Free Speech Challenges to the Inflation Reduction Act

 With Sean Tu, at JAMA. Given how short the piece had to be, we had to cut out some other examples, but the claim is still a good example of the metastasizing First Amendment.

Online contracts, government website edition

 The terms of service for this state site are interesting. Query what happens when they're barred by the law of another state (I see no forum selection clause) or by copyright misuse. And given the specific reference to "coffee table books," what is "any medium" doing and would a non-coffee table nonfiction book using a single photo as an illustration be covered?

Terms:

 You are required to expressly accept the following Terms and Conditions of Use, without any modifications, prior to each use of this website. The State of Hawaii Department of Transportation Airport Division (the “HDOTA”) may revise the Terms and Conditions of Use without any specific notice to you. The Terms and Conditions of Use posted at the time of your use of this website governs that use. If you do not agree with any part of the following Terms and Conditions of Use, you will not be permitted to use this website.

The images and other content, (the “Media”), on this site, https://aviation.hawaii.gov, are protected under applicable intellectual property laws. Unless otherwise stated, intellectual property rights in the website are administered by HDOTA on behalf of itself and the State of Hawaii.

FOR MEDIA USE PLEASE NOTE:

You are prohibited from using the Media for any commercial purpose. Any use, whether or not commercial, that may tend to degrade, tarnish the reputation of, or embarrass the content creator (photographer, videographer etc.), the State of Hawaii, or HDOTA is strictly prohibited.

FOR ALL USE:

The following are general examples of what Media may not be used for or in connection with. The following list is not exhaustive.

• Taking or attempting to take Media for commercial, marketing, self-promotion, or novelty applications;
• Taking or attempting to take any action that results in editing or altering images -cropping is acceptable;
• Taking or attempting to take any action that compromises the website;
• Taking or attempting to take any action that involves reprinting on coffee table books, garments, posters, mugs, or any medium.

You agree that, upon notice from HDOTA, you will immediately cease all use of the Media and, to the extent possible, remove all Media from any and all materials in which they appear.

Credit is required for each of the Media as specified on this website. Credit must be placed adjacent to any use of the Media.

You, your successors and assigns, agree to release, indemnify and defend HDOTA and the State of Hawaii from and against all costs, liability, loss, damage, and expense, including all attorneys’ fees, and all claims, suits, and demands therefor, arising out of or resulting from your acts or omissions under these Terms & Conditions of Use and your use of the Media.

Seen at the Capital Jewish Museum

 Fundraising brochure, Jewish Community Center of Northern Virginia 1989: "You should invest in community property" with Monopoly theme:

"Face" sunscreen 2x as expensive as regular plausibly misleading when formula was the same

Akes v. Beiersdorf, Inc., 2023 WL 5000434, No. 3:22-cv-869 (JBA) (D. Conn. Aug. 4, 2023)

Akes brought the usual California claims/unjust enrichment, alleging that she was misled by the labeling of the 2.5-ounce bottle of Coppertone Sport Mineral sunscreen as “Face 50” to believe that it was “specifically designed” or “specifically formulated” “for use on the face.”

The label included: “FACE,” “Won’t Run Into Eyes,” and “Oil Free,” the latter two of which were allegedly “face-specific representations.” However, the sunscreen is allegedly identical to the sunscreen in the larger 5-ounce bottle, which costs half as much per ounce. Coppertone argued that the higher price couldn’t be deceptive and that “[t]here is nothing deceptive about emphasizing different but equally true aspects of a product to different market segments, or pricing products differently when sold to different market segments or in different retail channels.”

The court found it was plausible that the label implied that it was specifically designed/formulated for the face, not just suitable for the face—that’s a factual issue. “While labeling products ‘vanilla’ or ‘diet’ was found insufficiently specific to convey the particular representations that the plaintiffs in those cases asserted, here the use of the word ‘FACE’ on a lotion bottle is plausibly understood by consumers to differentiate between the intended applications of sunscreen—face or body.” Although the mere fact of different prices doesn’t violate consumer protection laws, it could contribute to deceptiveness: the price disparity plausibly reinforced the deception that the “FACE”-labeled product “contained more expensive but specifically formulated facial sunscreen.”

 

 

Paul Mitchell plausibly not "cruelty free" because of entry into market requiring animal testing

Heagney v. John Paul Mitchell Sys., 2023 WL 4947974, No. 23-cv-00687-VC (N.D. Cal. Aug. 2, 2023)

A smoothly written opinion:

As the complaint tells it, Paul Mitchell has long marketed its business and its products as “cruelty-free.” The plaintiffs say they took Paul Mitchell at its word and bought some of those products. But Paul Mitchell, they allege, once imported those products into China and registered them with the Chinese government—at a time when Chinese law required that companies test cosmetic imports on animals as a condition of registration. And, according to the complaint, Paul Mitchell was not exempt from that requirement.

Read together and taken as true, these allegations plausibly suggest that Paul Mitchell tested some of its cosmetic products on animals and that its contrary “cruelty-free” advertising misled reasonable consumers.

Maybe there’s another explanation, like nonenforcement, but that didn’t defeat plausibility.  This also allowed breach of warranty claims to survive. Although not all the purchased products appeared in the Chinese import registry, “in its marketing, Paul Mitchell doesn’t just advertise that it sells ‘cruelty-free’ goods. It also promises that it is a ‘cruelty-free’ company—that it has never done animal testing, ever.” Because of the plausible allegation that Paul Mitchell broke its first promise as to some products, it was plausible that it broke its second promise as to all.

Statute of limitations: Most of the alleged purchases were made within the three-year or four-year periods that applied, but even as to the others, the delayed discovery rule was plausibly invoked. “Unlike the kinds of claims you see in other false-advertising or warranty cases, a promise that a product is ‘cruelty free’ is not something that a customer can easily test.” And any reasonable and diligent investigation wouldn’t have disclosed the alleged truth:

No article that Paul Mitchell cites suggests that the company imported its products into China when animal-testing was required. One PETA article calls out three cosmetics companies for animal-testing in China but does not mention Paul Mitchell at all. The 2012 PETA press release comes closer, but it commends Paul Mitchell for choosing to “pull out of the Chinese market entirely than hurt even one animal.” If anything, these sources suggest that Paul Mitchell did live up to its “cruelty-free” mandate; they could not have formed the basis of the consumers’ complaint.

However, the consumers lacked standing to seek injunctive relief. Unlike other situations, where consumers might “reasonably, but incorrectly, assume the product was improved” and buy it again, or avoid an improved version, even if they would “like to,” because they can’t “rely on the product’s advertising or labeling,” here consumers couldn’t be misled by the historical facts, which they now knew. Falsity in the past about whether the product had ever been tested on animals remains falsity in the future. No change in ads or in the product could make a difference.

What can experts testify to in Lanham Act cases? Not the law or regulations

GOLO, LLC v. Goli Nutrition Inc., 2023 WL 4952576, No. 20-667-RGA (D. Del. Aug. 3, 2023)

Potentially interesting pretrial rulings in this false advertising/TM case: Goli’s motion to exclude the testimony of Dr. Jerry Wind was granted in part to preclude him from opining on the ultimate question of likely confusion or balancing the trademark infringement factors, which was for the jury. He could testify about the “consumer journey,” but not about “convergent validity” to bolster his conclusions about the meaning of the evidence—the court characterized the use of the phrase here to be “an academic way of saying the weight of the evidence.”  Although his opinions on harm were unquantified, they were tied to the evidence and opined on specific types of harm (loss of control of its brand, loss of distinctiveness, tarnishment, and loss of sales), which could help the jury. His opinions on intent and comparisons of infringement to “identity theft” were excluded.

An expert offered to support GOLO’s request for corrective damages was excluded. He assumed without further support that GOLO would need to generate a single impression to repair the harm caused by each allegedly infringing impression Goli generated; this was unsubstantiated, speculative, and conclusory. While corrective advertising is an available remedy under the Lanham Act, it isn’t awarded where the trademark holder has not demonstrated actual damages and where the alleged infringer has not acted in bad faith. GOLO couldn’t show any actual damages, and the expert’s opinions about the cost of a corrective advertising were entirely speculative, without any detail, and without any basis in studies about what that would require; he could have relied on someone else’s planned corrective advertising campaign, but none was submitted. The expert also didn’t “consider the impact of other possible forms of relief if GOLO is successful on liability, such as cancellation of the Goli marks, the use of disclaimers, or any other possible components of injunctive relief.”

Other experts were prohibited from testifying about FDA/FDCA standards, but could testify about their understanding of the studies they analyzed independently of FDA standards.

GOLO couldn’t prove any damages for its false advertising claims and therefore lost summary judgment on that aspect, but, unsurprisingly, the court found Dr. Wind’s testimony sufficient to show harm for trademark infringement.

