will have and who will satisfy them. There is no neutral position. Economist move: it doesn’t matter where the preference comes from—that is actually a sneaky way of prioritizing certain preferences, since different preferences would have emerged under different rules. Pretending there aren’t rules around who got to shape those preferences is itself deceptive.

Dogan: economists are also rethinking things. What do we do about the fact that medical professionals buy generic drugs but uninformed consumers, often poor/resource-constrained, buy the brand names. So their behavior probably doesn’t match their preferences in some other world—but with what do we replace revealed preferences?

We also need to understand what’s happening within the 85% of unconfused consumers—it may not be a loss to them; it may mean nothing to them.

Gangjee: Registration system is focused not really on consumers or on competition—by and large it’s a different project [I describe it as businesses ordering their own relations]. There is a morality for that. Historically, there was a moral account. If our drive is to more normative account, it’s a hard thing to get right. First UK TM act: no registration for word-only marks at all—totally normative belief that words had multiple uses. Retreat from normative system over time. It was not competition, but availability to producers of words to use to speak—very interesting different vision, replaced by distinctiveness over time.  

Fourteenth Trademark Scholars Roundtable, part 2

 Session 2:        Responding to Anachronisms

Introduction:   Mike Grynberg

VIP may tell us a lot about what the potentials are. Incrementalism: read Lanham Act along with other things like its common law foundations and First Amendment principles—not empty formalism; recognize normative component of TM. Semi-autonomous body of law with some principles of its own. Developments at SCt should give some pause about their reliability—textualism shouldn’t be simplistic, but Romag looks like empty textualism. Gorsuch’s opinion says the Lanham Act exercises considerable care in mens rea, which is then picked up by Jack Daniels; redefining section 43 remedies. This is in contrast to looking, as Leval did in Rescuecom, at what each change to the law actually did (whether you like that outcome or not). Hana Financial: tacking as a pure question of fact; Booking.com, the same. Questionable factfinding is a big route of problems in Rogers cases—like district court ignoring criticisms of P’s survey in VIP. Maybe TM automony is anachronistic as opposed to cts just glomming on to a particular test and not looking at radiating effects on TM system as a whole. Tam & Brunetti: wiping away bars and then putting pressure on failure to function as the limit on registration.

Do we prefer reconfiguration? Hard to do without statutory change. 1A and Article III standing are there, but worrisome; casualness over stare decisis does suggest courts are willing to look at things from scratch—Vintage Brands; Netchoice—everything might be up for grabs.  Courts could very well adopt a property frame, redefining what TM’s pluralism is about—free riding stories won’t go away, no matter how much people in this room want them to.

Laura Heymann: Don’t conflate goals of system w/way system is organized to achieve those goals. Does “brand personality” online change what TMs are about? What are user rights for: Democratization of brand meaning; access to luxury goods; something else? What does association mean in the age of brand persona, and what cognitive processes if any are of concern?

Be willing to let go of shorthands: LOC is probably not a useful concept for what TM is actually doing now; so too with distinctiveness and source identification in a world of licensing and outsourcing and merchandising.

Do we value easy to apply rules? Or more flexibility for new tech and interests as they arise? Courts get outpaced by market. But maybe we can learn from how other communities respond to changes—Twitter made retweeting part of the system, finding ways to give credit; TikTok too. Study Amazon: what do we learn from systems developed to serve some of the same purposes that are changing much more quickly than Congress or courts can.

Scholarship: help courts feel free to be more flexible?

Discussants:    Lisa Ramsey

Constitutional analysis, not just courts but also Congress! Shouldn’t be intermediate scrutiny on a case by case basis, but an overall reconsideration of the goals of TM law. Display on front of T-shirt: ornamental, decorative; have legislature consider purposes of TM and PTO as well to be gatekeeper to protect public domain.

Lifeguard example of abuse: threatens lots of users of “Lifeguard” on front of search; court denies attorneys fees when someone decided to fight and raise valid defenses of abandonment via naked licensing, genericity, etc.; the TM clamaint got out of it w/a covenant not to sue. Maybe more fees for prevailing Ds. Audience, speaker, and message must be considered when considering benefits of competition in marketplace of ideas.

Jessica Litman

Morphing of meaning over time complicates assessments of “anachronism.” 100 years ago, a TM was a fanciful or arbitrary word or symbol attached to a good at the point of sale, and nothing else was a TM. Other things were protected—by unfair competition. All the things we rail about were protected then by courts in equity, but we didn’t need a failure to function doctrine very much. Courts don’t know this, so when they are looking at the Lanham Act, not only do we have difficulty remembering the words don’t mean the same things, the people who wrote those words didn’t imagine they’d come to mean what they’ve come to mean. Textualist courts tend to make flatly wrong assumptions about what the Lanham Act was and was not trying to do. Makes it much more complicated to figure out whether a doctrine is looking at the world through a distorted lens b/c the world has changed.

Lemley: Logistics of this: one possibility is larger paradigm project that says we’re outside of confusion and here’s a new set of rules. Burrell points out the incentive is to write terrible rules, but there are counter-incentives; why do we actually have these forms of protection, as divorced from competition? Makes us articulate the answer to that question w/o relying on things from earlier and narrower vision. Attracted to Ramsey’s idea of using 1A, meaning that bad drafting can’t ruin it all for us. But how does that get implemented? Courts regularly strike down claims as applied? That still seems difficult. To be successful, it needs something like a Rogers equivalent for different doctrines. Every time a court uses Rogers, it’s covertly holding that it would be unconstitutional to apply a broader set of rights; we’re tailoring the test with this in mind. But the test doesn’t say 1A every time; you just use the test.

Ramsey: do it w/broad fair use/general rules.

Lemley: his instinct is for standards so that they adapt, but he gets that people have different preferences.

Goldman: how do we know when a rule has become anachronistic? If there’s no consensus, there’s no mechanism to move forward. IIC—not possible to get movement in Congress; and common law is a one-way ratchet. Sunsets are a way to avoid anachronism. But there’s no concept like that in the common law. Stare decisis is instead a barrier.  

RT: if you’re looking for speech protective tests that don’t require individual case by case balancing, we do have them by adding elements to the cause of action (e.g., we could add harm back in to the TM test): defamation has these too; patent/false advertising interface requirement of knowing the claim was meritless.

Linford: don’t trust legislatures to handle speech issues. Concerned about industry carveouts that seem to have been typical in last 30 years of © Act.

