Monday, February 26, 2024

Falsely advertising "ghost guns" as legal in NY is actionable

State of N.Y. v. Arm or Ally, LLC, 2024 WL 756474, No. 22-CV-6124 (JMF) (S.D.N.Y. Feb. 23, 2024)

The AG sued sellers of “unfinished frames and receivers” — also known as “80% lowers” or “receiver blanks” —designed to evade restrictions on gun sales. The court explains the allegations:

A “frame” is the core part of a handgun or pistol, and a “receiver” is the core part of a rifle, shotgun, or other long gun. An “unfinished” frame or receiver requires an extra step to be rendered usable: usually the drilling of a few required holes or the filing of excess plastic.

This step is, according to one of the defendants, “ridiculously easy” and can be done by an amateur in under an hour with only basic tools. Some of the defendants make it even easier by shipping their products in a “jig,” a plastic setting that enables a customer to easily convert an unfinished frame or receiver into a firearm. As one defendant said to customers when linking to an instructional video: “There’s no complicated setup because the jig that came with your slide keeps everything properly aligned as you make simple cuts with the included drill bits. Wait, it can’t be that simple? Yes, it is.”

The completed products are allegedly functionally and visually indistinguishable from frames or receivers one could buy at a gun store, but they are effectively untraceable because manufacturers, distributers, and purchasers generally do not comply with the registration and serialization requirements applicable to “firearms,” making them “ghost guns.” Lawmakers in New York City and New York State banned the sale of unfinished frames and receivers in 2020 and 2022, respectively.

During the relevant time period, defendants allegedly marketed and sold unfinished frames and receivers “directly to consumers without following any of the federal or state laws and regulations that apply to the sale of guns, and in particular without conducting a background check, placing a serial number on the gun, or entering it into a federal database so that it can be traced back to its source if used in a crime.” Defendants made at least 100,000 shipments to consumers in New York not registered as federal firearms licensees (FFL), including undercover agents employed by the State. Defendants who had federal firearms licenses had access to, but did not use, the National Instant Criminal Background Check System before selling unfinished frames and receivers to New York consumers, while some defendants weren’t licensed to sell firearms at all.

The advertising bit: Defendants allegedly misled New York customers into “believing that unfinished frames and receivers are legal workarounds to New York’s gun control laws, as well as federal law.” Defendants’ websites claimed, among other things, that unfinished frames and receivers could be sold and purchased with “No FFL Required,” could “be shipped straight to a customer’s home without an FFL,” were “not subject to the same regulations as any other complete firearm[s],” were “completely unregistered and legal,” allowed consumers to “build a completely legal handgun without any ‘government oversight’ ” and to “legally own a firearm that does not have to be ‘registered,’ ” were “[a]pproved” by the ATF, and were considered by the government to be mere “pieces of metal and/or plastic and not guns.”

Among other claims, the AG brought NYGBL Sections 349 and 350 claims against them. Defendants contended that marketing unfinished frames and receivers as “legal” was protected by the First Amendment. It was not.

First, the marketing was commercial speech: “NO FFL Required!” came in the midst of other advertising language, such as “Various colors available,” and “no RED TAPE ... NO Registering ... No Transfer fees ... Ships right to your door.” Labeling unfinished frames and receivers as “ATF Approved” on sales websites or touting “Ban Reversed on All of Our Products!” next to pictures of unfinished frames and receivers constituted proposing a commercial transaction.

I assume because Sections 349 and 350 don’t themselves make the sales illegal, the court didn’t point to the part of Central Hudson that makes clear that ads for unlawful products can simply be banned. But that part also says that false or misleading ads can simply be banned.

And that was sufficiently alleged: Defendants allegedly continued to market unfinished frames and receivers as “legal” to New York consumers even after the State and New York City banned the sale or possession of ghost guns. The complaint plausibly alleged that at least some defendants knowingly evaded federal and state laws. On Halloween Day in 2022, one defendant posted a facetious photo of one of its products dressed as a “ghost gun,” showing that it understood that “its unfinished frame and receiver products have only one use — to make untraceable ghost guns.” Various other defendants allegedly touted the “untraceable” and “unregistered” nature of ghost guns as a major selling point.

a ghost gun--get it?

The defendants mostly argued that their statements were merely “expressions of legal opinion.” The question is whether the customer “understood [the statement] merely as an expression of opinion.” Nat’l Conversion Corp. v. Cedar Bldg. Corp., 23 N.Y.2d 621, 628 (1969) (finding it important that the “tenant’s lawyer was persuaded not to verify” the truth of the landlords’ statements about the law on account of the landlords’ authority and the certainty with which they spoke); see also Lukowsky v. Shalit, 110 A.D.2d 563, 567-68 (1st Dep’t 1985) (“[A] misrepresentation of law is actionable if the representation is made by an individual possessing superior knowledge.”). Defendants marketed their unfinished frames and receivers as “completely” legal “from a position of superior knowledge as established merchants in the gun industry.”


US News rating was mere opinion except as to school that intentionally submitted bad information to it

Favell v. Univ. of Southern Cal., 2024 WL 751006, No. CV 23-3389-GW-MARx (C.D. Cal. Jan. 23, 2024)

Plaintiffs alleged that defendants conspired to inflate the US News ranking of USC Rossier School of Education by submitting inaccurate or incomplete data to US News and market the resulting ranking to the public. USC had a business relationship with 2U, an education technology startup, to develop an online Master of Arts in Teaching program. This was the first of USC Rossier’s online degree programs and went live in June 2009; 2U received an undisclosed percentage of the tuition revenue.

US News calculates its education school rankings using eleven criteria, including “student selectivity,” which accounts for 18% of the school’s total score and is comprised of three objective sources of admittance data: (1) the school’s doctoral acceptance rate (6%); (2) mean GRE quantitative scores (6%); and (3) mean GRE verbal scores (6%).

During the relevant period—through 2021—US News didn’t distinguish between in-person and online programs. However, USC submitted student selectivity data only for USC Rossier’s highly selective, in-person Ph.D. program, but not from its less-competitive EdD program (which was offered online after 2015). From the 2009 rankings to the 2010 rankings, USC Rossier’s reported acceptance rate dropped 40 percentage points (from 50.7% to 10.5%), and its ranking rose 16 places (from #38 to #22). US News began publishing a specialty ranking of online master’s degrees in education in 2013, when USC Rosier’s online Master of Arts in Teaching program ranked #44. USC didn’t appear on the list after that.

Defendants allegedly heavily marketed USC Rossier’s rapidly rising ranking to the public to boost enrollment in the online programs. USC allegedly orchestrated this scheme through its submission of false/incomplete data, and then advertised the resulting rankings knowing that they were misleading. 2U allegedly helped “push the rankings out on a much broader scale,” and knew or should have known that the rankings were fraudulently procured. For example, 2U engaged in online advertising to promote USC Rossier’s ranking; it spent more than half of its revenue on program sales and marketing. USC likewise regularly touted USC Rossier’s ranking (and that USC Rossier was “top-ranked”) in press releases, on social media, on the Rossier Website, and in other promotional materials.

Fortunately for 2U, the court thought it was accused only of puffing. The court considered two kinds of statements: (1) statements that USC Rossier was “top-ranked,” and (2) statements which included the specific numerical ranking assigned by US News.

The first category was “textbook puffery.” A claim that a school is “top-ranked” is both “vague [and] highly subjective” and lacks “the kind of detailed or specific factual assertions that are necessary to” test the truth of the claim.