Goli’s counterclaims that GOLO falsely made implied disease claims survived a preemption argument; they could be presented without reference to the FDA/FDCA (and had to be). Likewise, the court excluded any mention of the NAD, the California Task Force, and the California District Attorney—all of whom have apparently weighed in on some of the claims at issue.

Resort fees case survives on nondisclosure, not bait and switch theory

Hall v. Marriott Int’l, Inc., No. 19cv1715-JO-AHG, 2023 WL 4417265, -- F.R.D. – (S.D. Cal. Mar. 30, 2023)

Previous opinion in this case about allegedly deceptive/inadequately disclosed mandatory “resort fees.” The court ends up certifying an issues California class, but rejecting the damages methodology for calculating class damages.

Marriott’s booking process shows prices starting “from” a particular rate:

 

"from 420 USD/night" ad

Clicking on “view rates” gets further information:

 

still says 420 at bottom but now there's a message at top in blue

If a resort fee applied, a notice would appear at the top of the screen in blue, bolded text that is outlined by a blue box, stating “Please note,” “USD 35 daily destination amenity fee will be added to the room rate.” The second page in the booking process also reflects the available rooms (e.g., queen or king room) and corresponding rates, without the resort fee included.

Once a consumer selects a particular room, they arrive at the third page in the booking flow:

 

at last the fees are at the bottom in the total

The subtotal shows a charge for “USD/night” and a separate charge for “USD taxes and fees,” which includes the resort fee. A more detailed breakdown of the charges showing the amount of the resort fee is available if the consumer clicks the “Summary of Charges” dropdown box:

 

at checkout the total is correct

Plaintiffs alleged both that Marriott inadequately disclosed resort fees on its own website and on the sites of third party online travel agencies. They brought the usual California claims.

The court dismissed all equitable claims because plaintiffs lacked standing to seek injunctive relief, and the court lacked jurisdiction over the equitable claims because damages hadn’t been shown to be inadequate.

CLRA: Plaintiffs had two theories of deception: (1) bait and switch based on the initial ad for the room rate that was unattainable without paying the resort fee, and (2) inadequate disclosure of the resort fee—the blue box was in smaller print, a different color font, and at the top instead of next to the price information at the bottom. The “taxes and fees” disclosure was allegedly confusing because it does not explicitly specify “resort fees” and causes consumers to believe that the fees are entirely government related.

Theory 1: On the one hand, “explicit and conspicuous qualifying disclosures can render allegedly deceptive statements non-deceptive as a matter of law,” but, “[e]ven when there is no question that the initial deception was cured by a later disclosure, a company can still be liable for deceptive practices that cause consumers to be lured in and ‘swept up’ in the buying process.” The latter situation occurs when deception causes “consumers to invest significant amounts of time and become so swept up in the buying process that later qualifying disclosures cannot cure the original deception,” and is exemplified by a brick and mortar store advertising 40% off in the window, which led consumers to enter, shop, decide to buy, and stand in line.  By the time qualifying disclosures were made, the consumers were “invested in the decision to buy and swept up in the momentum of events.” The plaintiffs had spent 40 minutes or more shopping, waited in lines of 15 or more people, and felt pressured to purchase once they reached the front of the line due to embarrassment.

By contrast,  “Marriott’s disclosures regarding the total price of the hotel stays are conspicuously disclosed by the end of the internet booking process.” The initial “from” (which I think is deceptive, since it’s not attainable) was followed by disclosure of additional fees multiple times. The plaintiffs didn’t invest significant time in the purchase process—at most 10 minutes total, and the higher price appeared on the second page of the booking flow. The plaintiffs were aware that the price increased throughout the booking process.

However, there were disputed issues of fact regarding the deceptiveness of Marriott’s booking process and the adequacy of its disclosures. “Unlike its disclosure of the total price, Marriott does not repeatedly and conspicuously disclose resort fees throughout the booking process.” There were genuine and material factual disputes about whether consumers would notice and understand the disclosures due to their font size, color, and placement within the context of the entire transaction. “Indeed, Plaintiffs point to survey evidence, that approximately 50% of consumers do not notice these disclosures and do not know they paid resort fees.”

Negligent misrepresentation failed because nondisclosure is not the same thing as making a false statement.

Marriott could not be held liable for allegedly deceptive statements on third-party sites. There was no evidence that Marriott controlled how they presented resort fee information. Under the CLRA, vicarious liability requires evidence of “personal participation in the unlawful practices and unbridled control” over those deceptive practices.

Marriott’s class action waiver defense failed as to the named plaintiffs, but could still be raised as to unnamed class members. Marriott bears the burden of proof on this issue, and pointed to no evidence in the record that the named plaintiffs had notice of Marriott’s terms and conditions and assented to them; even the terms and conditions they purportedly agreed to were absent from the record. However, Marriott sufficiently preserved and maintained its right to assert a class action waiver defense against the proposed class members.

Marriott also failed to show a lack of reliance. A plaintiff can show reliance by showing that the misrepresentation or omission at issue “played a substantial part ... in influencing his decision,” or by showing that the misrepresentation or omission was material. A plaintiff need not show that “[the challenged] misrepresentations were the sole or even the decisive cause of the injury-producing conduct.” Reliance for omissions is satisfied if the plaintiff demonstrates that “had the omitted information been disclosed [the plaintiff] would have been aware of it and behaved differently.” There was a triable issue, despite testimony from the lead plaintiffs that they chose Marriott on factors unrelated to resort fees, such as total price. Although this testimony may demonstrate that resort fees were not “the sole or even the decisive cause” of plaintiffs’ decisions to book their hotel rooms, it does not establish that resort fees were not a “substantial part” in their decision making.

The court found that it couldn’t certify a nationwide class, but Rule 23(a) was satisfied with respect to a California class. The Rule 23(b) problem was predominance. First, the proposed class definition encompassed a “potentially significant number” of unharmed consumers who saw the disclosure, which might be about 50% on plaintiffs’ own survey. Second, the proposed damages model likewise didn’t distinguish between injured and uninjured class members. The expert calculated the total amount of resort fees paid during the class period, but not all of that would reflect injury.

Still, the court certified a liability-only class. “Most critically, all of the essential liability elements of Plaintiffs’ CLRA and common law fraud claims can be resolved on a classwide basis using Plaintiffs’ common evidence.” This would also advance judicial economy, given the small size of individual recovery and large numbers of individual class members.

IPSC Closing Plenary Session

An Author/Reader Conversation about Jessica Silbey, Against Progress: Intellectual Property and Fundamental Values in the Internet Age (2022)

Robert Brauneis: Three layers—(1) object of discovery: creator and innovator accounts, concerns, what kind of conditions support/hinder them in their work; (2) thinking about IP rules, particularly © for photographers; (3) economic & social vision; equality, dignity, privacy, etc are contrasted to hierarchy, subordination, exclusivity, precarity, commercialization. Changes to IP rules on their own in our world may have little effect on whether we go towards the good vision or the bad—cloud computing, network effects that cause convergence on a small number of intermediaries, and important tech that is protected by secrecy/real and personal property law/employment agreements. IP loosening could not have much effect/even help strengthen corporate consolidation. Norms/inculcation of values and other fields of law like antitrust might be more effective.

Questions about whether creators would agree—Lynn Goldsmith objects to Warhol’s use; maybe that’s an effect of being an unusual use compared to how photographers usually see their works adapted in art. Maybe it’s a sense of breach of contract, but the book describes more tolerance for reuse.

Silbey: ©, TM or patent becomes a device to assert certain things about yourself or your work. Insofar as people like Lynn Goldsmith or the ACLU are using IP to argue for certain justice goals, what IP is and what it’s for may be changing, even if the text doesn’t change.

Deepa Varadarajan: IP is a vital terrain for contesting fundamental values. As fiction author, struck by community norms among creative communities: creators routinely avoid the constraints of IP regulation and err on the side of more promiscuous sharing—fairer uses. But also less willing to tolerate uses “not in the same spirit.” Should IP law try to incorporate more norms, especially when defining a community is getting harder and harder? (Compare BookTok—are readers part of the fiction community?)

Trade secrecy: mixed up with commercial morality and relational duties, not just incentives—is this more receptive to incorporating the broader set of values described the book? Also intersects a great deal w/contracts. Contracts imposed on people w/lower bargaining power can get rid of the limits on trade secret doctrine; this is also a theme of the book—form contracts can undermine the rights and recognitions that creators seek. Pro photographers agree to onerous contracts from longstanding clients in order to retain them. NYT theoretically lost Tasini, but led NYT and others to require fee-free transfers. Giving more rights to authors didn’t give them more bargaining power against aggregators.