Sprigman: Does uncertainty mean confusion? “I don’t know” who puts this out could be claimed as confusion if you take that seriously. That’s the shapeshifting quality of the concept of confusion. Deception would be a different concept than confusion—confusion is too capacious a concept for what we’re talking about.

Litman: Deception is closer to the original meaning of confusion when we have now.

Ramsey: it’s in the purpose statement of the Lanhan Act! Textualists should love this.

Burrell: technically in the UK, passing off requires deception, and it hasn’t made one iota of difference, so don’t look there! It wasn’t enough to show “I wonder,” but you had to show a positive assumption. But what caused the distinction to collapse was that courts decided to accept that evidence of wondering meant that there were other, unidentified customers out there who would assume without wondering. Maybe that’s not enough for deception.

Sprigman: Beebe & Sprigman just finished a project on levels of certainty—it’s pretty heterogenous about what they expect. There are cases making distinctions b/t deception and confusion (e.g. cases say that inquiries are not evidence of confusion) but also authority for collapsing them (cases that say they are evidence).

Beebe: would also change the term “consumer.” We should stop referring to consumers. It’s a charged term that carries with it the whole law & econ approach. Marketplace deception; Dustin Marlan proposes citizen; at least “purchaser.”

All of TM law is now “branding” law, so he might just use that term. We now use the part—TM—to stand for the whole—reputation.

McKenna: a whole bunch of other terms we use now to denominate a category, like trade dress, that weren’t coherently defined under unfair competition b/c there was no need to define it. After Wal-Mart, attempts by parties to call anything trade dress show the wisdom of that—we used to have one line that mattered (technical TM) but now that’s not true so we need a bunch more terms.

I yield to know one in cynicism about changing words changing outcomes, but deception has some things going for it—in particular, deception tends to imply materiality. And it ties into harm. We have a whole bunch of ideas about confusion that are hard to link to cognizable harm, but courts tend to assume that confusion is itself harm. We have a whole body of law about fraud, and you never win a fraud claim by showing that a person wondered about something—you have to show that the person then changed their behavior as a result.

McGeveran: You confused me is a much different accusation than you deceived me.

McKenna: we can’t really mean that a state of uncertainty is actionable—if we did, “I don’t know whether X makes this” would be actionable/part of the “confused” group.

Fromer: every single word in TM is now weird: “secondary meaning” is both confusing and misleading. The reason is that TM in many ways has drifted from its narrower and different origins.

Ramsey: Rogers uses the phrase explicitly misleading; both of those words do work and perhaps allow more rulings as a matter of law.

RT: a word of caution: in false advertising, courts found it necessary to reinvent exceptions to false/misleading distinction, resulting in the doctrine of falsity by necessary implication: both the Rogers title v title exception and the terrible result in Gordon v. Drape are essentially trying to do that, the latter in a much less coherent way.

Lemley: Heightened standard for confusion is another way to say that—a sufficiently high number of people, even if not everyone, are going to be fooled.

RT: the problem is that LOC factors are really bad, including surveys, so a heightened standard won’t do much good unless you use different factors. One possibility: a double identity-type rule where same mark/same goods=necessary implication, which fits the examples in Rogers and Gordon v. Drape. This would be another way of handling what I’ve called speaker deception, a narrower concept than Lanham Act source identification.

Lemley: but that gives you no way to handle the Borden v. Borden situation [which I am not trying to solve]; once you’re past literal falsity, we’re then looking for a standard about what’s close enough and that’s difficult.

RT: Ambiguity is the touchstone in Lanham Act false advertising case: the D must convince the court that there’s at least one reasonable non-false interpretation of the claim at issue, and if so we move out of literal falsity into misleadingness.

Ramsey: We could cover false statements and statements that mislead as to source. [but what does source mean?] She would define source more narrowly, but would then have to decide what to do w/a survey that said 15% of consumers thought P was the source.

Mid-Point Discussants: Jeremy Sheff

Amicus efforts: are they doing what we want? [Cue Taylor Swift reference.] What else should we be doing if that’s not enough: drafting instructions? Other forms of education?

Stacey Dogan: begins teaching TM with hypotheticals, trying to draw out students’ ideas of affirmative goals in recognizing/enforcing rights + countervailing concerns. Every single factual context we encounter in the course uses this paradigm: argument in favor of recognition versus countervailing concerns. We’ve lost that balancing, but every single TM doctrine should consider that balancing. Think about that with an eye towards stakeholders: purchasers, citizens, consumers of speech, creators and speakers, competitors (we often think of them in their role as providing better or cheaper products in particular markets, but there’s a broader way of thinking of them as contributing to a creative and dynamic innovation system).

We’re troubled by analytical incoherence, but we should focus on what costs the system is imposing on these stakeholders. Antimonopoly movement is giving us a model right now: openness to thinking critically about our version of capitalism. Color and shape of drugs as assisting elderly patients know which drugs to take when: example of the kind of evidence of costs associated w/TM rights. We shouldn’t just be reactionaries but embrace an affirmative theory of TM law that isn’t based on the early 20^th century but that is more responsive/reflective of current commercial markets.

Bob Bone: We have theories but not agreement on them. TM as an institution can’t do everything; we should consider the core features of the institution. Knowing that something is anachronistic doesn’t tell you what to do about it. Strategy is extremely important.

Lemley: Assuming we don’t get to rewrite the statute, we should think about what to do instead.  Antitrust is one place; right to repair movement that might get some bipartisan support as well as substantial business opposition. People understand what it is to have something break and not to be able to fix it. Dovetails perfectly w/some aspects of TM reform. Environmental movement is another possibility: one thing that the response to climate change will involve is reaction against mindless consumerism, and there are ways to harness that for coalitions, or at least for persuasive arguments.

RT: Dogan’s contribution makes me think about the effects of doing balancing internally to a doctrine v. adding defenses: Florabama case is a really intriguing example of the potential difference where the court’s view, and especially the concurrence, frames the question as interference with a speech right first, making balancing unlikely to occur or, if it occurs, to weigh in favor of the TM claimant. Rogers itself did something a bit different: it engaged in categorical balancing of First Amendment & TM rights and then announced a replacement test. The Ninth Circuit followed suit, as did the 11^th.  Rogers as defense after infringement is found, by contrast, would seem likely to behave very differently—once you have already decided there was infringement, excusing it seems harder; same thing is what destroyed descriptive fair use in the 9^th Circuit on remand from KP Permanent.

Dogan: This is a very subtle distinction but worth considering: even rule-based doctrines may reflect balancing even if they don’t call for balancing within the individual case, and that’s what we should think about presenting.