Some ads included a specific numerical US News ranking. For example, USC published a “News Alert” on the Rossier Website celebrating the fact that it “ha[d] just been ranked 22nd in U.S. News and World Report’s 2010 edition of America’s Best Graduate Schools.” On an earlier motion to dismiss, the court had found that this was potentially actionable because the allegations

do not target US News’ selection or weighing of the objective criteria which determine the rankings.... Instead, Plaintiffs claim that Defendants knowingly reported false data to US News. Those underlying data are entirely falsifiable, and the weight that they were to be assigned by US News was predetermined. The fact that such data were considered alongside other subjective considerations to produce a final ranking does not render USC’s promotion of the allegedly fraudulently obtained ranking non-actionable. As Plaintiffs note, if the law were otherwise, “any business that submits false information to get a certification ... could not be held liable because each of those certifications would have at their core a methodology based on an opinion as to which data points should be considered.”

2U argued that, since it didn’t knowingly provide false data, this reasoning didn’t apply to it. Plaintiffs responded that they still weren’t targeting US News’ choices about how to rank, only the underlying false data, and that false advertising is strict liability. The court, I think wrongly, agreed with 2U: to proceed, plaintiffs needed to allege that 2U knew of that falsity or lacked a good faith belief in the accuracy of the rankings. And since rankings and ratings are “almost universally” treated as statements of opinion, “even if [one] could draw any fact-based inferences from [the] rating, such inferences could not be proven false because of the inherently subjective nature of [the] ratings calculation” as long as the party expressing the opinion honestly entertained it and didn’t have superior knowledge or special information.

Although US News is the one with the opinion here, a reasonable consumer could construe defendants’ affirmation of that opinion as implying that the defendants “held some good faith belief in its accuracy (i.e., that it was not fraudulently obtained).” Plaintiffs plausibly pled lack of good faith as to USC, but not as to 2U; alleged negligence was insufficient.

Although there’s no mens rea requirement in California’s consumer protection statutes, that goes to a separate issue:

Although Plaintiffs are correct that the negligent dissemination of a false statement of fact would suffice, Plaintiffs do not allege that 2U’s advertisements were literally false, nor could they. The question here, therefore, is whether 2U’s advertisements are even actionable in the first instance – i.e., are they misleading because they imply any false assertions upon which a reasonable consumer could rely? In most instances involving statements of opinion, the answer to that question will be “no.” In some cases, however, a statement of opinion may “reasonably ‘be interpreted ... as an implied statement’ that the speaker ‘knows facts sufficient to justify him in forming’ the opinion, or that he at least knows no facts ‘incompatible with [the] opinion.’ ” If and only if that implied statement is false – and the speaker does know of undisclosed fact incompatible with the opinion – is the opinion is misleading. In other words, requiring that Plaintiffs allege knowledge of the falsity underlying US News’ opinions in not contradicted by the absence of a mens rea requirement under the statutes ….

Nor did plaintiffs successfully plead joint/secondary liability. Liability under the UCL and CLRA “cannot be predicated on vicarious liability.” It “must be based on [defendant’s] personal ‘participation in the unlawful practices’ and ‘unbridled control’ over the practices that are found to violate [the UCL] or [FAL].” In making this determination, courts have focused on various factors such as whether the defendant: (1) “issued [its] own advertisements” or merely repeated the deceptive statements of another, (2) “controlled the language” or “reviewed or monitored the representations” made by another, or (3) had notice of the violating conduct.

The service agreement between the parties wasn’t enough to make 2U liable. Under the agreement, “USC was required to (1) market the online programs ‘in a manner comparable to’ the in-person programs; (2) ‘consult with [2U] in the development of additional Promotional Strategies’; and (3) provide 2U ‘with access to information pertaining to both classroom-based and online students’ admissions, performance, and post-graduation outcomes.’ ” Although plaintiffs alleged that 2U bought ads, they didn’t allege that 2U actually issued or authored any of the advertisements upon which they relied. The mere fact that under the agreement, USC was required to market the online programs “in a manner comparable to” the in-person programs and “consult with [2U] in the development of additional Promotional Strategies” didn’t show that 2U controlled the statements at issue here. “USC maintained the main Rossier website” where the allegedly misleading statements were posted, and any marketing materials 2U made were “subject to USC’s written approval prior to any use.”

Saturday, February 24, 2024

TMSR Session 3: Private Actors…and their Machines

Introduction: Jeanne Fromer

Private actors pursue their own interests. Focused on Amazon: free riding on gov’t mechanisms, particularly TM law, to communicate to gov’t not to regulate it—product liability, intermediary liability. It’s also cheaper, and Amazon is notoriously cheap. Affecting TM law (as set forth in new paper with Mark McKenna, which is excellent). Can enshrine things like notice & takedown in © law, but that has effects on the ability to assert fair use. When things are happening en masse at a business, just as in the TM system, w/o individualized attention and with a different agenda than the law’s, you can see the law’s protective features be minimized. So big theme: dealing with masses of marks—eBay, domain names are another example—requires new thinking. You have to be wary of private actors’ incentives.

TMs are a proxy for all sorts of info and goodwill, but there are other things that are proxies for that and have always been—selling in a certain marketplace or mall gives information; being the first listing in the Yellow Pages (might be the first nonsense marks!). But we’re seeing more and different proxies for information and goodwill; started w/search engines but seems more prominent now. Amazon is used for more product search than Google. Product reviews: different info is available. AI modeling is also imagining what consumers want to see. We consider that TMs have costs as well as benefits; we should think about the costs as well as benefits of these proxies. TMs may not matter as much with these other proxies, but they’re also noisy proxies. (This reminds me of a classic Posner assertion where he claimed that Trisha Waldron’s photograph, or the location of her stores, would give people information about whether she was Native American.)  People will game them in all sorts of ways that dilute their information, whether that’s product review manipulation or otherwise.

People trust Amazon, not the individual “marks” on the site, including their ability to return products easily; TM’s work is done in the service of Amazon. A variant of separating the mark from the brand; not seeing it in all categories, and we may have a world in which some marks—maybe the 1%--are not divided from brands but the others are. Not that surprising that the luxury marks are not selling on these platforms and are often fighting them; luxury may require keeping the mark with the brand.

Human desire for TMs? We like how they sort us/how we get to identify with them? Even if we live in a world with other sources of info, maybe we still like TMs. How much of that is cultural?

Eric Goldman

SAD scheme and what it tells us: Efficacy/brittleness of our institutions—the real action is below the waterline, with implications for everything else we’re doing. Sealed complaint; ex parte TRO; used to freeze entire accounts and money. TRO is better than a notice & takedown—you get the seller’s entire account down and you get all their money; marketplaces are treating them as risk of being held liable for infringement by that merchant. Gives rights claimants things they couldn’t get from notice & takedown; will only increase until we fix it.

Standard notice doesn’t produce $, but if you can freeze $, they’ll pay you to get it back. Entire law firms tell rightsowners: let me have the right to enforce and I’ll cut you a check every month. Luke Combs outsourced his enforcement; he didn’t say that he was going to stop using the scheme, even though he tried to make the one person who got attention whole.

TRO freeze is usually left in place even after the TRO expires. We can start w/good faith presumption that the court thinks it’s doing something temporary, but it’s not given the nature of the TRO and the marketplace. Mistakes are common in the process and appeals are almost nonexistent. Thus there is little scrutiny and little pushback.

Main players have dubious rights—emojis, smileys—already at the border of what TM should protect. They shouldn’t have the power that marketplaces give them.

Increasingly seeing competitors using SAD scheme to knock them out during peak sales periods. TROs harm consumers.