Michael Burstein: seems like disorganization is an issue—Conde Nast being able to impose terms on scattered photographers seems like a reason for discontent w/ private ordering

Rebecca Curtin: Important difference from tech upheavals of past. In manuscript to print, you can find readers anticipating what print will facilitate—the concept of an authoritative edition, the professional editor; readers wanted these things before the tech offered them. In Silbey’s book, the tech has lapped creative communities and begun to unravel norms central to creation and dissemination rather than coalescing them.

One lesson: Threats to privacy are threats to communities and practices that sustain creativity. The “clean air and water” of culture are at risk.

Michael Burstein: Presence in narratives of transactions as central—IP might be in the back seat. How the values come into play is less in creation and definition of IP rights and more in their flow, transfer through ecosystems. Equality: in discussion of equality, in Tasini, Roche, and even Kirtsaeng—the first two seem to have resurrected the romantic author not as creator but as transactor: each case claims to protect small creator/inventor, with little awareness of practical effects. IP law of creation isn’t telling the whole story.

Open arrangements/commons-based accounts are largely devoid of law and more about institutional structures/governance and self-ordering that is more than just in the shadow of the law.

Institutional precarity: Declining trust in markets, not in IP law. Creators experience these practices as coercive, hostage-taking, and the effect is on attitudes towards market structure. That’s the domain of other kinds of laws, like antitrust. Those markets obviously depend on definition of goods sold in them, and that can’t be ignored.

Public interest is often missing in anti-discrimination context like Eldred and Golan, and anti-subordination analysis like Tasini and Roche. Individual interest v. public interest opposed in those cases and in Kirtsaeng. Wonders if the baseline in IP renders issues of civil equality more difficult. It’s easier to identify superior moral claim in race/gender discrimination than in the public domain. These are policy choices, pushing IP closer to regulation than to property regimes.

Rosenblatt: power imbalance and the importance of collective action have become more central to our lives/scholarship. Ability/inability of creators to work collectively seems a recurring theme in addressing power imbalance. What does that mean for us as IP thinkers?

Josh Sarnoff: end of liberalism v. paternalism—we’re seeing that play out in IP. Paternalism in IP can be things like preemption overriding contractual waivers/overrides.

Silbey: wanted to reaffirm the idea of the public, not the public domain—we are all in this together, interdependent.

IPSC Breakout Session #5 Platforms & Interfaces/IP Enforcement

Xuan-Thao Nguyen, Tech Bros, Social Media, and the End of IP Financing?

Ideas are nothing without financing. Banks will not give loans secured by patents; banking law constraints. How was Silicon Valley Bank able to make loans to startups before its demise? Piggyback on VC due diligence, valuation. Funding round provides money to pay back loan; SVB also took a warrant on the startup itself—the right to purchase shares. If the value of the startup goes up, the value of the warrant comes up.

What will happen now that SVB collapsed? Operated in US, Israel, China. Note that access to funding was never equitably distributed for women and minorities. Nonbank lenders may come in, but problems are associated with that. Nonbank lenders demand higher fees and interest rates b/c their money comes from investors, not depositors. Bank loans are typically much cheaper. IP is considered very risky for loans—not good collateral.

Felix Wu: What should happen?

A: senior consultant for World Bank: banking law is not going to change. Banking focuses on deposits; we have to protect the depositors. The loans rely on quantifiable collateral. Lessons from China: patent office can work with bank and experts to value specific IP, issue a certificate, and the bank can then rely on that. Insurance policy. Can also have government provided guarantee.

RT: TM as collateral?

A: Has paper in Houston LR: an established company w/royalty stream can rely on them as accounts receivable. Even a new company, if they have customers ordering, the bank can use that as financing based on accounts receivable. The byproducts of the TM can be financed. But IP, including TM, are not viewed by banking sector as the type of corporate assets on which they can rely for lending.

David Stein, Rethinking IP Incentives Following a Process Shock: Lessons from Online Consumer Services

Software IP broke about 10 years ago and no one noticed. First divide in protecting implementation but not interface, for competition-based/network effect-based reasons. The problem is that this system fell apart around 2008-2012 when smartphones came out. Once I have a phone connected to the internet, I want my software available to me everywhere. Everything moved into the cloud. No need to bear all implementation costs up front, as there was before; can add or remove features over time, handle edge cases that develop. At the same time, the risk of copying essentially went away. Access to market is now about having enough computers to run the software for all your users. So now, we have lots of protection for implementation where we don’t need it and no protection for interfaces where new entrants can easily be copied.

It’s worse than that b/c of the difference b/t disruptive and incremental innovation. Totally new product: risks cannibalizing existing market; risks entire portfolio (example: Google Buzz—still in a consent decree w/FTC). That doesn’t exist for startups. That means small companies largely introduce disruptive innovations, while A/B testing of small changes favors size/economies of scale. Thus if a large company copies a small company’s innovation, it can accelerate faster than the small company and make it much better.

Recommendations: dump most precedent. Some need in installable software world, but if we’re worried about concentration and innovation in online spaces, the scheme we have doesn’t quite work. Like to see more protection for disruptive interfaces. Problems exist w/lasting IP rights in interfaces, b/c right to stop people from distributing software does create barriers, so misappropriation and unfair trade practices may be more suited.

Fred Yen: These interface problems have existed since Lotus v. Borland; pick a few examples that people can get their hands around, especially for a general audience.

A: you have to be a large incumbent before there’s a community depending on Lotus. Big difference is the direction of copying. If Lotus controls the market and people are dependent on it, then others need to support Lotus’s interface to compete. But that’s not the direction of copying he’s seeing—cool new interfaces by startups are copied by Meta and Google and Microsoft. That’s more problematic.

RT: Why is IP the solution space? Why won’t the big companies just acquire and kill startups unless there’s a structural remedy? Meta knows how to write a big check.

A: Cares about activity levels; ruinous copying decreases the incentive to try to get bought out. Thinks there’s too much copying—why would anyone buy when they could copy? [And yet they do buy, a lot.] Structural remedies mean that there’s no hope of being acquired which depresses innovation.

Jessica Silbey: Give a menu of options: reverse confusion protection for unregistered trade dress; improvement patents; etc. Much better for doctrinal gravitas.

A: could have FTC exercise its §5 authority; startups won’t use the law b/c they can’t survive the length of time it takes to bring a case.

Wu: not convinced there isn’t © protection for many interfaces; the lock-in effect may override that in a market dominance situation but that’s different from there being no protection.

Ben Depoorter, Copyright Small Claims Litigation: An Empirical Analysis

Goal: stick to infringement. Time frame ongoing; 428 cases so far. Reproduction and public display are the main alleged rights violated (with lots of overlap); only 71 derivative work claims. Smaller cases, under $5000, are more streamlined—only 1 Board member evaluates; 163 of the claims choose this. Statutory damages requested 22% of time. 71% pro se, 28% represented.

Few repeat players, but Joe Hand live entertainment is—business model is working with bars etc for live entertainment broadcasts. 7% optouts, but note that you don’t need to opt out if the claim is noncompliant.

Little evidence of trolling, opt-outs; many noncompliant claims.

Next steps: identify trends, decision analysis, damage awards, types of noncompliance.

Silbey: also look at who asks for the smaller awards.

Q: maybe optouts are lower because of risks of fee-shifting if the defendant makes a big federal case out of it. [registration status makes a big difference here]

A: generally, there is a selection effect—wants to track that over time. There are a lot of considerations; the opt out notice is an ad for the board—the CO warns about what can happen in federal court.

RT: asked about registration status—which would interact w/risk of fee shift in federal court. I just checked and the CCB does not explain the effect of a timely registration in federal court in its list of considerations about whether to opt out or not.

Number one consideration is what makes initially noncompliant submissions not try to correct.

Kristelia García, Imperfect Enforcement

What makes people underenforce—retweet fan videos instead of shutting them down? Mechanisms and benefits are similar in IP and outside. Unlike public enforcement discretion, private enforcement discretion/selective enforcement is not well studied or theorized.

Taxonomy: private enforcement can be selective, delayed, algorithmic; private forbearance can be nonenforcement by default or intentional; intentional can be ex ante or ex post. Comedians suing Spotify; tattoo artists suing videogame companies. Questions of reliance/implied license can arise from delayed enforcement.

Intentional nonenforcement: foreclosures are an example where there is nonenforcement, disproportionately in wealthier neighborhoods. Video game developers who allow piracy in hopes that users will buy in game content.

As with other forms of private ordering, selective nonenforcement does raise some concerns. Propensity for bias is obvious as w/mortgage enforcement. Sometimes it’s economically rational—wealthier people are better credit risks, so maybe they can get their accounts current and take advantage of loan modifications. Lack of transparency about reasons.

Advantages: decision in hands of party best positioned to evaluate. Valuable info to lawmakers about what industry cares about and what it doesn’t. Not every wrongdoing results in a loss.