Linford: humans may be wired to think of free riding as unfair. Language of unfair competition invites those common intuitions.

McKenna: right of repair, first sale are good places to look for intuitions/coalitions about what is fair competition. Courts don’t just follow the empirical evidence; there’s deep normativity in these doctrines even if they aren’t self-conscious; implicitly sometimes courts limit the universe of confusion, especially in first sale and nominative fair use—that’s categorical balancing. It has built in structure that tips the balance strongly in favor of speech but isn’t a free pass. Reminding courts that categorical rather than retail balancing is often the best path is a good approach.

Bone: part of the rejection of rules is the fear of firms strategically responding to the rule—e.g., a TM use requirement in Rescuecom—and abusing it. He thinks we can respond to abuse of the rule in the future, but courts clearly do want to threaten liability in the existing standard rather than dealing with abuses as they arise. [I think this is related to my point about asymmetric design against abuse: the fear is almost always of the imagined infringer, not the abusive TM claimant.]

Fourteenth Trademark Scholars’ Roundtable: Are Key Trademark and Unfair Competition Doctrines Anachronistic?

UCLA School of Law

Mark Janis: 1^st day of TM: students’ experience of brands as used by owners & 3^rd parties is so disconnected from the historical traditions of TM. Anachronism may give away too much by suggesting the cause of disconnect is the passage of time—that might not be true or might be partly true. Or is it just the messiness of common law adjudication + rapid tech change? Or are these doctrines autonomous—maybe doctrines should be decoupled from the circumstances of their creation. Disconnect yes, anachronism maybe.

Session 1: Identifying and Explaining Anachronisms

Introduction: Mark McKenna: Every year, a TM exam could be written differently: one a very conventional exam question with Company A using one mark and Company B using a similar mark/similar goods, conventional walk through confusion factors in the way the test was designed to deal with. Or you can write an exam about the stuff actually in the news, which is often not a model the LOC factors were meant for—uses on Instagram, collaborations with artists, etc. We may be teaching a doctrine modeled on commercial activity that doesn’t take up much of the space of the way people use TMs. Are our doctrinal tools workable for the conflicts that arise? JDPI amicus brief was describing how LOC factors were not developed for these kinds of cases. Not just for likely confusion, but also use as a mark. Collapse of separate body of unfair competition, but also old-fashioned ways of thinking what it means to use as a mark—a certain kind of way of expecting products to be introduced to the market, that is no longer reflective of lots of stuff that goes on, especially digitally. Is merchandising really the outlier or is it now really the model of TM law. So we looked for doctrinally linked pairs of cases that highlight different commercial practices/evolution of doctrine over time. How tightly are they connected and do they reflect same doctrine/different circumstances or something else? E.g. LTTB v. Redbubble v. the Abercrombie spectrum.

Jessica Silbey: doctrinal tools that become less useful over time b/c of unforeseen developments: LOC factors, Abercrombie spectrum. Is it a tool that’s lost utility or just a tool that shouldn’t be used in specific circumstances? What causes us to use old tools in new situations? It’s a problem of legal reasoning, not just common law—the way we argue cases is to apply old tools to new situations.  Is there something special about TM? Combo of statutory law layered with multifactor tests might make these tools stickier than other areas of law; where the statute is clearer, maybe it’s more adaptable.

New facts: Many doctrinal foundations—comparative advertising, LOC where market structure and expectations of consumer behavior have changed. Think about where cts have stubbornly refused to recognize the existence of new facts—MSCHF/Vans case is one of those, where material alteration/first sale doctrine need to be applied differently b/c the world has changed and the ct refuses to recognizes that. But Multi Time Machine is recognizing that Brookfield needs to be changed. What’s the difference (other than circuit)? Lancaster watch/Hamilton case and Wavy Baby/MSCHF case can’t both be right—that’s either a totally a new watch and materially altered or neither of them are. Consumer tastes change, rise of upcycling and customization, are important changed facts.

In con law we attribute doctrinal shifts to ideological/intellectual shifts—new ways of thinking about industrial organization. Are there things in TM where we see intellectual shifts like that? The “use” cases maybe, aesthetic functionality.

Other doctrines developing in parallel: the First Amendment is the elephant in the room, w/unintended consequences for financial regulation, public accommodations, etc. Aesthetic functionality, affiliation/sponsorship now needs to be seen as affected by First Amendment. Ornamentality exceptions, like LTTB, versus dog toys & shoes, which are not seen as the same—wrestling with speech v. product v. conduct. Maybe that collision explains some of these anachronisms.

Are there other doctrines that may be working in the background? Franchise law, labor law, antitrust law.  [Standing?]

Discussants:    Dev Gangjee: If even what counts as an indication of source has changed so much, must wonder where TM is going b/c of franchises, contractual arrangements and licensing—the whole guarantee of quality story just doesn’t make sense any more. TM has achieved context collapse: losing unfair competition and becoming formalist—similarity = infringement and that’s it. High formalism in EU TM law; AI systems are measuring only sign similarity and product similarity. Methodology and approach affects content—multifactor tests are the ultimate rebuke of realism to formalism.

Jeanne Fromer: Doctrines have ossified in unintended ways. Distinctiveness: Abercrombie gave a shorthand to help categorize marks and protectability/scope thereof.  But it hardened and became unmoored from “which marks are competitively dangerous to protect”—categories got their own internal rules and shorthand, such as “a fanciful mark isn’t in the dictionary” even when it conveys its meaning, often descriptively—Clorox.

Judge Leval did the right thing quite recently in Rise & Shine v. Pepsico—pulled back and said don’t harden the categories too much. Even a suggestive mark can have a primary meaning so closely linked to goods/services that the mark is weak, like RISE for cold coffee. If the suggestion of a suggestive mark calls up a central feature, while a descriptive term describes a trivial feature, the suggestive mark can be weaker than the descriptive one.

Sometimes it’s our doing: as scholars we sometimes understand things more categorically than courts intend. Brookfield v. MTM cases: you can agree w/outcomes or not, but decisions are really nuanced. MTM is saying “it’s about exactly how Amazon presented its search results.” But we tend to say “MTM killed IIC online” and we shouldn’t understand it that way. There are some things on Amazon that feel potentially confusing. Self-reflection: ensure we’re extrapolating correctly and with nuance.

Many of us talk about Rogers in this way as a categorical rule, but the VIP case shows there’s nuance in those cases that can get lost.