Lessons for institutional thinking: The law of TM on the streets is very different from what it looks like in appellate cases. Ex parte: the law is whatever the judge will sign. Civil procedure critiques—basic joinder, jurisdiction questions where the rules are clear but are simply not matching what is taking place.

Third-party enumerated rules are also law on the street. Actual adjudication by services is what the law “really” is. Google’s TM policy for keyword ads is law for 99% of all TM disputes out there.

SAD scheme is swallowing up the rest of TM law. About 1000 SAD scheme cases are filed in the past year with 200 defendants each, that’s 200,000 defendants versus about 3000 traditional cases in the past year. It’s 99% of TM law and that will only grow as long as the scheme continues to work.

TM is a terrible subject matter for ex parte proceedings. When the defense doesn’t show up, it’s too error-prone. It’s like with CPB. Riddled with errors. Adjudicators need to hear about risks of overenforcement, overclaiming; defenses—he gets emails from sellers of used or grey market goods snared in a robotic search. The judge isn’t hearing that they’re not counterfeiters.

Other examples: design patent, as Sarah Burstein has written. Putting pictures side by side often isn’t enough. Trade secret: its scope is the whole ball game.

Because of the lower stakes, secretiveness, lack of access to court that Ds have, these cases just don’t get corrected.

Research project: Go and look at ex parte proceedings and whether there were subsequent proceedings and whether the court changed its mind—we could literally identify the error rate.

This needs to be fixed, but next steps are not clear. We haven’t found a good way to intervene in the cases. Even when judges blast specific plaintiffs, they still aren’t taking the corrective action—they aren’t applying their reasoning to other cases or other Ds, they aren’t imposing sufficient penalties to deter.

Mary LaFrance

Focusing on counterfeits doesn’t address other forms of infringement. Birkenstock & Nike left Amazon b/c of counterfeit concerns; that was Amazon’s focus. But private systems have limited ability to process context. High risk of false positives as well as false negatives. Focusing on counterfeiting doesn’t protect consumers from other types of non-genuine goods, which exist on Amazon & eBay—gray goods, expired products, repackaged, mishandled in supply chain. SHOP SAFE wouldn’t change that b/c it is only about counterfeits. We know that automated systems designed to flag infringements get lots of false positives b/c they can’t recognize fair use; may also be false negatives, though that’s not the focus. There probably aren’t other major complications than fair use for © screening, though they can also miss licensed uses; but it’s much harder for TM to determine infringement.

Nongovernmental mechanisms that work well: Dave Fagundes on derby girl names, using norms. But the context is really simple: 1 name, 1 skater.

UDRP: context gets considered.

But you need a full LOC analysis if you really want to ID infringement; instead, automated systems aim for counterfeits. False positives: probably miss descriptive fair use. Platforms may not have incentives to help sellers who are wrongly identified get back online; not willing to face potential contributory liability. Platforms don’t disclose how many invalid notices they get.

Brands can choose to “gate” on Amazon with authorization letters, but how does the consumer know the seller will stick to selling genuine goods? Brick & mortar sellers have more protections in their supply chains as a rule—relations w/distributors over time, though there are exceptions with discount retailers. [I don’t think this is describing the situation of small brick & mortar sellers.] Their potential liability for counterfeits gives them more incentives to be careful, whereas ecommerce platforms don’t face that potential now with third party sellers.

SHOP SAFE would impose contributory liability with [RT: impossible to comply with] safe harbors. Would lead to more false positives. Seller could appeal, but there’s no requirement that be expeditious. And proof that goods aren’t counterfeit could be challenging, b/c there’s no way to have Amazon actually inspect the products; there’s also no requirement that the TM owner cooperate with the process, so even if the seller provides product codes, the TM owner doesn’t have to verify them even if they’re accurate.  SHOP SAFE would also presage a move to require filtering for © to replace the DMCA.

Stacey Dogan: role of human agency in private actions in an increasingly AI-driven world. We think of TMs as informational vessels that allow consumers to make decisions for themselves based on what they’ve learned either personally or through other means about the goods bearing the mark. But as we move increasingly to algorithmically chosen or differentiated tools to be used by third parties to shape our preferences, that notion of TMs as having info value to humans who then exercise their agency and make choices go away. Private actors will act in profit-maximizing ways; TM owners have always done this, and intermediaries have existed, but when they’re doing all this informational intermediation for their own economic incentives, that’s very troubling.

Jeremy Sheff: we have one to one disputes; one to many where a TM owner tries to enforce against a lot of counterfeiters; then many to many disputes like low quality marks flooding the system in ways that raise costs for everyone. Crystals and mud story about this: in many to many, an attractive case for more crystalline, bright line, formalist rules for cancelling registrations. One to one is more attractive for standards. One to many: hard to figure out whether to worry more about over or underenforcement. If we were to try to adapt different rules, we have to ID what category we’re in, and how someone might be allowed to contest their categorization. DMCA has a formalist process: if you flip the switch three times, you end up in federal court. [You’re supposed to do that, but platform policies don’t work that way—they often don’t restore struck material—and neither do infringers, who may just reupload without filing a counternotice.]

Goldman: that assumes that someone can access court enough to push back.

Sheff: yes. If everything’s done by platform w/no recourse, there’s no way to reverse that.

Goldman: the rule of law is in place but is inaccessible.

Sheff: DMCA says counternotify and you’ll end up in federal court at the end of the day; that might be too expensive, but that’s the cost of muddy standards. Nothing like that for TM.

Lemley: Prior rounds of trolling, something that helped: targeting the lawyers for sanctions or even state bar work. Are these the sorts of representations a lawyer can ethically make to a court? State bars don’t have standing requirements and you don’t have to litigate in the case itself. The appetite for doing it might dry up if there are disciplinary consequences for lawyers about joinder, jurisdiction, etc.

RT: On LaFrance’s points about gray, expired goods, etc: I’m pretty sure TM owners are actually happy to argue that all those things qualify as counterfeits. I also don’t think used, grey market, expired/near expired, repackaged goods, mishandled goods are infringing or counterfeit; the problem if any is that they’re falsely advertised.

Fagundes wrote follow-up article suggesting that system was breaking down. Revisiting Roller Derby’s Master Roster, in CREATIVITY WITHOUT LAW (Kate Darling & Adam Perzanowski eds., NYU Press, 2016).

Marketa Trimble: A little worried about following up TRO success rates—in the trade show context, should not compare to online case results. In the trade show context, there’s a lot of information that preexists, so there is some relationship between the two parties. Judges are pretty strict on issuing bonds in those cases. And also there is a robust world of social norms surrounding Ps in these cases—they do have offline reputation to protect; they’re repeat players. Online plaintiffs are less constrained to care about their reputation among sellers.

Even in trade show cases, we were shocked how little the judges knew about the problem of bad TROs. What helped was meeting judges from other countries, so they weren’t just hearing from local lawyers about how the world worked. Protective letters in other countries: ability to alert court in advance about a potential problem with a case. Might seem burdensome but courts love it (they collect fees for it).

Mark McKenna:

Important to recognize that the quality of online shopping has gotten really bad. Enshittification is real. Labeling has gotten much more confusing. Amazon is also decentering brands because you can’t necessarily trust that you’ll get the right thing just by ordering it by name. The motivation to respond to counterfeiting is increasingly understandable even if we have skepticism about methods. What’s the best way to do that? Schedule A was an invisible problem, but why is that happening at the same time as platforms are creating dispute resolution policies? Maybe this is all really about lawyers and not brands. But it’s worth thinking about which levers are being pulled on brand value/what is depressing the informational value of TMs.