Lemley: caution about any suggestion of use it or lose it—leads in TM to bullying and threats of lawsuits that are unnecessary and harmful. Larger issue: we have this nonenforcement b/c we’ve created an overbroad set of legal rights such that infringement goes on all the time. So we recognize that lots of copyright infringements are not worth enforcing, either not harmful or even helpful. If we’re not ok with that, think about narrowing the scope of the enforceable right.

Xiyin Tang: what’s the difference b/t delayed and intentional? Petrella seems to involve elements of both.

Alex Roberts: how does this play into a monitoring strategy? Aggressive monitoring v. sit back and wait to see what comes to your attention.

A: yes, and algorithms also come into that. Some pass it off to algorithms.

IPSC Breakout Session #4 Innovation/Copyright

Room 204 Christopher Buccafusco (w/ Joseph Blocher), Firearms, Innovation, and Regulation

How do law and markets affect the pace and direction of innovation for firearm related safety in the US? Costly inefficiencies in supply and demand.        

Virtually no one thinks the US has the right amount of gun violence, and the firearms industry has been and continues to be enormously innovative—AR-15 customization, ghost guns. But innovations to make the guns themselves safer have failed to appear. E.g., smart guns: thousands of people are killed/injured each year by guns fired by someone other than the owner. 1 of 6 police officers shot are shot by an officer’s own gun. 250,000 guns stolen annually and disproportionately used in crime. Shootings by children, suicides, etc. 2016 survey says 59% of Americans would be willing to buy a smart gun, including 56% of political conservatives and 4 of 14 gun owners.

Since the 1990s, manufacturers have been producing functional prototypes for user authentication of handguns, shotguns, and other long guns—facial ID/biometrics, codes, etc. But none reached the market despite millions in R&D from National Institute of Justice. Colt and Smith & Wesson had functional prototypes by 2000, followed by dozens of startups. But only last week did Biofire offer the first public sale of a smart gun.

VCs: Liberal, not interested in funding guns; more interested in software than hardware.

Demand: no buy-in from institutional investors like police forces; some purchasers are deeply hostile to smart guns b/c they fear gov’t will come for all other guns. Partly in response to NJ’s 2002 law—once there’s a smart gun, manufacturers have to switch to it w/in 30 months, though NJ backed off and just required retailers to stock it, but still infuriated gun rights advocates who boycotted Colt and Smith & Wesson who then got out of the market entirely. Established firms pulled out of the market, so startups can’t expect to be acquired and must go all the way to direct sales; there’s also fear of tort liability. Biofire isn’t submitting for registration in NJ to avoid triggering law.

Microstamping: tech that imprints a gun’s serial number on discharged rounds. 2007: Cal. required firms to included microstamping once DOJ certified that there was no patent on it; challenged under Bruen and dct overturned the law b/c it prevented people from buying state of the art handguns/not consistent w/historical tradition which was light on microstamping. Cal. isn’t even appealing the loss on microstamping.

Limits on internal innovation created opportunities for external innovation on safety (which is probably bad)—e.g., installation of Shot Spotter all over. $21 million in Louisiana to “harden” schools, half a billion in Texas; schools designed with curving walls to decrease damage done by active shooters; bulletproof backpacks.

Sometimes external environment-level innovation is more efficient: ramps v. stair climing wheelchairs. But many external innovations come with huge social costs.

We don’t have solutions; everything sucks. Maybe: subsidies for smart gun purchases? Institutional commitments from institutions like police forces?

Q: Europe?

A: some innovation does come from Europe. Is there demand in these other countries?

Betsy Rosenblatt: one story seems to be that innovation-forcing laws can inhibit that. Is that unique to this field?

A: No—seen something similar in disability as well. Tort tries to get people to make safer products to encourage innovation, but also leads to anxieties about creating new stuff b/c it risks litigation v. doing what everyone else is already doing. Boycotts are inhibiting Biofire—they have had to go fully direct to consumer b/c dealers won’t stock them for fear of boycotts.

Q: federalism story?

A: this is part of the challenge—innovation folks usually don’t have to think about public law and state v. federal.

Q: what about the military, which seems to be missing from this story? Probably a big buyer w/an interest in having still-lethal weapons that limit friendly fire and suicide. Where are they?

A: we are looking for an answer. They were very interested very early with Colt and Smith & Wesson. These are professionals who know how to handle guns, so the safety needs may seem less pressing, though that’s probably wrong. It’s become so politicized, and military is disproportionately “gun rights” folks. But senior leadership could decide to prioritize safety (maybe with negotiating not to trigger the NJ law).

Q: VCs are less liberal than people think, and politics take a back seat to economic opportunities, so why not?

A: the big problem is exit—Colt and Smith & Wesson don’t want you; you have to be Tesla and go to production. But the story that many of these people are telling is “we can’t get funding.” Maybe VCs don’t believe in the tech; the story: there’s money for mental health, victims, and school hardening, but people don’t want to be in the gun industry.

RT: [So one factor that might be silent here is outsourcing/contracting: b/c the military no longer makes its own stuff and seems institutionally incapable of imagining that it might, it is dependent on outside contractors, and if they won’t do it, too bad. That seems bad for reasons beyond guns.]

Mark Schultz, Video on Demand Services: New Frontiers in Regulation of Cultural Policy, Industrial Policy & Copyright
Streaming took off, and regulation was close behind, motivated by concerns about culture. New cultural policy in Australia, 2023: fear of voices being drowned out. Unlike free over the air TV, no requirements to make Australian content available.

Rising wave of interventionist cultural policies: European AV Services Directive, Australia, Canada have passed regulation and others are on the way. Argument: likely to fail both as cultural and industrial policy. Building on other work on cultural and economic policy by Pager, Park & Messerlin.

A better way: decentralized policies that promote local capabilities—the strong preference for local content can be competitive. Korean success story.

Two models of cultural policy/industrial policies. First, interventionist: on the content side, subsidies (French film industry), content requirements, language requirements. Industrial policy: local content quotas; local investment of profits (streamers must invest percentage of revenue, not profits, locally); local production requirements for location, personnel, financing; terms of trade (retention of copyright, exclusivity limits—streamer can only have license for limited amount of time, investment limits on how much streamers can invest in local companies); import quotas; screen quotas; prominence requirements (local content must rise in search results).

Second, decentralized—there is no country that is purely noninterventionist; everybody does something. But broadly, market based, focused on private investment, content neutral; largely hands-off except for granting ©. Some countries like Korea invest in building creative skills and technical skills, building studios and other infrastructure; tax breaks; promotion, marketing, and other related capability policies.

EU AV Services Directive requires streamers to include at least 30% “European” content. Permits member states to require re-investment of streaming revenue locally. France has required 20-25% reinvestment, Italy considering similar marks. Regulating terms of trade also permitted, including © ownership/exclusivity/restricting investment in local productions.

Canada, Bill C-11 passed. Regulations in progress: local content, if similar to broadcast will be 35-50%. Local production requirements: not enough to film it here. Must have Canadian producer making decisions; a point requirement where you get points for, say, screenwriter, which leads to certain market distortions.

Hasn’t worked well as cultural policy and thus fails as industrial policy. Sean Pager’s work: as France increased subsidies, its share of its own box office relative to American share went down. The argument has been that the French had incentives to create content based on guaranteed subsidies so there was no incentive to create material that was appealing to audiences, especially in comparison to American films. The subsidy trap: the bureaucrat is your audience, which leads to a certain type of filmmaking (not Scorcese or Spike Lee; willing to take bureaucrat’s suggestions). Censorship isn’t the main problem—even when the cultural bureaucracy is insulated from politics, the office culture has its own office politics and may not be interested in what’s appealing to the local public. There are also cronyism and quota problems: when you have a quota, people may take advantage of that to make quickies on the cheap w/low production values.

The Emily in Paris problem: The dodge where you make the content in the country but not for the country. The Falcon & the Winter Soldier—set in Eastern Europe but about who is the right person to have Captain America’s shield.

Distorting local investment: local filmmaker complains it makes it harder for locals to compete. Streamers are paying local actors more than local producers—maybe that’s good but it does divert from local-inspired content. Can pigeonhole locals/block them from opportunities. Margaret Atwood: book by a Canadian, filmed in Canada, but it didn’t count b/c scriptwriters weren’t Canadian.

Korea as success story: Language unique to Korean peninsula; relatively unique culture. First swept through Southeast Asia, Japan, China; then US, Latin America, Europe. $12 billion/year in exports, plus soft power/tourism.