There’s so much more reliance on empirical evidence now than in the past, and it raises normative v. empirical questions. Relates to questions like “trademark spaces” and linguistics in TM. Types of empirical evidence also change—linguistics versus marketplace evidence to assess genericity. Booking.com’s focus on survey evidence—courts very open to new evidence, but we ought to think more critically about what each type of evidence offers and does. Linguistics v. what consumers think v. what’s going on in marketplace.

Smith v. Chanel: readily accepted tradeoffs against consumer confusion for purposes of speech and competition; Coca-Cola and other cases not as much. Thinking about anachronisms/path dependencies, it can be helpful to think about whether we structure something as a defense or part of the confusion case, and going back and forth can make it easier or harder for a consideration to matter.

Lemley: don’t assume we’re moving in the right direction. Many anachronistic cases have been decided in last 20 years. Borden was wrong and we were right to broaden the concept of confusion, but many things ignore that changes in the law move people’s perceptions as well. Penn State merchandising case might seem like an anachronism, but he thinks it’s a great case.

Rules v. standard: you might say a rule is anachronistic, it’s easier to identify whether that is so. Before 2020 we had a genericness doctrine, now we don’t—the rule that you can’t come back from genericide was a rule and now it’s just gone. If our doctrines our standards, we tend to think of them in rulified terms, but that’s not how standards work. You look at datapoints and they might migrate in a particular direction but that doesn’t mean they’ll all be the same.

Barton Beebe: Intellectual movements—do they have any effect on TM law? Law and econ of course, but what else has affected TM law as opposed to TM commentary? Might not look like TM is constantly struggling with tech, versus © and patent. But: Amazon has basically replaced TM law, and that’s a tech development. So is the domain name system, which brings principles from guild world in 1400s into cyberspace. Dawn Donut—2d Circuit has expressed skepticism but it’s still there—it does seem like it’s from a different era. Assignment in gross seems anachronistic given the development of licensing. So the larger Q is to what extent does tech change affect the premises of TM?

TM law doesn’t seem to be getting better; we don’t have a whiggish history of progress. Is that lack of progress producing the anachronisms?

Jake Linford: First Amendment Lochnerism—used as a deregulatory move can happen on a number of different fronts. Worried about trusting 1A to do good work here. Contract law: recently, Adidas decided Ye was too toxic to work with and cancelled deal. If I have a shoe brand and want to collaborate w/some artists and not others. To the extent that contract law has let parties decide in whom they want to place business trust, Nike can tell MSCHF thanks but no thanks. But that opens some 1A space to ask whether Nike is exercising rights in ways implicated by 1A. Generally private action doesn’t count for 1A purposes, but there is pressure on that [because courts are enforcing the claimed right of Nike to control whether you can modify a shoe without a contract].

Rules save resources in a resource-constrained world; Abercrombie can be ok if it’s right most of the time—does it save us time in most cases? Does the equitable power of courts provide enough flexibility to know when to vary the rule? [That sounds like describing a standard, though, especially given litigation incentives, as Glynn Lunney has written.]

If we don’t have surveys, what do we have? His prelim research suggests a lot of judicial notice and a parade of individual witnesses on both sides. Maybe a good survey economizes that march of the witnesses in a way we like. Without a particular tool, what should we replace it with?

Jeremy Sheff: Existence, nature and scope of judicial discretion: a broader ideology that has a huge effect on TM cases. If judges are supposedly just calling balls & strikes, the opinion will write a certain way. In Judge Leval’s time, judges were judges in that they exercised judgment and discretion as part of their function. That’s one way intellectual movements about jurisprudence can shape TM. TM law in EU has moved to more formalistic application of criteria rather than equitable judgment of unfair competition—a similar shift.

Other battle lines: First Amendment as deregulatory weapon. That’s the obverse of another aspect of judging: role of judiciary in social regulation generally, and whether private power ought to be subject to countervailing power in federal courts. That will affect TM too but not b/c it’s a philosophy of TM.

Bob Bone: In torts, we have common-law greats like Judge Traynor who are willing to innovate—strict liability, etc—in response to broader changes in general values. We don’t seem to have that in TM—less sensitivity to external changes; moves like molasses. Why is that? One reason may be lawyers. Practitioners wrote on TM in the early 20^th century: Rogers, Callman, Schechter; part of the broader intellectual world but also as practicing lawyers maybe more constrained. As we get more specialized in our practices, maybe that is affecting ability of doctrine to respond to circumstances.

While costs of TM expanded, the benefits are expanded as well—changes in the way we view the benefits of marks. TM protection as creating incentives, or protecting property like ©. Why? Lawyers are using TM law to fill gaps. Doctrines that served a different purpose originally can be repurposed to do that.

Lisa Ramsey: Divide on Rogers: 9^th Circuit uses it as a replacement for standard confusion test; SDNY in Metabirkins: use LOC test first, then have jury apply 1A defense. That might change the outcome if the factfinder first finds infringement and then decides whether there’s any defense.

McKenna: Shift to textualism: JDPI briefing, the attempt to claim you can find answers in the text of the Lanham Act, which is obviously bonkers and yet the audience is open to it (compare Star Athletica). Tort: Different courts often have different normative goals: some are more interested in compensation for injured Ps, some in incentives where P is just a tool, some in punishing bad actors. Teaching torts alongside TM, one striking difference is how much TM pretends it’s just finding stuff in nature in commercial practice and following consumers—hides the inevitable normativity of the various choices. [Indeed, where did we get the rule that 15% confusion is a lot?] We’ve been fighting about the ultimate endpoint of following what consumers do, which seems to be rights in gross. Any kind of arrangement is conceivable now. Brand owners are doing things to themselves we used to think we wouldn’t do. It’s getting harder to present to courts that not everything that allocates value to TM owners is good. TM has its own reasons and internal limits that aren’t just derived from what we see in the world.

Chris Sprigman: Came to TM through competition/antitrust. 40 years ago a lot of federal judges thought antitrust was more important than TM and so many judges saw TMs as anticompetitive; now many of them don’t. Antitrust is the polar opposite of TM in openness to ideological revolutions; complete (but shallow) reassessment of relationship b/t TM and competition. Neo-Brandeisians haven’t focused on TM, but are getting there, and they may find that the 1930s and 40s writing will seem correct: TMs are more a force for oligopoly than for innovation, which might then affect antitrustàfederal judiciary since antitrust lawyers are elite lawyers and TM lawyers aren’t.