Linford: externalization of costs—Amazon just tells you to throw the product away if it’s not what you ordered. Free shipping makes it easy to start & stay with Amazon.

One response is to get off the platform. We’ve externalized to consumers the cost of protecting themselves—reading reviews.

Another cost of AI specifically: energy. Generating one image cost as much as one charge of your phone. Should that weigh into the fair use analysis? [No, for so many reasons, including that the alternative to fair use is licensing.]

Doesn’t handing over right to sue to lawyers create a problem like for Righthaven in ©? Some sort of naked licensing/transfer in gross?

Lisa Ramsey: this might drive us not to grant TMs in inherently valuable terms like LIFEGUARD for clothing.

Could algorithmic practices affect what counts as TM use? Brand name, product source (manufacturer, third party, etc.), description all show up on Amazon. If Amazon adopted a policy of taking down content only when it appeared in brand name or product source and not in description, that could affect how courts think about it too. User names on social media may or may not include trademarks; user bios give more information.

Bill McGeveran: Enshittification is about size, size is about antitrust: you can enshittify when you have market power. Scale has various manifestations.

Burrell: Monopsony is a better description b/c the economic evidence is that lower market concentration is necessary to have a monopsony.

McGeveran: that’s definitely Wal-Mart. Links to larger conversation about antitrust. You can’t tell a full story about causes or potential responses without looping in antitrust concerns.

There are so many different harms, including monopsony, that are getting blurred together. Useful to pull them apart. Having a listing taken down is not the same thing as being kicked off a platform entirely and losing your reputation accrued on the platform [and having your account seized including the money]. Some enshittification is nuisance to consumers, but it’s not the same thing as getting expired medicine that Amazon wouldn’t replace quickly.

Grinvald: Amazon’s disregard of supply chain is part of what’s eroding connection between product and source—signaling to purchaser that it doesn’t matter who the seller is.

Note that shifting to Target by mail won’t help b/c Target/Wal-Mart has also allowed third-party sellers to ship from their site. That’s the Amazon effect!

Discussion of various attempts to game liability for selling defective products—if Amazon is advertising, storing the product in its warehouses and shipping it, why should it matter whether it’s a “third party seller” fulfilled by Amazon?

Mid-Point Discussants: Lisa Ramsey

The problem of anticompetitive takedowns: DMCA, UDRP. Parody accounts: use noncommercial speech s a bright line, whether as defense or otherwise? If we had bright lines in the statute, maybe platforms would be more willing to keep speech up when challenged.

Marketa Trimble

UDRP as potential model for alternative dispute resolution/shaping rules that can be skewed by private ordering. UDRP is fast, cheap, doesn’t require legal representation. But also has flaws that we can learn from. Flattened the TM world. Designed for alphanumerical strings; treats TMs as word marks and ignores other types of TMs. Ignores classes of goods and services, which is incredible. It also ignores national law. Drafted w/the assumption that there is something beyond the written words that can be drawn from to interpret many of its concepts: what is a TM? Is registration required? What is substantial similarity? What is fair use? Many things were left unexplained, and there was no choice of law provision. The idea that you create a new body of law that will on its own create all this case law and interpretation to fill in the blanks is rather na├»ve. Common law takes centuries. So naturally they started w/national law, and given the dominance of US, Australian, UK panelists, we saw a lot of that influence. Might work well for the US, but might have problems scaling internationally. The panels may give victory to one who had a mark anywhere in the world first.

Need appellate process. The alternative is court—so how do you treat the UDRP in courts? It’s possible that courts turn to their own national laws, as we saw in the case and others. Filling in the blanks is a big challenge.

Despite all the changes in the world, there is still a lot of reliance on TMs. [Tide is not a “brand” in the pumped-up way that some now are; its primary function is to guarantee and make you feel good about your detergent, not anything else.]

Note that UK IPO won’t register a mark in all non Latin characters on the theory that no British person would be able to understand/remember it—compare to “nonsense marks.”

Just as we needed AirBNB to understand why a hotel is a good idea, Uber to see what taxis are good for, we may need algorithmic recommendations to see what TMs are good for.

Linford: There’s been a presumption that Amazon isn’t working right now for buying a brand I want to buy b/c search results are not reliable. If I put Tide in I don’t necessarily get Tide out. If I’m uncertain about whether I’ll get Tide and how long the search will continue to do that, that’s a problem. MTM v. Amazon bothers him: would like Amazon to do the one thing of telling him “we don’t have MTM.” Danger is that intervention has problematic downstream effects.

We are talking about these brands as if they once had a guarantee—Philip Morris has bought brands that I may have strong affection for, but I don’t have strong affection for Philip Morris. We no longer have strong rules against selling marks. But does that mean we presume too much consistency from brand sellers? If that was already false, the Amazon problem is less acute/might get us to correct our priors in the proper direction.

Lemley: MTM is a Rorschach test to see if people’s attitudes have shifted to see how we’ve been affected by the techlash. Would it be great if you could automate communicating only and all correct information at scale? Sure. But if you just give liability for not doing so, we are likely to do damage, and end up with sites that warn “we don’t have what you want” followed by a list of things you want. That doesn’t solve the problem of whether Amazon is reliable. But MTM is a case of Amazon being perfectly reliable: here are the watches we have available to you, the closest to what you were looking for. A standard higher than that is trouble.

Enshittification is not “there’s stuff on Amazon whose provenance I don’t know.” It is that Amazon got dominant by giving you the products you wanted; once it achieves that position, it has a strong incentive to sell the space between you and the stuff you want. Accurately identifying third party alternatives is not a problem, but making it hard for me to find what I want through the clutter of advertising is a problem. Amazon makes more profit selling ads than it does selling products, which is not great.

Dinwoodie: Lush won against Amazon in the UK, had to label “we don’t have it.”

Friday, February 23, 2024

TMSR Session 2: Administrative Agencies and Specialized Courts

Introduction: Robert Burrell

IP Australia exerts extraordinary control over legislative agenda; if you can persuade IP Au. that something needs to change, then it can change quite quickly. But the flipside is that it’s seen in light of what the Office needs to worry about. There have been problems with defenses; the Office doesn’t have to worry about infringement, so nothing changes. But to deal with different holidays in different states, emergency legislation was passed within weeks so the Office would know how to count deadlines.

Volume of decisions by hearing officers: registrability decisions have first mover advantage. They ought to be able to exert significant control over case law: courts should be slow to depart from existing practice.

Limited oversight: fed court worried about undermining confidence in specialized tribunals.

Office can also react if not happy w/court decisions. What matters is what the TMEP says the court said, which isn’t always the same as what the court said; sometimes says “the court can’t have meant that.”

IP Australia also regulates patent & TM attorneys through professional standards board domination.

Academic research: you have to demonstrate you’re bringing in grants; a great way to increase the chance of that is an industry partner; the best funded, most active one of those in TM is IP Australia, so that controls the focus of research. Recently appointed first in-house economist; has now metastasized. IP Austl. doesn’t know what to do with all of its money (it’s self-funding), so we have the Wallace & Grommit World IP Exhibition, with Grommit chasing off copycats.

Most important countervailing factor: competence. Leading case on distinctiveness, where Australian High Court lowered the distinctiveness bar—until it reached the high court, it was being litigated by a construction partner. In fairness to the high court, none of the evidence you’d have expected to have in about the importance of “Italian” when you are selling coffee was before the court, so it’s not as surprising they did something done. So in litigation, no one says “the Office has done this 20 times before.”