Decided in 1993 to focus on culture as strategic sector. Indirect support: tax credits and incentives for private investment, including micro-investment; pushed chaebols to be involved, which they were until the financial crisis when most spun off those parts. Direct support focused on infrastructure and human capital: production facilities, training, export promotion. This is the model with the fewest unintended consequences. It’s lowbrow/mass culture, sure. Most countries do mild subsidies to preserve certain forms of culture; but media sector shouldn’t be dependent on those subsidies, and ultimately time tells what it is highbrow or lowbrow.

To avoid the mistakes of interventionist policies of the past, national governments should promote cultural industry capabilities, but avoid picking winners in ways that make creative industries complacent.

RT: I find this convincing but I’m interested in what a French bureaucrat would say in response and your answers.

A: France would say: We make great stuff. We make real art. True: The Francophone Africa film industry has produced beautiful movies, but no Africans ever saw them: Nollywood is more popular and tells “African” stories. French might also point to the fact that, in countries where they dropped controls, American movies flooded in—as in Mexico, where film industry struggled. Mexican gov’t didn’t do Korean-style policies, though it did promote telenovelas.

Revealed preferences: if people don’t go see it, does it matter?

Q: why not delegate to experts about what would be good, not necessarily popular?

A: experts tend to have their own strong preferences. German cultural bureaucracy would finance either old German operas or really avant-garde productions.

Rosenblatt: What’s the role of unions?

A: good question—maybe some interaction.

Rachel Landy, The Innovation Void in Downstream Content Markets       

Music: Same product, at same price, from three main companies in our lives plus Spotify. Live online TV has more variation in price, channel options, etc. What about a $4.99 monthly for nothing but catalog, no playlists? What about a jazz service or a metal service? Record industry’s role in suppressing innovation. Labels’ conditions prevent innovation. High concentration—3 dominant labels with must-have catalogues. Each can veto an entire business. They are complementary oligopolists: Cournot complements—you get even more market power and leverage. Coupled w/desperation to get back to pre-digital levels of control. You see ratesetting and other key license provisions.

Each label enters into an agreement “independently” with each service, but there are standard terms. A large up-front minimum guarantee payment, often in the hundreds of millions. There’s a revenue share for recoupment against minimum guaranteed; the revenue shares have most favored nation principles, which allows them to know how the other labels are pricing. Labels keep any overage, known as “breakage,” and it’s unclear how much if any is shared.

Super-narrow © license. Services have to get permission from each label for any new feature or functionality that invokes the catalog, and again this facilitates information sharing.

Trust: repeat players, reputational sanctions, reciprocity—deter innovative options. Result: higher end-user prices. Barriers to entry, and less innovation by incumbents b/c so much is being extracted: 55% of revenue. Also harms indie artists; incentive to promote major label content to recoup the guarantee. The labels have seen their own costs go down—no pressing records; the services pay for the infrastructure.

Solutions? Consent decree frameworks; statutory licenses; antitrust law reform against tacit collusion; MFN clause ban. Incentives to defect? We could tax the breakage that can’t be tied back to any content on the service. Could tax the surplus made through the MFN; might encourage labels to drop guarantees to a level where they could actually be recouped. Transparency of parallel contractual provisions might also help.

Tang: There’s more innovation than you say in music—you’re only talking about premium streaming services, but not iHeartRadio, free Pandora, Amazon Prime bundling.

A: for webcasting, there’s a statutory license with some protections built in though they also limit innovation. Those are also controlled by the labels and subject to more restrictions than the premium services are b/c the labels want to funnel people to the paid subscription. There are other parts of the industry where innovation is flourishing—where the labels can’t do this—TikTok or YouTube UGC.

Kristelia Garcia: the tax thing is intriguing—are there similar examples?

A: tax as a tool we often look to for encouraging/discouraging behavior; cigarette and other sin taxes. Congress loves to amend tax code and not so much ©.

Blake Reid, Copyright’s Periphery

Copyright on a dying planet. Looking at 1201 triennial rulemaking: 15 years of trauma before the Copyright Office discussing far ranging areas of law and policy: environmental regulation, disability rights, medical devices—far from concerns of ©. We’re trying to do serious policy and somehow we’re funneling it through the distorted lens of ©. © routinely infects policy areas outside its core of incentivizing creative works. The 1201 review illuminates the problem.

1201 creates paracopyright liability for circumventing tech protection measures that control access to © works. There’s no protection for circumvention aimed at noninfringing or fair uses in most circuits.

2021, there were 21 distinct exemptions, including traditional categories (motion pictures, video games), but a lot of literary works as computer software. Worth emphasizing that a lot of these exemptions are not new, but have persisted across multiple rounds of rulemaking. They show the © periphery.

Intended beneficiaries are often small/individual—film critics, documentarians, disability services providers, people w/disabilities, farmers, repair techs; often public-facing, they often care about complying with the law and require degree of legal certainty; they often produce public goods like privacy, education, agriculture, data security.

Many of these uses are functional and uncontroversially noninfringing: functional uses and modifications. Unlocking, jailbreaking involve only glancing uses of protected works and are incidental to the use: the fact that you need to use the software on a tractor engine to repair the engine is just incidental. Facilitates uncontroversial uses like reading that might be required by other laws like ADA. Or exposes/tests vulnerabilities of TPMs and software—used to evaluate and diagnose software. Many uses are noninfringing but not subject of direct case law.

1201 requires Copyright Office, which doesn’t look at fair use particularly charitably, to determine that uses are likely noninfringing. B/c these uses and users are public facing and often chilled ex ante, there is often no case law on point.

Why do rightsholders object to exemptions? The review is really contentious despite the noninfringing nature. Objection 1: speculative abuse of exemptions—encourage infringing behavior adjacent to but beyond the bounds of the exemption. Across decades, no instance of this has been identified where a bad actor purports to rely on an exemption. Objection 2: non-© policy motivations for regulating: 1201 is a proxy for other policy issues like DOJ treating 1201 as belt and suspenders for CFAA defense against hackers, as if Russian gov’t cares. Concerns about vehicle modification violating pollution regulations; FDA worrying about medical devices. Explicitly beyond scope of © and institutional context where Copyright Office isn’t capable of evaluating; it tries to do so under 1201’s catchall provision. Why is the Librarian of Congress in charge of deciding which cellphone you can use? It’s supposed to consult w/NTIA, but routinely rejects NTIA’s recommendation.

Objection 2.5: non-copyright policy interests of TPM deployers/rightsholders: disclosing security flaws might be embarrassing; right to repair might allow independents to compete with authorized repair.

Objection 3: non-copyright micromanagement of user/circumventor activity. That’s a result of a sense of entitlement from exemption opponents to control how users behave. CO builds a miniature regulatory scheme into the exemption, e.g. for text and data mining—security practices and accreditation requirements for researchers.

What could we do to wall off the periphery?

Lower the bar for securing/renewing/expanding exemptions; encode more in statute.

Cover development of tools.

Eliminate 1201 or require an infringement nexus.

What would bear on copyright more broadly?

We should consider specific exemptions/limitations for categories of users likely to engage in the production of public goods, knowing their uses are likely to be especially sensitive to liability risks; specific exemptions for functional uses; new institutional contexts for assessing fair use ex ante—declaratory judgment attempt in CASE Act was an unsuccessful but interesting trie.

More muscular policymaking in non-copyright congressional committees—don’t defer. Even where there are complex fair use and doctrinal issues, AI is an example where the policy equities are far beyond © and fair use’s capacity to address, like labor and privacy.

Zahr Said: Why are you conceding that this is on the periphery? Post-colonial theory makes it feel like a concession.

A: experience of triennial review, which represents a long dedication from a lot of communities who band together. All that engagement with the core gets indifference from actors who are at ©’s core. They’ve tried but there is so much skepticism and distrust for exemption proponents.

Charles Duan: it’s cheap to use DRM and get the value of excluding people from an entire device. “Cheap Exclusion”—relevant paper. Value disconnect.

A: I’m skeptical that they’re really getting much value out of this [Duan and Rosenblatt: They think they do!] Some of their claims are just ridiculous—using 1201 to stop password sharing on Netflix is never going to happen. There are no 1201 lawsuits about that, or about anything really. Used for B2B disputes. But it’s cheap to send someone to the CO.

RT: (1) It’s true that the participants sincerely want to comply with law/are often risk averse, but the perverse thing is that participation has to be combined with cynicism about tools/distribution: everybody agrees to ignore the distribution. (2) As for the characterization of “periphery”: The terminology makes sense to me because these issues are beyond c’s boundaries: none of c’s business. Maybe there’s another discourse about boundaries—this is an invasion. (3) One thing that’s valuable to the industry is not to lose, ever, and that may explain some of the dynamics.  

Buccafusco: dividing the world into software and nonsoftware might make more sense—allowing © in software is a key problem. Ripping DVDs is at least plausibly in c’s wheelhouse.

A: yes, probably an original sin, but probably a bad idea to design 1201 to protect distribution of video as well.