Nuance is overrated in law (contra Fromer): Antitrust understands that deeply and used to eschew nuance even more. If two bodegas decide to fix the price at which they sell Diet Coke, their operators go to jail. That’s a correct result! First Amendment tests: they should largely eschew nuance, as 9^th Circuit did with Rogers; 2d Cir. did too in Rogers itself, which was misunderstood b/c in Twin Peaks both sides had First Amendment interests—the first line of Twin Peaks is that it involves the exception to Rogers. Misunderstood by dcts that don’t have a ton of time. Nuance is the enemy, not the ally; breathing space under the 1A is not an anachronism. We shouldn’t have trials over intent or whether an Eveready test shows 19% confusion or 38% (as it did in Rogers). There are arguments on both sides, but that’s the real problem w/anachronism as a framing device—it’s useful, but normative Qs always proceed it.

Robert Burrell: If the claim is that ossification has led to TM’s misshapenness—not true in UK b/c TM keeps responding to calls for modernization—law fears being left behind state of commerce, advertising practices. Robust TM use doctrine in 1920s was swept away in 1938 b/c 1927 courts didn’t appreciate the hugely significant rise of advertising which would harm TM owners unless stamped out. Time and again, the harm to the shape of TM law has been caused by demand to “reflect commercial reality” and protect “brands” rather than TMs. Assignments in gross are a good example. UK TM law is not good b/c it got rid of the prohibition on assignment in gross; we need more anachronisms. The internet is a partial exception—there has been an ECJ commitment not to break the internet, which means that pushing back against TM expansionism has also been done in the name of modernity.

Stacey Dogan: What gets called law & econ is often libertarianism/view of world as adulation of commercially successful individuals and disdain for community/anti-communitarianism. That’s influenced every aspect of our law for the past few decades. Fluid/flexible legal standards allow judges to be influenced by that. Successful people shouldn’t pay taxes! It’s all part of the same view.

Can’t start from scratch b/c law has reciprocally influenced commercial reality. But what would a rebuild from the ground up, starting with today’s commerce, look like? Chris Leslie says a big problem of antitrust is not a problem w/frame, but that courts have simply ignored the facts b/c of their framework. We could try to bring anticompetitive effects forward.

Mike Grynberg: TM is pluralist in a way a lot of us don’t like. Anti-free-riding impulse will always be with us. LTTB is different b/c plaintiff looked more like a free rider (on the aesthetic meaning). Always been with us: there was a 2 Justice dissent in Kellog v. Nabisco. Old cases were also shorter and easier to read—there weren’t multiple steps to run through. It’s not just that we have ossified structures, but we have structures upon structures—in Borden, the court says the label is fine and does the multifactor test. In 2016, the Second Circuit says do multifactor test + NFU factors. As Tushnet says, “TM law never gets less complicated.”

Laura Heymann: district courts fear reversal; they want to be safe and claim calling balls and strikes, unlike Justice Traynor on the Cal. SCt.

Consider also how PTO examiners are trained. TMEP purports to instruct them; they’re often cutting and pasting from TMEP or prior office actions. Maybe that’s inherent to an admin system. Consistency, predictability, not rocking the boat is a value in the system, which may bubble up.

Mid-Point Discussants: Rebecca Tushnet

[I think that’s not true—700,000 applications a year can’t produce consistency, and also most Art. III judges have no idea what registration is and just guess at its general meaning.]

Figure skating, poetry, intermural speech and debate, and law: what do these fields have in common? Development of elaborate internal systems that are often impenetrable to outsiders but that make sense to insiders to distinguish good from bad performances. An aesthetics of law is often, today, cashed out in a multifactor or multistep test—I think that occurred in formalism too, even if what we now call factors were instead presented as a decision tree.

Carol Rose, Crystals and Mud, a tendency for law to grow more rococo until the legislature or someone else w/authority steps in and tries something new, which then accretes its own apparatus that allows explanation; criticisms of formalism can now be applied to legal realism (accretion of multifactor tests—2d Circuit as case in point where for nominative fair use they just say “throw it into the pot” and also say every factor has to be considered in every case, except maybe Rogers cases).

Con law concepts: Reva Siegel & Jack Balkin: preservation through transformation. The doctrine has the same name but considers different types of evidence and thus produces different results. Often works to scientize a doctrine. The Brandeis brief is a good example: by claiming scientific, empirical support it contributed to the idea that that’s what government always needs to justify its decision to regulate, which might be a good change but is definitely different than it was before.

Larger problem w/ TM system as a system of law is its lack of adversarial design: design with assumption that people are going to be pressing the boundaries in asserting claims (Glynn Lunney’s work on degeneration of TM doctrine)—there’s a consensus of the powerful about whose claims are dangerous (class actions—CAFA; prisoners—AEDPA; securities plaintiffs—PLSRA). The only recent recognition of incentives to exploit the law in TM law is the change from some circuits recognizing niche fame to being told not to do that in the TDRA plus a little bit of greater cancellation options; the TMA went in the other direction, rewarding aggressive claims w/the threat of injunction, on irreparable harm. Maybe it is time to try to put TM into the larger progressive antimonopoly discussion.

Abercrombie v. LTTB: Use as a mark’s absence has led to a realignment around informational/decorative to take things out of the category “arbitrary.” Abercrombie notes “the same term may be put to different uses with respect to a single product” w/r/t descriptive uses, but not other types of uses. Should secondary meaning defeat that? Lizzo’s 100% THAT BITCH suggests yes in practice; what about in theory? After Booking.com, yes in theory seems like the courts’ likely answer.

Another thing in Abercrombie we don’t talk about: “It need hardly be added that fanciful or arbitrary terms enjoy all the rights accorded to suggestive terms as marks without the need of debating whether the term is ‘merely descriptive’ and with ease of establishing infringement.” That’s probably the wrongest thing the case said from a current perspective—that’s not a LOC multifactor analysis.

One more background doctrine to add to Silbey’s list: Article III standing. To answer Beebe’s question: Dawn Donut is now obviously a standing doctrine. Likewise, free riding may not provide Article III standing, which purports to require harm.

Bill McGeveran: The source/brand distinction which seems so rigorous to us seems bizarre to TM claimants. The people whose interests TM serves don’t agree that TM is for source identification; they like that too, but that’s not what they think TM is for—it’s much more important to understand that “Apple” means cool and functional. Is this a new fact? It’s evolved more and more in this direction.

Shift in what progressivism around economics is in policy. FTC might ban noncompetes! Very rapid shift in policy as well as intellectual approaches. The world of possibility around legal change in TM-adjacent fields is much higher than it has been in a long time. Income inequality; perception of campaigns controlled by economic interests. Realignment also possible around speech interests. 1A plays a different role in TM than in other regulatory, anti-admin state moves. The villain here is large corporations/TM bullies.