Mark Lemley

Agencies in TM law: PTO is sort of a black box b/c ignored TM so long on the policy side. It would never occur to anyone to put a TM person at the head of the PTO; it’s a tiny percentage of their policy work. The good news is that there is an opportunity to do policy work not tainted by existing capture. If and when that changes, INTA will show up. A broader/systemic problem is the problem of scope: we see this in patent side when Office tries to intervene. The business of the PTO is granting patents/TM. They have a lot of experience w/distinctiveness and functionality, as well as failure to function. But they have virtually no experience, except in TTAB, with other side of the equation, remedies, 1A limitations, etc. When they bump up against those in cases like Tam they do a lot of running in place w/o useful guidance. Even if you could navigate around capture, the scope one is harder b/c it’s systemic; you can’t give them deep knowledge on the infringement side. One of the risks of looking at only one side is that you can’t actually grant a “narrow” registration.

TTAB is better suited, b/c at least get microcosm of LOC cases b/c of competing TM claimants. Though they aren’t in the same position to do agency rulemaking and also suffer from Fed Circuit gatekeeping, which has its own rule for LOC—twenty other factors that no other circuit pays attention to; the Fed Cir refuses to follow SCOTUS on functionality while other circuits comply. It’s a tough process to get SCOTUS to fix.

And of course, agency deference is going away this year. Benefit of being able to point to those rules seems much less.

Two other decisionmakers in practice making lots more decisions: The UDRP panels in cybersquatting. There were a lot of benefits: quick, cheap, but also out of control. Could learn to facilitate simple cases more cheaply; most people who have legit defenses can’t afford to assert them in court. A system that gave an opportunity to do that outside the normal court system might have some benefits, but UDRP offers cautionary tale about structuring that. Who gets to decide where cases go is important.

Fromer/McKenna paper on Amazon’s TM system: that’s not a positive story; they identify a number of problems. But consider potential positives: Fromer/McKenna show that, b/c you need a registered mark to participate in the system, there are a lot more people registering marks than they used to be, especially small businesses. This has risks/problems of clutter and depletion, but it doesn’t have to be a problem b/c you’ve got to have the same mark—except that we don’t look at images, which is a huge problem—but Amazon only cares about identical marks. Thus, registering nonsense words. They function for the Amazon system but not in the minds of consumers. That can have problems, but a whole bunch of marks that are extraordinarily narrow/cast no shadow and are only going to be applied against identical copying doesn’t necessarily create a terrible system, especially under conditions of congestion. Replacing human mnemonics with a system that uniquely identifies a good & where it’s from & can connect it to rankings might be good! But caveat that it’s not clear that Amazon has that system. We might see a separation of TM function of TMs and the brand loyalty function of handbags. We’ve been struggling w/the growth of the brand in TM context, distorting source identification function; Amazon could help us break that linkage.

Jeremy Sheff

2 years of expungement: what’s been happening? Director’s initiated 33 expungements; 8 proceeded to final disposition of expungement (1 partial, 7 full). 771 petitions for expungements; only 122 have gotten to institution stage which involves an Office Action. 74 have had an outcome: 32 partial cancellation, 42 full cancellation. In 80 cases Office decides not to go forward for insufficient evidence of expungement, though they then proceed with their own action including evidence dug up by Examiner. So PTO may be cleaning up after petitioners.

Filing bases for director-initiated: 15 44(e), 14 1(a), 4 66(a). Non-director: 381 1(a), 233 66(a), 149 44(e).

16b reexamination of use: 1134 director-initiated, 954 third-party initiated. 304 director-initiated proceeded to full cancellation, 4 partial. (Question to explore: is the large number of these connected to post-registration audit?) Non-director initiated, 92 were not instituted, 140 instituted; 19 partial cancellation and 57 full cancellation.

With three million active registrations, we might be trying to empty the ocean with a teaspoon.

Post-registration audit percentages have very different numbers; they choose about 5000 registrations/year and about half end up deleting goods/services. So a random pull has a 50% chance of finding lack of use on something. For 44(e) and 66(a), about 2/3 of those audited delete goods/services, whereas it’s 45% for 1(a). That’s of registrations w/a response. Total cancellations (3883 of 29022 audited) may be for nonresponse.

What to make of this? Shoveling sand against the tide, b/c we have ¾ million-1 million new applications/year. It’s not just the ocean, but the iceberg melting into the ocean, which means that bad actors flooding the system w/new applications to gain advantage in private systems, we’re dealing with that process with a bespoke, artisanal examination process.

If we’re running out of TMs, that’s a fixed stock that could go away. The examiner cohort is a flow resource, not a stock; they can get congested. We could increase the price! Raise registration and renewal fees; make it more difficult to get a registration for Amazon, which might lower the burden on the system.

In response to question: we don’t charge by number of goods listed in a class, only by class, but listing more goods does increase the chance of auditing.

Nobody who’s been audited would have selected goods/services on basis of concern over auditing (in response to Burrell’s question about whether that increases the incentives to use broader generic terms to describe goods/services).

Fighting a forest fire with a water pistol won’t work.

Dinwoodie: could be useful if actually internalized—if it happens to repeat filers. Could also add penalties. [There are costs for deleting goods, but they’re small fees.] Could make a penalty fee.

Burrell: the problem is that it runs against the story “you’ll hurt SMEs!” Self-filer makes mistakes, poor self-filer.

Dinwoodie: could you do it more granularly?

Burrell: not sure that’s possible to avoid the innocent SME.

RT: Carol Rose was right all along. Property registries are themselves a common that can be overused. And her insights in that article might suggest something about what comes next, after the TMA’s tiny tweak that clearly won’t be enough.

Expertise issue—FTC just issued a rule on impersonation; only heard from INTA and the like, and apparently doesn’t know anything about TM doctrines or how far INTA thinks “impersonation” extends. Calling scholars to submit comments as FTC considers supplemental notice of proposed rulemaking: whether to impose “means and instrumentalities” liability on third parties like OpenAI and whether to extend its new rules to pretending to be an individual, whether a real person or a completely made up one—that is, the FTC might make it an unfair trade practice to use an alias.

URS as extension of UDRP: faster, a little cheaper, more out of control.

Fromer: definitely true that TM is swamped by patent at PTO—hard to get attention on TM issues, and internally it’s created a very sleepy culture in the TM office. You might get a dynamo like the people who self-started the audit program, and more of that would be great, but it doesn’t emerge very often. Circular: the reason patent swamps TM is patent brings in more money, so there’s a very rational explanation. But it doesn’t have to be that way. It would be great for the PTO to charge Coca-Cola more than a few hundred dollars to renew. Money brings attention.

FTC is a place that could do more TM and might be interested [they already have opinions on ©] and need education on non-patent IP. TM examiners used to be specialized b/c it didn’t seem fair that some units were clearing applications faster b/c of the different demands of the different areas; that would be hard to undo, but technical devices really are different from beverages. Think about reinstituting specialization.

Amazon [like the Trademark Clearinghouse for new gTLDs] does not distinguish in the kinds of goods for which a mark is registered, so you can use your registration far more expansively than the PTO designed it.

Ramsey: one suggestion is to require a specimen of use for each listed good, not just one good in each class. Also, PTO should bring audit results to Congress’s attention for further action.

Treat classes commonly used for expressive uses differently—clothing, mugs versus technical equipment.

Lemley: suggests maybe the existence of the opposition process changes things. Someone is immediately looking at your work with a critical eye—that never happens with a patent. But doesn’t know what examiners’ involvement with that is.

Dinwoodie: intensive review for productivity on the TM side.

Farley: past practice was collaborative, knowledge sharing. Remote work has changed that.