IPSC Breakout Session #3: Distributive Effects/Art and Music

Bita Amani, Some More Equal Than Others: Critical Contexts for the (False) Promises of Intellectual Property Rights       

IP and sustainable development goals: What is equality itself? Often formal equality is presented in the pretext of equal application as if IP were immune from feminist and critical race critiques. IP rights define boundaries of exclusion, inclusion and belonging, tied to nation-state building. Substantive equality is in many international instruments, and can be found in the exceptions for the blind/print-impaired.

Alfred Yen, A Federal Rules of Evidence Perspective on Forensic Musicology and Music Copyright Infringement

Juries hear a lot of forensic musicology evidence they shouldn’t which confuses them and leads to poorer decisionmaking in music © infringement cases. Contrary to FRE, experts testify about subjects w/in their competence that are irrelevant; experts testify about subjects that are relevant, but beyond the expertise of musicology.

Why? Courts make errors about the law of infringement, leading them to think that certain things are relevant when they are not. Courts also have mistaken assumptions about the field of musicology; abdicate their duties under Daubert/Kumho Tire.

Musicologists in litigation: (1) identify formal similarities—instrumentation, chord progression; (2) opine on how aesthetically similar/significant those similarities are; (3) opine about the rarity of similar features; (4) opine that copying did or didn’t occur.

The case for forensic musicology: expert music testimony bears resemblance to handwriting analysis; they can both identify and evaluate similarities. At some point, the similarity is enough to say it’s the same source—same writer or same work. We assume an expert can better ID similarities that prove or disprove the proposition in question.

Legal mistake: collapsing copying and improper appropriation, primarily through imprecise use of substantial similarity. Same concept of similarity governs both elements of the copyright claim! When the expert witnesses testifies that the two works are aesthetically similar, that’s not relevant to copying—not every piece of aesthetic similarity is probative of copying—same instrumentation of drums and electric guitar for a rock song. But once this happens, the jury starts to think that, if they sound a lot alike, they must be copying. Jury misled into thinking that aesthetic similarity, not probative similarity, establishes copying.

Mistaken faith in musicology: let’s find an expert to talk about copying. FRE 702: testimony must be product of reliable principles and methods and expert reliably applied methods to facts of case. Musicology articles talk about copying all the time. Typical “accusation” is that they identify similarity. There is no method of convincing; it is pure intuition. Not product of reliable principles or methods. Not reliably applied—what constitutes proof is entirely up to the expert. Good musicologists do things like examine handwritten manuscripts that show drafting, not listening to two different pieces of music dozens of times.

Which similarities matter is up to the analyst and how many similarities matter is up to the expert; this is the kind of ipse dixit that district courts shouldn’t allow. Couldn’t test it if we wanted to. At least w/handwriting we can test them on real exemplars. Do we include the chords or not? Does it matter if similarity is only in theme and not in chorus?

Secondarily, what about rarity? When a musicologist says “I’m not saying these are copied but these similarities are really rare,” if they’re making an empirical claim, their foundation is shaky. [Chris Buccafusco and I have a paper in progress about this.] You’d want a big sample or a representative sample to make such a claim, but no one has such a sample. Second, musicologists claim expertise not by looking at representative works but unusual works—the leading examples in the field, not garden-variety examples. Defendant can do this more concretely by showing common examples. P would need reasonable claim to comprehensiveness or representativeness, subject to cross-examination.

Calculating probabilities is even shakier—notes aren’t randomly distributed and the chance that one note follows another is not independent of the note. Also, the fact that something is unlikely in any given instance doesn’t mean it’s unlikely to have happened by now: law of large numbers. If you’re one in a million, there are over 300 of you in the US, so the chances of overlap are really quite large.

What’s left? Musicologists should be allowed to testify to the existence of formal similarities, but not on aesthetic similarity or significance; about rarity if they have a foundation; not about whether copying did or didn’t occur.

Thus: here are similarities; here is some information about how common those similarities are; now the jury decides. Could also bifurcate into copying then improper appropriation.

What if anything does this say about sufficiency of evidence/ability to survive sj?

Betsy Rosenblatt: hinging on experts is wealth-dependent; is there any way to get rid of that reliance? Maybe special jury forms.

[in response to Q] If musicologists have this problem the rest of us do too. This is often poor res ipsa analysis.

RT: bifurcation might not work well b/c copying drives so much, but worth testing empirically.

[rarity: the inferences are unfounded—that is, what’s the point of testifying about rarity? It’s either about copying, which they don’t have the data for, or aesthetic similarity, which they shouldn’t be testifying about.]

A: Evidence saying: A brick is not a wall. Stuff that isn’t proof but that is relevant is permitted. Goes back and forth on whether rarity is relevant to an overall determination even if the ultimate conclusion is beyond the expert. That’s why he’s interested in the expert’s foundation.

Kristelia Garcia: the bullets you give apply to the plaintiff’s side. But defendants’ experts are doing something completely different—identifying prior art, which cuts off the need to identify whether there was copying. This can lead to settlement/end of cases: Even if there was copying, we don’t know they copied from you! The musicologists are now completely split into P and D sides.

A: that’s what tells me they are unreliable! But prior examples do at least provide a foundation for testimony. But do you need an expert to infer lack of copying if it’s already out there ten times?—either the plaintiff doesn’t own it or the defendant didn’t copy it from the plaintiff or it increases the inference that it was coincidence.

Garcia: most D expert reports don’t opine on whether there was copying, just on existence of prior art.

A: not as critical of that; allowing dodgy evidence to push a case forward is his target.

Amanda Levendowski, Open Source Perfume         

Not a conventional copyright negative spaces story, but not a proprietary space either. Perfume is exclusive and exclusionary; perfumers are more scarce by some counts than astronauts; most are white men who trained in a small town in France.

Primer: Le Labo is a “mainstream perfumery,” not niche; owned by licensees Estee Lauder, designed by outside “nose,” who works for a “composition house” that develops perfumes for other people. Santal 33: Composed of “notes” with top, middle, and base, with an “accord” of sandalwood etc. notes to create a specific type of scent. Fragrance family: woody.

Proprietary perfume: Iconic hues are functional, so unprotectable. Method and “captive” molecules are patented by composition houses, but rarely by perfumeries. Fragrances aren’t fixed, which undercuts copyrightability—Chanel ad “the fragrance becomes you.” Trade secrets can’t deter competitors or composition houses w/GC/MS machines that can discover the formula, but they prevent aspiring perfumers who don’t have the machines from sampling scents—they’re only available in large quantities and they are often not sold outside of commercial contexts.

Shalimar: white guy from France who never visited India creates a fragrance inspired by an Indian ruler who loved his wife. Colonialism/exoticization—the fragrance family “Oriental” was coined by the nose to describe the family of which Shalimar is a part, and it’s been dropped by the house but still in use elsewhere despite protests.

Perfumery can be democratized, though. Open Source Smell Culture: perfumers can share formulas using CC licenses. CC has limited impact on formulas, but applies to evocative descriptions and destroys trade secrecy. There are ways to make these more shareable/accessible to aspiring perfumers.

Glynn Lunney: why use an existing open source structure?

A: resource constraints—but open source hardware only has a set number of licenses, and probably won’t create one for perfume. Thinks that perfumers can get by with existing CC licenses; tailoring a perfume-specific license could come later.

Q: does Le Labo go after dupes/smell-alikes?

A: Dupe houses exist—a lot of protectability comes from trade dress/branding/packaging, not from the scent. Dossier is a classic dupe provider. Houses don’t like when you borrow an accord; that will get more attention than a straight dupe.

Q: you can rent a GC/MS machine.

A: but aspiring perfumers don’t know that “shooting the juice” is even a thing. Until you get deeper into subreddits of perfumery, you won’t find out these machines give you a formula. And even if you get a formula to work with, it gets hard/expensive.

Q: suggestion you describe the people you are discussing in more detail—not familiar with chemistry until they get there, often marginalized.

Emma Perot, Music Copyright Ownership: Factors Behind the Surge in Writer Credit and Rights Clearance

Why so many writers on songs? Why so many interpolation credits? Law is part of it, but industry factors also affect this. Blurred Lines had a big impact in legal circles and in public opinion. Other big cases: Led Zeppelin, Katy Perry, Ed Sheeran. Before Blurred Lines, disputes over sampling: Bridgeport v. 9th Circuit; standard for originality is contested; subconscious copying accepted; access in the age of the internet is tricky.

Still, high standard for striking similarity, and inverse ratio overruled in the Led Zeppelin case.

Risk mitigation: add writers preemptively to avoid a problem; clear samples; add writers where accused; add writers to protect reputation whether the legal standards for infringement are met or not.

Practical influences: “change a word, take a third”; producers now part of songwriting process; songwriting camps; files shared digitally can be altered by many; sampling/interpolation as common techniques.