Leah Grinvald: Studying caselaw isn’t the whole picture: lots happens outside of the courtroom. Amazon is a huge case in point; Google as well; Jim Gibson’s piece on rights accretion—affects what cases are brought, fought, settled.

Silbey: What prevents TM lawyers from bringing in arguments about identity politics, or art history, and not just branding literature? Metabirkins judge rejected art historian for having no methodology; sociology and urban planning were disputed methodologies in early 20^th century [and perhaps still, to CJ Roberts]. Became available to lawyers; what is preventing TM law from adopting other forms of empirical evidence to make arguments for Ps and Ds? Are we seeing claims adjoined to TM that suggest related problems, the way we’re now seeing © and privacy claims brought together? Maybe not b/c TM is already so capacious. [TM and ROP, maybe.]

Sheff: Most TM cases aren’t worth enough to litigate complex issues of expertise—they won’t destroy a business (except for Rogers-type cases). Changing the name is often an option, and if that cost is less than the cost of expert litigation that would affect choices. Silbey: surveys are expensive. Sheff: Ds often don’t use them, and at least they’re relatively formalized now.

Crystals and Mud is a good comparator: we might have to adapt to new developments. We can adopt exceptions—separate bright line rules: one fact causes us to switch to a different path. Rogers is one example. But the alternative is to just throw it into a multifactor hopper. The 1A implications suggest that move is inappropriate in certain categories of cases. That’s more a prophylactic rule than a standard. Some injuries are simply more important than others.

The Polaroid factors are actually dicta; resolved on laches grounds. Second Circuit is thinking about how close two products need to be; they need not be identical, but here are a bunch of things to think about w/related but non-identical products; but anyway P loses on laches grounds. We’re treating this list as the definition of how we know when two businesses are going to be confused. Similarly with Abercrombie, which purports to give shape to the category of suggestive marks, the court traces through some common-law development; even if a mark isn’t descriptive, and even if it’s not a technical TM, it might be registrable/protectable—Abercrombie allocates it to the side of arbitrary/fanciful marks. Those are moves that differ in implications for how that doctrine will be picked up in future cases in ways courts don’t anticipate.

Fromer: Don’t forget role of PTO and other agencies, either contributing to ossification or development of TM. A lot of what they do is responsive to courts, but they’re at the front end of granting registration. They’re not creating protection (they say), but deciding to grant or deny registrations does mean they deal w/businesses thinking about TM rights. They see a lot of situations that TM law will ultimately have to contend with [as they first noticed the decorative/ornamental flood].

In many ways PTO is very bad at responding to new situations, though in some very forward-looking. They’ve been very permissive about allowing businesses to rebrand/do brand extensions in ways the courts haven’t noticed but affects what happens in TM. Permissive in allowing token uses to count as use in commerce. They’re pretty bad at catching descriptiveness w/o secondary meaning. But for failure to function, they’ve really been prominent b/c the PTO was willing to act. It’s unfortunate they have a framework of “applicants are our customers” and “we want more registrations every year.” A lot turns on the data that they do keep and use when searching. They have no general database of specimens, for example; that might keep TM in the past/enable businesses to keep registering the same thing over and over again. They don’t search beyond the registration database.

Lemley: (1) list of cases/juxtapositions—with 1-2 exceptions, every anachronism doctrine is a doctrine that expanded TM rights to a category of things that didn’t exist traditionally. (2) we’re at a generational disconnect. Nobody thinks about brands the way TM scholars think about TM. Spent much of his life resisting that effort, but we also need to say “a new theory needs new rules.” RT’s point about standing doctrine: always good to see a dumb doctrine defeated by a dumber doctrine. But there are other ways to think about what that new theory might do that can free us from existing doctrinal constraints. Maybe consumer confusion doesn’t matter at all; at a minimum it’s not determinative. If brands aren’t TMs, then confusion might not matter. Maybe we don’t need a presumption of exclusivity in a particular market. And then the 1A might come in: there’s no special exemption from the 1A that stems from misleading commercial speech b/c that train has left the station. Maybe we should welcome the idea that every TM case is one that needs a 1A analysis.

Consider a rhetoric of rights on the user side as a counterbalance: not a brand totally owned by company, but a thing that the world benefits from; a right to choose whether I want that meaning or another one.

Dev Gangjee: Are we going back to some ur-text that is disconnected from “normal people”—but advertising has been fundamentally rethought as a good thing these days. Look at greenwashing/sustainability agenda: if TM is hitched to advertising, we can talk to others and connect that to the larger agenda. We’re not wrong in being cautious about this trend, and we don’t have to concede that society has moved on. Ralph Brown’s piece on advertising and the public interest: The FTC used to be the site of many of these debates, including about whether TMs could be misleadingly suggestive.

On Lemley’s point about new rules: EU adopted new theories and got terrible rules—just mushed them all together and invented harms.

Linford: Thomas could get a textualist test out of 43(a). Are Amazon & Walmart the villains w/aggressive tactics, or is that just competition that we love b/c it offers low prices? Amazon is worse for consumers than it was 10 years ago; we had an opportunity in MTM to do better—just tell consumers you don’t have an MTM watch, just one line of code. Once we don’t ask even that, the floodgates of enshittification open. [This strikes me as quite wrong—Amazon’s a bunch worse b/c the product results are controlled by how much the sellers pay Amazon, and it’s especially bad when you aren’t looking for a specific brand—the problem is on the seller side, not the consumer side.]

McKenna: Why do people think TM’s role is to protect brands? Prestonettes: the complaint was that D was interfering with what we want known about our brand, and the Court said that wasn’t its job. The word is not taboo! What enabled this shift even among TM lawyers? Courts say all the time, TM law promotes competition—but it’s a shift from TM law as a system to trademarks promote competition, which is a significant move that enables you to stop thinking about what the limits of protection should be. TM needs a theory of competition. It’s not a thing found in nature.

Grynberg: part of the PTO’s problem is that it’s under the Fed Cir’s thumb and trying to survive what the Fed Cir thinks about IP rights.

Burrell: can an admin agency be part of ossification? We have to think about to what extent PTO rules find their way up to superior courts. But b/c the PTO deals w/the vast majority of TM disputes, that’s the wrong Q—they can be their own source of ossification for their own disputes. Can admin agencies resist attempts to deossify from the courts? Sometimes you can see them deliberately ignoring dilettantes on courts, watering down their rules.