Silbey: the incentives are bad: they’re supposed to issue TMs.

Lemley: system is set up to push you in a particular direction.

Silbey: what if the expectation was that some number of applicants should not get TMs?

Sheff: there’s other stuff we haven’t talked about that are interventions: Domestic residence requirement has done a lot of work. 150 cases in which Office identified people who filed 100 applications/week and issued order to show cause and ultimately sanctioned by forbidding them from filing more; resulted in 19,000 applications from those applicants. TMA seems to have led to a decrease of 100,000/year.

Burrell: If we were serious about this, we would have to think about automation/scale. Austl. doesn’t even revoke TMs when a company is deregistered—why not do more information sharing? So that if the mark were to be transferred as an asset, some work would have to be done.

Sheff: linking systems costs a lot!

Burrell: That’s what increased fees are for.

Silbey: expertise can be about narrowing a claim rather than not issuing a TM at all.

Dinwoodie: that’s already a distinctive feature of the US system, which does it more than anyone else.

Burrell: US examiners are better than anyone else in the world at narrowing nonsense, even if that’s a low bar.

Silbey: you need expertise to do it really well, though. And it’s harder if you have less time per application.

Study showed that if there’s a 6 month decision rule, decisions issued in the last 5 days of that period are more likely to be overturned on appeal.

McGeveran: narrowing someone, or rejecting them, isn’t as fatal here as it is in other jurisdictions.

Mid-Point Discussants: Jake Linford

If registration doesn’t matter to TM pathologies, then fixing examination won’t matter. There’s some evidence of heterogeneity among examiners. Hydraulic pressure: Tam & Brunetti put pressure on TM office; they don’t want to grant disparaging/scandalous—failure to function steps in. Not clear whether that was top down or bottom up response, but examiners can find ways to deal w/at least some pressure, and TTAB is willing to support this exercise of discretion. Brunetti doesn’t get FUCK registered on f2f grounds. Student note criticizing f2f as standardless/needs concretization—make it more like aesthetic functionality and double down on competition. But do examiners think through what we would call speech-related concerns? You could say f2f has or includes speech concerns. Though you do see PTO explicitly invoking speech concerns in defense of its rule in Elster.

You could increase the cost of renewal over time, as Posner suggested for ©, but we might not want that for policy reasons. You could increase fees, but that might exacerbate the problem of seeing applicants as the customers.

Fraud on the PTO as an option? The Fed Cir cracked down on that; we could go back to that.

INTA was concerned that TTAB wasn’t publishing enough of its opinions; would that give better guidance? Only 6% of TTAB opinions are published; 40% of signed opinions of courts of appeals.  [It would only increase the scatter plot.]

We complain about costs of TM litigation but don’t like the Copyright Small Claims board; INTA represents Ps and Ds but only very sophisticated ones, united in their sophistication; could we think about a small dispute procedure? [Isn’t that one view of registration?]

Stacey Dogan

Where to go? Structural competence versus personnel-based competence. Appellate courts are supposed to have a broader eye to the interests at stake than just the parties; we want them to be equipped to define legal rules that achieve balance in the law. This aspiration for them requires competence, expertise, capacity to engage in a flexible normative project that can respond to new questions and situations. When that competence is absent, either b/c of structural constraints or institutional failure, that’s disorienting, b/c where do you look for correction?

SCOTUS failures don’t seem structural; not unrelated to the larger legal ecosystem. The PTO is inherently limited. The courts will have to play a significant role in defining the shape of TM rights. The nuggets of constraint the Court gives us seem plucked from the ether, without context or explanation.

We’re not going to solve the personnel issues in the near term. Strategies in the short term: we’re left with what we have, and find ways to work w/in doctrine like RT suggested. In months since Jack Daniel’s, the caselaw is not giving lots of hope. The precise uses that the majority takes for granted—titles of expressive works—are being treated as source-indicating by the lower courts. There’s an opportunity to work on lower courts, both trial and appeals, on giving more texture and principle and normative content to the LOC factors. We’ve seen courts do this in some contexts. Use in the internet, we saw courts willing to limit factors in particular cases; could do that with expressive works as well in a way that’s less “doctrinal” or test-based. Allows for some level of instruction and consistency in cases of certain types, like use in expressive ways.

Movement lawyering? In communication with affected constituencies, working at defining more clearly the problems we’re trying to solve. Identify the greatest threats and capture a theme. We have to accept the lack of traction we get describing TM harms and make it more saleable. Look to antimonopoly movement in antitrust space. It’s a long term project. Using rhetoric + empirical evidence about the costs of concentration. Speak to the public. Partner with law & political economy folks; make it into a larger project about the economy. Project: what is public interest TM law?

Leah Grinvald

CBP: engaged in development of and enforcement of TM law w/o any judicial oversight. Others have noted a shift of the costs of private enforcement to public/government. TM holders can record with CBP, and is used when scanning shipments that come in through ports. Invites TM owners to provide training materials for their officers; even have a powerpoint format for them. Invites TM holders to come to offices, bring samples to train the officers (swag).

They ask TM owners to ID counterfeits. Their main focus is on detaining and seizing counterfeit goods; they say they’re protecting the public from counterfeits, whether handbags or otherwise, as a safety issue. They’ll send the TM owner photos unless they pay a bond for samples. Regardless of how TM owner verifies it’s counterfeit, they take the TM owner’s word for it.

Importer has 7 days to respond if they have a valid reason for importing; if not, the products are seized and mostly destroyed, but there are provisions for donations (despite safety concerns) if they need the product—by auction, to nonprofits, or if gov’t needs them. TM has to be removable from product and product must not pose harm, though how they know that is a good question if the reason for seizure is to avoid harm. Anecdata: mostly the products are destroyed. [Some may go home w/the agents.]

They can also seize goods with copying or simulating marks, not just counterfeits. The regs don’t give guidance on what that is; the importer has 30 days under this provision to show either that they have good reason or that they can remove the TM. There’s nothing in the regulation that restricts officers to detain only products within the registered class, despite the fact that marks are supposed to be registered per class. Backdoor dilution claim w/o need to prove fame or any kind of association.

All of these decisions are done at the level of the officer working hand in hand w/the TM owner; officers aren’t trained in law; there isn’t anything like an internal appeals process—importers rarely go to court b/c they are mostly small businesses. No consequences for mistakes to the TM owner or the officer; just release the goods!

Dinwoodie: US complained to WTO about China not destroying goods; shouldn’t we be doing better?

Grinvald: not the first time we’ve been hypocrites; the regulation allowing it is still on the books.

Burrell: this system is being exported through the world because of the USTO, and it’s now in Australia. Timeframes are so tight; even if SME wants to challenge, must find a law firm that is willing to work around the clock, which is massively expensive.

McKenna: they won’t even tell you what they’ve seized. They have an internal appeal process that’s a joke. The TM owner gives them an image; they call the TM owner and ask (w/o a picture) if they should seize the products and the TM owner says yes. You have to sue the gov’t to get them back and there is no remedy against the gov’t. With LKQ, a whole bunch of the seized parts were covered by a design patent license, but they said “too bad, it’s TM.”

Dogan: you can get substantive law right and still get wrong outcomes if you get the incentives wrong, and these stories might be helpful in getting the harms out to the public. Are there stories about seizures of useful spare parts/works that the public would be outraged about? Is there a way to make that come more alive?

Should we have conflicts rules that limit what TM owners can give agents?

Lemley: confront the rhetorical power of the anti free riding impulse.