Change a word, take a third: producers/managers/artists may take credit to get revenue. Big artists ask for 20-30% credit even when not present for composition. Producers are in the room too, creating music and beats, b/c of how tech and creative processes have changed. Common in hip hop and R&B but now the norm in pop as well. Producers now may make their own songs, eg DJ Khaled.

Songwriting camps: labels bring people together for a specific project. Rihanna’s Rated R album: over a dozen people gathered in California for 2 weeks. Inherently leads to many hands being involved. Norm in Nashville but more recent in pop industry. Used in Kpop—network of 700 songwriters. Need new material very quickly.

Files shared digitally, encourages more editing; their contributions are credited.

Sampling: labels encourage use of existing tracks; listening audience likes nostalgia; past hits are a recipe for success; catering to social media and music streaming algorithms like TikTok charts; remakes of relatively recent songs are popular.

Dynamics are risk mitigation—do not lose money—and practical revenue maximization—make more money.

Tang: is this more songwriters per song or pop song?

A: Billboard top 100, not only pop but that tends to be the source.

Q: can you look at whether rise in hip-hop/R&B accounts for increased number of writers? More collaborative.

Q: Big artists demanding songwriting credit—songwriters get so much less from streaming. Why does Beyonce care about songwriting when it’s so much less than what you get from the recording on streaming?

A: may be that streaming is making less than normal analog sales. Artists still like to be known as songwriters b/c it adds to their reputation.

RT: Labels may see this as getting something for free b/c the songwriters’ share is set by statute/agreement, so they can readily give away money that would otherwise go to a smaller number of songwriters—are there any costs to the labels? Even when they front the costs, do they deduct it from the artist’s revenues?

A: yes.

Rosenblatt: a lot of self-dealing—licensing samples from yourself so you can pay yourself. Real question: why aren’t we seeing WFH? [I thought we were with Spotify, at least.]

Newman: coauthorship isn’t purely a matter of contract, though it’s true that we rarely second-guess an agreement. But it sounds like the industry has disregarded the theoretical rule.

A: songwriters have tried to push back, but not with success. But there are questions with reversion rights. Can the real songwriters terminate?

Chien-Chih (Jesse) Lu, Determining Music Copyright Infringement in the Taiwan Context

Sleeping Beauty case: P performed song at school in 2001; D, also a student there, composed a melody 90% the same. District court found that access had not been proven. Did not adopt rule of striking similarity; did not accept “reasonable probability of access” as relevant standard. The district court wanted a particular chain b/t the P’s work and “wide dissemination.” But there was no evidence that the work was in an archive or library. Although the performance was recorded on CD, and became a sensation after the end of semester performance, the district court assumed he work had not been widely disseminated. Needs more flexibility, where there might be no records.

Liangshan Love Song Case: local tourism office invited P and D to compose; D took P’s version and changed more; differences in composition didn’t affect similarity of main melody. But we need to figure out who is the original author. Without a registration system, it can be difficult to identify who came first.

Taiwan’s copyright law has changed over time for the same reasons US did. Developing country shifting from farming to global markets, manufacturing and tech. Adopted IP rules to fit into global system. Criminal IP enforcement was very strict in order to fight image of “pirate kingdom.”

Taiwan should adopt the idea of “striking similarity.” Use a reasonable standard to demonstrate what is highly suspicious. If the degree of similarity is not high, more substantial evidence of access should be required. But if the degree of similarity is high, only reasonable opportunities should be required. Judges sometimes hire experts in Taiwan, could be used for substantial similarity. Amicus briefs can also assist the court.

Another issue: not a focus on actual harm. Instead of civil litigation, Taiwan copyright owners tend to raise criminal cases to get stronger penalties/save money. High cost to public interest b/c criminal prosecution is carried out by prosecutors and increases judicial workload.

Last issue: Taiwan has no registration system; registration could help with information problems like questions of authorship and ownership. Gov’t is interested in improving licensing, but focused on TM and patent. Ministry of Culture might be better home for ©.

RT: I worry about infringement creep—we have seen in the US claims of striking similarity of 4 note sequences, which is very different than 90% overlap. Maybe striking similarity is acceptable for 90% overlap, but it is very risky to use a sliding scale without having a very strong lower bound for what is potentially actionable.

IPSC Breakout Session #2: mostly copyright and then marijuana innovation

Michael Carroll (w/ Peter Jaszi), Fair Use After Google and Warhol

Codification is a big deal; clarifies that fair use is a distinct doctrine, whereas well into 20th century courts were using it as noninfringement. Courts weren’t using four factors before that. And it creates statutory construction issues that justify SCt intervention, which hadn’t happened before.

Early stage: focus on fourth factor—fiscalization—Sony arises as secondary issue/throwaway piece in context. Harper & Row gets litigated as a First Amendment/free press case by Floyd Abrams; Court relies on Nimmer. Campbell is the first case that squarely presents §107 construction without other distractions, and the Court takes a fresh look.

Warhol reinforces transformative uses; creates a straw man version where new meaning or message is enough and rejects that, but he didn’t see that in the lower courts anyway. The movie adaptation of the book isn’t inherently fair use. Likely to see the vocabulary of whether the secondary use is for a “distinct purpose” increase in future cases, but functionally, it’s the same inquiry as in previous cases. Court chose to rule quite narrowly in part b/c of concessions during litigation. Second Circuit had buyer’s remorse about Prince v. Cariou, but by only affirming the judgment, Prince v. Cariou is still arguably good law w/the exception of the relevance of artist’s intent. Emphasis on narrowness of opinion—the only use we’re ruling on—suggests that we need to take them seriously, and the concurrence wants to drive that point home. So he doesn’t think this undoes the progress of Campbell and Google v. Oracle.

By defining purpose only as licensing image of Prince—use in a well-structured conventionalized market—the majority gets to be dismissive of the dissent; it doesn’t matter how much Warhol contributed b/c he created a substantially similar image which is now competing with her photograph.

The analysis does raise the level of generality issue: how do we decide what the purpose is? The dissent is very concerned about limiting available distinct purposes—Whelan v. Jaslow distinction between idea/expression. But he doesn’t see that in majority and its emphasis on the specificity of the use. The majority says that limiting doctrines account for Kagan’s examples—which involved use of expression—as well as the dissent’s own copying and the Court’s too.

Commercial use in well-structured conventionalized market in which the © owner’s work participates, then the first factor will weigh against the use absent some additional justification. Google added interesting things under the fourth factor. Purpose is now to be determined by objective evidence; Court says nothing about what that might be.

RT: Does the Wind Done Gone have a different purpose from Gone with the Wind? It participates in the same conventionalized market.

A: b/c it’s not a substitute—it appeals to a different market.

RT: but no one would read WDG w/o having read GWTW. And we could make up a reason why they’re substitutes the same as the Court made up the idea that one would choose between the Warhol and the Goldsmith photo.

A: it’s a different experience.

Matt Sag: Why do you think the holding has to do w/markets? Court also says: Difference can’t be a matter of degree, can’t be new aesthetic—he sees that as explicit rejection of Cariou. We don’t even get into the market stuff.

A: but the holding is specific that this is only about licensing in commercial markets.

Rosenblatt: does factor four do anything that factor one doesn’t do under this analysis? Your answer was that the two works didn’t compete.

A: to the extent you think purpose still counts as transformative, it’s a different user experience than the original.

Jessica Silbey: same work in different uses will sometimes be fair and sometimes not?

A: yes. They chose not to say the making was not a fair use, hanging on wall, and use in art history book—seem to be conceded fair uses at oral argument.

Silbey: what about the language of the case about the necessity of the use? Seem to demand need to take Goldsmith’s photo as opposed to any other photo. That goes to why Warhol took it not why Vanity Fair took it. You’re reading rationality into the opinion where there’s a lot of inconsistency. Justifying the use goes to the commentary aspect.

A: b/c he’s not commenting on her photo, his justification for using her photo is lower.

Hughes: Why is GvO broad and Warhol narrow? Neither case says it’s broad or narrow.

A: scope of QP, since Warhol is only factor one and decided as only licensing uses.

Zahr Said: what do we do about risk aversion as a result?

A: on the ground, have to give individualized advice and write up guidelines that make similar arguments.

Fred Yen: Wish the Ct had been honest that it thought Warhol was garbage and not transformative. All the other bits are disguising the Ct’s appraisal of the value of the Warhol work, the very thing it says no one else is supposed to do.

A: we have to give meaning to the verbiage.

Yen: no we don’t, not as scholars. Don’t say the text of this opinion reveals the truth of fair use.