Sprigman: if TM is going to reconsider how TMs shape competition, it shouldn’t ID retail-level villains; it should develop a theory about what competition is supposed to do and how rules should shape it. Mishakawa: a TM is designed to induce people to think they want something—to differentiate markets that were competitive and create artificial differentiation to move the market more towards oligopoly. That’s a gigantic idea, and not about whether Walmart or Amazon is bad or good. The Chicago model celebrates limitless product differentiation, w/no margin of diminishing returns. That’s a contestable understanding of what’s good about markets. Sometimes we standardize! E.g., financial markets. Efficiencies come from standardization. Henry Smith also writes about this for property. TM law needs to find that level of what we’re looking for in general, not on a case by case basis, which would just be more ad hoc.

Bone: Normative anachronisms, not just doctrinal ones. And anachronisms about empirical world. Useful to distinguish among ways tools/beliefs can be anachronistic. Abercrombie is a good example of doctrinal anachronism. In Polaroid, Judge Friendly was trying to resolve a tension in 2d Circuit and a typical way to do that is to say everyone’s right; we do that by taking what everyone cares about and sticking it into a multifactor test. It only gets worse as time goes by. Abercrombie is similar: Judge Friendly says let’s look at the categories, but the old categories were supported by a different normative theory (technical TMs—a natural law property right that was dominant during the conceptualist period), so we kept categories that were ill-suited to the new normative baseline. Not surprising it’s a mess. But it’s not as bad a mess as LOC because we can look at some of these categories and say it makes sense to have categories, but they’re not the right lines because we’re all functionalists now and want to know what the categories are for.

Ramsey: the challenge for judges who don’t see many TM cases: what are they supposed to do? If we don’t have a multifactor test for the traditional cases, what should we be doing? We need a framework for argument.

Sprigman: normatively, do we want consumers’ own savvy to take care of this?

Bone: we used to have that—double identity/technical TMs were a much easier confusion test.
Beebe: Neo-Brandeisian approach to IIC might be that it’s fine thing unless it’s bait and switch; not clear how it would think about post-sale confusion. Fashion brands distract us from the giant world of everyday TMs; how do we navigate that gravitational pull distracting us from competition theory.

Lemley: we could try a double non-identity test: not the same field and not the same mark, we’re done. We’d have to decide how close you could get. We’d also have to cut back on sponsorship/affiliation to do that. It’s not a reconceptualization that requires a return to the past, though that might be a component: there might be a universe of ordinary TM disputes from 80 years ago where the old rules are fine, and then a universe of brand disputes that could just be treated differently; the theory of competition there is fundamentally different.

Site news: cross posting to Wordpress seems down, but email subscription is here

 I'm trying Mailchimp if you want to get posts by email. I'm also trying to fix the crosspost to Wordpress, but I'll have to see if that works. Other places to find me: Twitter, Mastodon; LinkedIn if I can get that fixed.

Amicus in Jack Daniels v. VIP

I'm filing an amicus today on behalf of First Amendment scholars:

Enrique Armijo, Professor of Law, Elon University School of Law

Lisa Pondrom Ramsey, Professor of Law, University of San Diego School of Law

Rebecca Tushnet, Frank Stanton Professor of First Amendment Law, Harvard Law School

John Villasenor, Professor of Law and Electrical Engineering, UCLA; Founder and Faculty Co-Director, UCLA Institute for Technology, Law and Policy

Eugene Volokh, Gary T. Schwartz Distinguished Professor of Law, UCLA School of Law

Catching up: Meta wins (one) infringement claim about its rebrand on motion to dismiss

Dfinity Found. v. Meta Platforms, Inc., 2022 WL 16857036, No. 22-cv-02632-CRB (N.D. Cal. Nov. 10, 2022)

Dfinity alleged that Meta infringed its Dfinity and Rainbow marks in its rebranding. The court granted a motion to dismiss on lack of likely confusion.  

Dfinity is a nonprofit organization that runs the Internet Computer, a public blockchain network. Dfinity seeks to “provid[e] millions of developers and entrepreneurs with a public compute platform—creating a revolutionary new way to build websites, enterprise systems and internet services within an open environment.” Users can download “dapps” (or decentralized applications) which allow users to design and develop software using the Internet Computer blockchain. Dfinity’s website also provides users with “educational tutorials and courses in the field of distributed computing platforms.” Dfinity sponsors conferences and hackathons, and gives in-person and virtual presentations. In 2021, Dfinity announced its Developer Grant Program, a grant fund of $200 million “to support initiatives for developers to work on the Internet Computer.”

In 2018, Dfinity secured registration for its Dfinity mark for use in various computer-based services, including: “Computer software for decentralized platforms, namely, software for using a consensus engine incorporating blockchain technology for securing data with cryptographic information”; “Design and development of computers and software”; and “Hosting of digital content on the Internet, namely, computerized data, files, applications and information.” Color was not claimed as a feature of the mark: 

infinity sign with left loop larger than right with DFINITY beneath

In 2021, it secured registration of its second mark, the Rainbow Mark. The colors purple, pink, blue, orange, and yellow are claimed as a feature of the Rainbow Mark, and Dfinity’s usage guidelines require that these precise colors be used:

a more equal infinity sign in different colors on its own

In 2022, Meta sought registration of its new MetamMark, described as “a geometric design consisting of two loops.” Meta employs it in a variety of ways, including on its website, social media channels, and products: 

Dfinity also alleged uses of specific “multi-colored versions” of the Meta Mark:

the infinity symbol in various colored textures

After Meta unveiled its new mark in October 2021, users allegedly replied to Dfinity’s Twitter account with comments on the similarities between the Dfinity Marks and the Meta Mark, and possibilities for partnerships or collaboration between the two entities. Dfinity sued for federal and state trademark infringement.

Dfinity mark: Under Ninth Circuit law, “use in commerce” requires both “(1) an element of actual use, and (2) an element of display.” Dfinity argued that its registration of its marks gives it “prima facie evidence of [their] validity,” so it need not plead use in commerce to demonstrate a protectable ownership interest in an enforcement action. “The Ninth Circuit does not agree.”

All the specific uses to which Dfinity pointed were uses of its rainbow mark. Without “any accompanying evidence in the complaint or incorporated by reference,” the mere allegation that the mark was used in commerce was too bare and conclusory to survive a motion to dismiss, though Dfinity got leave to amend.

Likely confusion with the rainbow mark: The Ninth Circuit has cautioned that the Sleekcraft test is “pliant” and that “[s]ome factors are much more important than others, and the relative importance of each individual factor will be case-specific.” Courts “must be acutely aware of excessive rigidity when applying the law in the Internet context; emerging technologies require a flexible approach.”