Why does this system work at all? How do they know what’s mapped to relevant goods/services? Has anyone figured out whether it’s a random walk, mostly circumstances where they were alerted to a problem, what percentage of goods subject to seizure end up being seized, etc.?

Another form of seizure popped up ten years ago: internet domain name seizures. CBP is using the analogy to seizure of goods to seize domain names. They’re quite clearly at the behest of particular TM/© owners.

Grinvald: definitely an audit basis: they randomly open packages and check them against a list. Latest stats are from 2021; Hong Kong and China are top countries inspected. They also absolutely encourage anyone to submit tips.

Silbey: seems like a story similar to Mass. Anticounterfeiting law where industry was policing in front of stadium on behalf of NFL and just arresting T-shirt sellers. It’s an MO, not only at the CPB—officers and industry leaders work together. What are the narratives one might mobilize? Abuse of enforcement systems, collusion. Patent troll narrative was effective.

Lemley: but TM bullying stories don’t seem to move the needle in the same way.

Silbey: Eldred turned out to be a mistake; could not convince the Court there was a problem. Worry about SCOTUS and TM in the same way: the story we have to tell is not one they are willing to hear. Empirics, costs, and efficiency don’t matter.

Lemley: yes, the Justices clearly think people wouldn’t be confused, but VIP must nonetheless lose.

Silbey: might as well have said “traditional contours of TM” in VIP; so what can we learn from the patent trolling story?

RT: Better story: Emojis? Schedule A defendants? [Thinking about Lawrence Block’s Batman’s Helpers. Police corruption]

Just a reminder of my FOIA lawsuit against CBP. Happy to share the underlying responses with anyone doing research in the area.

Linford: bonding mechanisms? Schedule A story that got traction was the country music fan selling Luke Combs stuff. This person’s side hustle was sympathetic. But is an anti-merchandising right view popular in the US? That’s an empirical question. How many errors are enough before people stop saying “errors happen”? The procedural problem is less persuasive the lower you think the error rate is.

Goldman: we don’t know the error rate b/c it’s not researchable, and it’s not researchable b/c they’re not following the procedures.

Burrell: where’s the evidence that we need reliable data to persuade people? We need anecdata that is powerful: the government took my stuff!

Dinwoodie: When the RIAA sued a grandmother and a teenager, they looked really bad.

Linford: but the two cases that made the court of appeals, the RIAA won.

RT: but what does it mean to win? They aren’t doing it any more and they didn’t collect the money.

McGeveran: people see themselves as branders now. They identify with the “brand” idea.

Lemley: here’s what TM owners think you can’t do on Tik Tok: making fun of a brand; wearing branded clothes w/o permission—that might be a way to flip the narrative. As the world separates TM from brand, we should think about what it means to separate those doctrinally—would help us have narrower scope for TM law but also free us to rethink what a “branding right” would look like independent of confusion over sales of products. Not sure it would be based on confusion! A lot of bogus confusion survey stuff would not be important.

Originally dilution was an alternative cause of action in the states; you couldn’t bring both claims.

Burrell: IKEA case in Europe: “IKEA plan” used to describe anti-immigrant plan; court is considering whether there is “due cause.” Most likely will cut & paste from their copyright decision saying that satire & parody are ok and send it back to the Belgian court. In working out whether a parody implicated free speech rights, Belgium is entitled to take into account its equality guarantee, so being political speech wasn’t super protective.

15th Trademark Scholars’ Roundtable: Session 1: Congress and the Courts (including the role of the Supreme Court)

Introduction: Rebecca Tushnet

What might we derive from things the Court has said about trademark of late?

The purpose of trademark is consumer protection; source-identification is the most relevant consideration but not the entirety of TM law.  [see also Booking: once source identification is shown, all other issues are dealt with as limitations on rights/incorporated into the confusion test.]

Maybe to this we can add in Dastar. Source/origin and control over quality is the core of TM and has special relevance when trying to figure out what rights the plaintiff is claiming to own; sponsorship/affiliation is of lesser importance, albeit still relevant; sponsorship/affiliation might be better handled under 43, which could have stronger guardrails; consider Lexmark as a case about 43(a), which the Court says it is, and not about 43(a)(1)(B) only. In that case we have a zone of interests test and a proximate cause test—adding in a harm requirement at least for claims that sound in 43(a). That could also address some of the Article III standing issues I’ve been encouraging people to raise.

Compare what’s said about source/TM use in Abitron; use in commerce as a separate requirement after Abitron: bona fide is going to give us some trouble but not necessarily a lot since it is explicitly contrasted with not reserving rights, so it could also help identify non-source identifying uses.

I was particularly interested in doing a deep dive on the idea that the Court thought that both Dogan & Lemley and Dinwoodie & Janis were right, when most of us understood the two articles to be debating with each other.

Dogan & Lemley: This article, especially the passage cited by the court, seems to envision a “trademark use” requirement less as an affirmative test for infringement, and more to exempt non infringing uses from liability for an absence of use.

Dinwoodie and Janis taken out of context? They argue that trademark uses are more likely to infringe, and non-trademark-uses are less likely to infringe, but that using this dichotomy as an “approximate” in the interest of efficiency is outweighed by complications that render individual cases (specifically in the example of keyword purchases) distinct. But if Rogers survives, that’s what it does. Meanwhile, valuable speech that is source-indicating gets some variant of the regular LOC test.

The ridiculous approach to dilution: because one statutory provision says use as a mark, the neighboring one that doesn’t use that language must also have that concept: As Graeme Dinwoodie said to me, even if you don’t agree that expressio unis should mean that the noncommercial use exception doesn’t have a use as a mark requirement, you should still easily recognize that the 2006 revision of dilution was designed to expand the defenses, not contract them.

What if we could read that part of the opinion in ways that were less awful?

Use expressio unis to get at the fact that the noncommercial use holding is limited to situations where the challenged use is “used as a mark for a commercial product”; the term noncommercial use can reasonably include uses as a mark for political speech—Robert Kennedy, Jr., is using his father’s famous name to promote himself politically (also highlighting the importance of small differences when it comes to speech in the political realm). Things can be source identifiers, without being commercial source identifiers (United We Stand): confusion but not dilution actionable

Jack Daniel’s didn’t purport to decide the full scope of the “noncommercial” exclusion. It held:

On the [Ninth Circuit’s] view, the “use of a mark may be ‘noncommercial’ even if used to sell a product.” However wide the scope of the “noncommercial use” exclusion, it cannot include, as the Ninth Circuit thought, every parody or humorous commentary.” However, the Court concludes: “Today's opinion is narrow. We do not decide … how far the ‘noncommercial use’ exclusion goes. … On dilution, we hold only that the noncommercial exclusion does not shield parody or other commentary when its use of a mark is similarly source-identifying.” (Reference is to the use of Bad Spaniels as a mark for dog toys). Given that the Supreme Court has also cautioned not to read its decisions as if they were statutes, it’s arguable that use for political speech should fall into the noncommercial use exception, which courts have generally read as covering “noncommercial speech” as that’s defined by the First Amendment. 

What about the use other than as a mark limit in the parody/commentary exception itself? Is there any hope there for parodists? Other scenarios: Howard University Alumni Association should be understood as NFU outside the scope of dilution, as long as it’s a truthful representation—it’s not using Howard as a mark but rather the unitary mark Howard University Alumni Association; the exclusion doesn’t, like other parts of the statute, refer to uses “comprising” the famous mark. There is something intuitive about the idea that someone who names their organization “Americans Against Trump” is not “using” the famous trademark “Trump” “as a designation of source” for their own goods or services—they are instead using the phrase as a whole to express opposition to Trump, which is the opposite of using “Trump” as a source identifier.