William Henslee, The Transformation of Transformativeness: The Implications of Fair Use on AI

Fair use should be limited to uses in the preamble of 107; has become a catchall for ripping people off. Sony v. Universal was wrongly decided and there should have been a blank tape royalty. Campbell was transformative as a parody. But using 100% of another’s work shouldn’t be allowed; transformative became the main event. But any lawyer can generate a reason that there is a transformation. Must add something new to the original work. The fourth factor is about economics; the first factor should be about artistic expression. Warhol licensed the photo b/c he knew that if he wanted to use another’s work he should pay for it. [This is a factual misdescription—Vanity Fair licensed the photo and sent it over; the public record does not contain details about what Warhol knew/believed.]

Recently, lawyer got in trouble for submitting AI-generated legal argument. But data mining has been found to be a fair use. Data mining legal documents, work product, court cases, and then create work based on previous work. The input was copyrightable; the output is not. Taken copyright-protected material and transformed it into public domain material—dangerous for law firms.

Copyright for humans only? We do have WFH, and could say that someone does own the AI output as WFH. Other solutions: statutory license for sampling. Bridgeport is a great case; 9th Circuit was wrong. Fair use is a failure b/c the only way to know if something is fair or not is to litigate to the Supreme Court, and you might not know even then. If we’re going to have © for computer code, we could have a different fair use rule for code.

Bob Brauneis: the preamble says “such as,” and it doesn’t have a unifying principle—teaching, including multiple copies for classroom use, is very different from many of the others. Hard to get a narrow rule out of that.

A: most of those categories are nonprofit. Parody should be on the list, as comment and criticism, and some commerciality is ok.

Chris Newman, Fair Use: Against Weighing

Balancing rhetoric is mostly not useful; use factors to describe outcome that they were already heading to by intuition, or they gravitate to one part that they treat as dispositive. Not everything has to be transformative to be a fair use; we’d be better off focusing on why that is than focusing on rhetorical sleights of hand. Instead, we should think of factors as lenses for triangulating on same object—they’re interrelated aspects of the same question. We should never find factors pointing in different directions; they should be reconciled not outweighed.

Breyer in GvO is model: discussion of nature of copyrighted work should provide a qualitative grounding for the analysis and for distinctive lines of precedent for different types of work.

You have to know what you’re looking for and we don’t have a clear articulation of what we want from fair use. Wants to give mid-level frameworks to guide analysis but that aren’t so restraining that they can’t evolve and cover new situations. There are actually two different paradigms of fair use and we should analyze them separately, even when one case raises both.

What are we looking for? “Supersedes the objects” of the original = not fair use. Two dimensions: internal, expressive objects of the work—what does it do for the person who consumes it? Folsom paradigm. Originally this was internal to substantial similarity, and it still is and should be until we get a better notion of substantial similarity—claim construction/scope/boundary—charting boundary b/t derivative works and things changed enough that they aren’t w/in the scope of © owner’s rights. If there’s enough change, it doesn’t matter if it’s commercial.

Separate set of problems: external, instrumental—Sony paradigm. May be using same thing for same purposes but it can still be ok. What is the © owner justly entitled to and to what extent are you interfering with it? It’s a nuisance analysis. Nonexpressive use and market failure are part of this analysis.

Folsom: Story is clearly just focusing on the idea that, sometimes, infringement is prima facie quite difficult b/c the boundaries aren’t clear. Transformative fair use ought to be limited to this inquiry: have the original expressive purposes/concrete expression used to further those purposes been altered beyond the proper scope of the © owner’s claim? Social value isn’t relevant to Story’s analysis—it’s still the same work with the same expressive purpose. If it is transformative, we don’t care if it’s commercial; if it’s not transformative, we care about social value. Transformativeness should ask whether the content changes serve some expressive purpose distinct from the original or its derivatives and so the resulting work is no longer serviceable as a substitute for original or its derivatives. Orange Prince doesn’t satisfy this standard b/c it’s still a picture of Prince with a lot of artistic meaning added (the artistic contribution has not been removed or effaced) but Leslie Nielsen in the position of Demi Moore does b/c the picture is no longer a picture of Demi Moore. Blanch v. Koons = collage creates a new gestalt; but String of Puppies is just added color.

Warhol is a Folsom case: it’s the same artistic depiction, altering but not transforming its visual impact.

In the Sony paradigm, you don’t have to be transformative. Conflicts b/t instrumental means of using the same work to exploit value. Is the value being exploited properly w/in owner’s use and enjoyment? Would a prohibition merely destroy value w/o helping © owner exploit its own value? GvO is this kind of nuisance dispute—it’s clear that the value they’re exploiting isn’t the value of the expression of the code but the fact that people are locked in to knowing this code. Using factor two allows us to do this.

Warhol: external, instrumental inquiry into use can focus on the specific use being made; you can say that the art world uses are outside the scope of what Goldsmith has the right to expect. What sorts of demand is the author seeking to fulfill? Is the accused use fulfilling that sort of demand?

Search engine cases: the initial copying is not transformative but it’s nonexpressive, which isn’t dispositive but it creates value that doesn’t satisfy demand for original. And the output is a Folsom situation: the output doesn’t use 100% of the original/vastly reduced size or snippets.

[hard to make this labeling move post Warhol, which leans into transformative purpose like the Court’s own use of images and also insists that the inquiry is into use and not work: for the latter, if seeking consistency w/Warhol. perhaps you should also reframe the first part of the inquiry to analyze the use and not the work?

Larger issue: You’ve just made the first inquiry depend on one’s conception of the derivative work right, and if you do the second inquiry in Warhol you also need a concept of the scope of the derivative works right. Relatedly: Annie Liebovitz doesn’t own what Demi Moore looks like and does own the specific expression that Naked Gun 33 1/3 copied, so taking away Moore’s face shouldn’t affect whether the expression was copied.]

Betsy Rosenblatt, Considering the Role of Fairness in Copyright Fair Use

Could we make fair use more fair by considering equity and distributive justice and favor the historically disadvantaged/less privileged in fair use inquiries? Just v. unjust enrichment. Fair use allows less privileged groups to develop skills, support educational equity. The other side: privileged players are more likely to prevail in fair use litigation and courts are more likely to recognize transformative merit of famous or popular user. Litigation is not wealth-neutral. Could allow/permit exploitation. A teenager who sells a fanwork based on a tentpole movie feels different than a movie studio that creates a tentpole movie from her short story. In the latter case, they weren’t deprived of expected income, but it feels like unjust enrichment in the moral sense. © can be conceived of as helping the less privileged. Dilettantes can afford to create w/o ©, but © allows professionalization.

It would be doctrinally permissible to distinguish between relative status and cultural market share, but extremely hard to implement. Economic and sociocultural disadvantage, historical oppression put into the same bucket—they’re very different in every other way but they’re barriers unrelated to inherent ability to create works of authorship.

Complications: we’d have to think about when in someone’s career we’re looking at. Time of alleged (initial) infringement v. time of suit. Look through use and user to the beneficiary. HathiTrust was done by big companies, but on behalf of less privileged users. We also have to look through © owners to look at ultimate beneficiaries of ownership. This might be too hard to implement. But we could include in jury instructions that we could consider these things. Might prevent unnecessary litigation. Might give marginalized creators more ownership (v where they don’t own any rights in an infringing derivative work).

Ruth Okediji: what does the Court’s equal protection jurisprudence have to say about this?

Jacob Victor: kind of a market failure argument! If we are inquiring into ability to pay etc.

Kristelia Garcia: how do you deal with generative AI? Fan fiction in the style of Betsy Rosenblatt: is that a small creator in need of a leg up or a help for another small creator?

A: may depend on who ultimately benefits from the existence of LLMs, which we don’t know the answer to yet. Fans have very mixed opinions about having their works used, especially for attribution and the fact that the works were created in a gift economy; a machine provides neither attribution nor participation in the gift economy.

Lucy Xiaolu Wang (w/ Nathan W. Chan), Is Grass Greener in the Gray Zone? Legalization and Innovation in the Cannabis Market

Most widely used globally, 18% of US population used in 2019, legal market globally estimated at $100 billion by 2026. Medical/adult use legal in 50+ countries; still most widely trafficked and abused illicit drug. US: federally illegal but patented by fed. But we have little evidence for medical treatment.

Documenting trends of R&D in cannabis market, estimate causal effects of legalization, and examine heterogeneity of policy responses/mechanisms.

856 US registered cannabis trials, 559 in US. About 80% are in a single states. Funding: 6% industry, 47% NIH. Looked at treatment of conditions; usage/effects on body and function of cannabis receptors; abuse factors, including risk factors for abuse.

Medical legalization doesn’t appear to have any impact, while US trials increase mildly after adult/recreational use legalization—consistent w/anecdotes on creative use of dispensaries/wider access to more cannabis users for trial recruitment. Not enough medical R&D. More patenting post recreational legalization, but mainly downstream-oriented.