Similarity is “one of the most, if not the most, important factor when assessing likelihood of confusion,” and “similarities [are] weighed more heavily than differences.”

What was the Meta mark to which Dfinity’s rainbow mark was to be compared? Dfinity argued that there were “multi-colored versions of” the Meta mark:

But the source for that allegation was an article called “Designing our new company brand: Meta” which describes the process of creating the new mark. “The article includes photos and short videos of the Meta logo in various stages of transformation, and states that the logo ‘can take on infinite textures, colors and movement, capturing the creativity and imagination of a 3D world.’”

None of the photos on the page show the Meta Mark in the color and shape shown by Dfinity in its complaint and opposition; rather, it appears that Dfinity’s version of the Meta Mark comes from a video showing the Meta Mark morphing into different colors, textures, and shapes before ending on the blue, traditional Meta Mark. Dfinity appears to have taken a screenshot of the Meta Mark as it mutates in this video, timing the image to precisely the split second in which it looks most like the Rainbow Mark. Dfinity has not alleged that this “multi-colored version[ ]” of the Meta Mark appears anywhere else but in the video in this article.

The court agreed with Meta the proper comparator was the one registered as a trademark and that appeared on its webpages and products.  “Even assuming the design story is a commercial use of Meta’s trademark—describing the company’s brand evolution from Facebook to Meta and thus related to the goods and services the new brand seeks to market and sell—the use of the screenshotted multi-colored mark is so fleeting that it cannot be a source of customer confusion.”

main Meta mark in blue

Once that was set, the marks were dissimilar. “Dfinity’s shape is a traditional infinity sign, with the lines crossing at the horizontal and vertical midpoint, and a precise multicolor format that Dfinity instructs users of the logo not to alter. While Meta’s logo can and does appear in different colors, and is not always in the traditional blue, its shape is still dissimilar to Dfinity’s.”—more like an “M” for meta, a video game controller, or a soft pretzel (first two offered by Meta, the last from the court).  The marks were even more dissimilar when they are accompanied by the parties’ names, “which happens often (though not always) in commercial settings.” “The thickness of the lines and the general continuous pattern of two loops intersecting at a midpoint” were the only similarities.

Still, that wasn’t enough on its own; they were not “obviously” dissimilar, or “so facially dissimilar that they cannot possibly create a likelihood of confusion,” and prior dismissals at the motion to dismiss stage have relied on “clearly different” words appearing in the accused marks. “Because, as explained above, both parties occasionally use the marks without their names attached, words are not dispositive here.”

Thus, the court proceeded to consider the remaining factors. Strength: The court took judicial notice of 1500 other registered trademarks comprising an infinity symbol for the same classes of goods and services as Dfinity’s. That didn’t mean Dfinity’s marks were weak; Meta didn’t show how recognizable those marks were compared to Dfinity’s. “It is certainly possible that Dfinity is the most recognizable infinity sign in its class, in which case even a suggestive mark in a ‘crowded field’ could be stronger than expected.” That’s a fact issue.

So too with commercial strength. “Dfinity pleads facts that show some measure of commercial recognition, which is all that is required on a motion to dismiss.” Given the Ninth Circuit’s description of suggestive marks like the rainbow mark as “presumptively weak,” the court found the mark neither particularly weak nor particularly strong, giving this factor little weight at this stage.

Proximity of goods and services/likelihood of expansion: The services were not “totally unrelated” enough to be dispositive on a motion to dismiss. “While Meta does not now provide the precise services that Dfinity does, it does provide developers and creators with the ability to design, build, and launch VR apps on Meta Quest.” Given Zuckerberg’s founder’s letter launching Meta (“The metaverse will not be created by one company. It will be built by creators and developers making new experiences and digital items that are interoperable and unlock a massively larger creative economy than the one constrained by today’s platforms and their policies.”), it was plausible that Zuckerberg was describing products and services like Dfinity’s Internet Computer.

While Dfinity targets developers interested in using the blockchain to “build websites, enterprise systems and internet services within an open environment,” Meta targets everyone, including developers, “some of whom presumably are interested in building their products within, or at least compatible with, such an ‘open environment.’” Meta argued that its closed products were antithetical to that vision, and that there was no indication that it was interested in expanding into the realm occupied by the Internet Computer. “But given Meta’s metamorphosis over the last few years, such a move is not implausible on the pleadings.”

Type of goods/degree of care: Here Meta did much better.  “[T]he developers to which Dfinity markets its software are perhaps multitudes more sophisticated [than ordinary consumers online] and exercise a correspondingly higher degree of care.” It didn’t matter that Dfinity offered its services “for little or no cost,” given that they were software services offered to developers. “A service can be both low-cost and sophisticated, and a tech-savvy consumer is not likely to exercise less care if the service is sophisticated, simply because it is also inexpensive…. That these sophisticated people, immersed in the intricacies of the tech world, would be duped by a logo, particularly one that is not similar in key respects, borders on implausible.”

Actual confusion: Dfinity offered six Twitter replies as evidence of actual confusion, though it didn’t link to or plead the contents of the Dfinity tweet to which they were replying. The replies either state that the marks resemble each other (“Too similar,” “meta is copying icp’s logo or something,”) or that the marks’ similarity indicates a partnership between Meta and Dfinity (“Meta+InternetComputer = ...?” “Partnership?” “I see a partnership? Kismet?”).

First, the fact that these statements appear to reply to a tweet from Dfinity itself (regardless of what it said) indicate that they do not represent the natural confusion of a consumer; these replies are derived from some prompting from Dfinity itself rather than experiencing the marks organically as consumers in the marketplace. Second, as Meta argues, these replies indicate a clear understanding that Meta and Dfinity represent different entities, and Dfinity’s original tweet prompted the connection and discussion of similarities between the marks or possible partnerships.

Similarity of marketing channels: similar, but not of heavy weight.

Intent: because of the dissimilarities in marks, and without other allegations of bad faith beyond a general allegation of “willful and wonton disregard of Dfinity’s established and superior rights” in its trademark, this factor weighed against finding a likelihood of confusion.

As a whole, the key factors were: (1) the similarity of the marks; (2) the relatedness of the goods; and (3) the type of goods and degree of care. Without evidence of the mark’s strength or weakness at this stage, the court gave heavier weight to the type of goods and their accompanying customer base, “tech-savvy developers.” “With so sophisticated a product and a customer base, the type of good and the degree of care should be given more weight in this analysis than in the usual trademark infringement case, where laypeople are often the prospective customers.”

Overall, confusion was implausible.