Mark McKenna: TM is a creature of common-law courts and we don’t live in that world any more. SCt used to do private law dispute resolution: Kellogg, Mishawaka, Singer—it’s treating it as a tort. Scatter plot: common law reasoning doesn’t look to deduce from a statement of a rule down; you build a rule by accretion over time and each case is a data point. The line you draw never captures all the lines; sometimes you see multiple lines emerge and then you can evaluate why. But law doesn’t develop top-down in this model. For the most part, that’s how we built TM and unfair competition.
SCOTUS is now a constitutional court, not one that resolves individual cases, and that’s now apparent in all these cases. Politics of how SCt Justices are chosen now matters too: they aren’t picked for being good at law generally, but for views on hot-button issues. Most have never really been lawyers. They were movement/administration/academics. They’re not doing ordinary judging.

But when we have a statute with the common law model baked in—tells you very little about what it means to violate the rights at issue—the Justices now have a very different idea of what they’re doing, and they think they’re doing textualism even when the statute is misfitted to that, they don’t have the toolkit to do the common law reasoning. Romag is a clear example: there’s a complicated history, and figuring out how to think about it in light of TM’s evolution over time is hard. But the Court says: we found this one case! 1881 DCt of Alabama. The idea that finding one case in common-law reasoning matters is ridiculous. How can you even engage the conversation when it’s a trump card to say “that can’t be the rule b/c I found one case that says something else.” You can also see it in Tam & Brunetti—little interest in how TM works, the relationship b/t registration and enforcement, even though that’s central to the Lanham Act.

Also JDI and Abitron, where the Court grabs a bumper sticker: focuses on one term in the law. Citing both Dogan/Lemley and Dinwoodie/Janis is a good example: those articles don’t say the same thing.

What is to be done? SCt should get out of business of doing IP, but it’s too late. Even from 20 years ago, it’s a big change—Wal-Mart, Traffix, and Dastar were trying to resolve hard questions and details of doctrine that affect how things work on the ground. The 20 thousand foot view of today is a very big difference. They’d look for some little snippet of text in the Lanham Act; Scalia was a textualist but he could read a law in its entirety. The way we’ve trained a generation of judges to think about law is so different and the suppositions about how law gets done baked into the Lanham Act don’t work any more.

Christine Haight Farley. The Interamerican Convention enters the chat! That’s a missing link that helps explain why so much is unstated in the Act. Rogers had been trying to pass a law, and he didn’t think Congress could enact substantive rights; he was given the opportunity to write a self-executing treaty that was written like a statute, for civil law countries. When the Lanham Act passed, he was convinced it incorporated that already in section 44.

The accident that is 43(a) is also part of this story. It was meant to have a bounded agenda; only in legislative history, when witnesses noticed section 44, they suggested that 43(a) was more appropriate for unfair competition. Rogers would have been floored by what came of it.

Congress delegates to INTA, AIPLA, ABA the role of drafting, and that goes all the way back to Rogers. How did TM use get into an exception to an exception? It was supposed to be a limitation on the dilution right, but INTA said it should move and Congress was none the wiser about the effects.

Codifying 43(a)—but without codifying LOC, spectrum of distinctiveness, etc.—b/c the TM bar sensed a risk of loss, of limitation. No one in the TM bar has an interest in cleaning up things like that, but it means nonexperts don’t get much guidance.

Also helps explain 1962 expansion of confusion; 1988 constructive use; dilution; ACPA. From 1988 on, Congress is doing substantive law, and special-interest revisions like the Anti-Monopoly revision.

What about the courts? The Court seems to think TM law is working really well. There might be little problems but overall it’s a well-oiled machine. It doesn’t see what dramatic changes have occurred in TM law (or that they’re a problem). Only when it’s really doing private law can it see a plaintiff’s overreach. Doesn’t have a sense of the policy landscape. Breyer, Ginsburg, Scalia had more of that sense; Justices now focused on different landscapes. Elster might be a way to get some of that landscape back. Gorsuch is interested in history of old Acts and TM Office doing public policy that’s a little broader than source/origin confusion. [Although he seems wrong on the facts about what they were doing.]

The working relationship of Congress/SCOTUS provides an opportunity to hide the ball about change, especially in 43(a): Congress says “all we’re doing is codifying common law” and Court says “all we’re doing is applying what Congress wrote.” But somehow there’s a big change between Sears/Compco and Taco Cabana. Sears/Compco said there was a right to copy things in the public domain; how did that go away?

Dinwoodie: Non TM use is an important variable—something that affects scope of protection not outer boundaries, and that worries him less b/c it’s not a dispositive binary variable. But now you have to analyze it like that (which you see badly in the post-JDI cases); if you fall outside out of the line, the consequence is just in the test/scope of the right. You can see that where we have use as a mark in other tests—KP Permanent—courts have started to use the three elements more as a spectrum—how descriptive is this? We might be getting to the stage in the evolution where TM or non-TM use is a relevant variable, which is consistent w/both articles. Agree that source/affiliation is one way to draw the line, but that is itself not an easy line to draw—standing behind is not an easy line, but as a variable it is less worrisome.

Rescuecom: is it overruled? Only if you believe they’ll stick with their statement about the definition of “use in commerce.” Which he doesn’t; the opinion applies that reasoning to 32 and 43(a) both. Nobody thought that through—it was a bumper sticker, as McKenna says. Rescuecom will survive a bit longer.

[I think you could say that when you claim to have a “mark” subject to 43(a), you use the relevant definition, but when you’re asserting some other claim under 43(a), you don’t have to do so.]

They seem to think the multifactor test is mandated by the statute, but it’s not, so maybe it’s the statute + some principles drawn from private law? Once you go top-down, it’s hard to figure out what other nonstatutory stuff will be in play.

Do we have faith in judicial innovation? RT’s approach is a bit more top-down but we’ve had some success with bottom-up—do you still make the point that the 1962 legislation was trying to do something specific or do you give up? Do you still point out that Congress endorsed Rogers in 2020? Or do you accept the corroded structure and do something else?

Jeremy Sheff: Not just judges trained this way now but how lawyers are trained, the materials they have, and the way they are trained to use those materials technologies. The clerks who wrote Wal-Mart were the first generation to get unfettered access to Westlaw. Before, you pulled a treatise off the shelf who’d been written by someone who read all the cases and condensed them to explain what they mean and which the most important ones were. JDI, which cites articles with “TM Use” in the title, is now the model—that’s how lawyers work now, dealing with huge volumes of materials that they can’t wholly assimilate. The scale is different; the human reviewing cases and synthesizing them is not the model now. We’re encouraged to look for the snippet that matches our claim and no further. This issue is not going to go away.

Similar with registration agencies—a firehose coming at them. Better algorithmic detection/AI won’t necessarily be a better way to deal with that. We should think about how we could train lawyers to be better at this.

Mark Lemley: This isn’t a TM problem. This is a law problem. The Court, across a wide variety of doctrines, isn’t just replacing common law with statutes even when statutes were written with common law in mind. It has embarked on a project of abolishing equity. Not clear why, but definitely doing it, e.g. in Romag. There’s one basic rule of disgorgement: you need to be a bad actor. But the Court doesn’t look at it that way.

Yesterday’s © arguments are the same. Ten years ago they abolished laches, creating a nightmare of 40-year-old claims. Yesterday’s argument was whether the discovery rule applied to the 3-year damages rule; several Justices across the ideological spectrum asked “why should there be a discovery rule in general?” Equity existing alongside the statute is being taken outside the law. Not clear what to do, but you can’t solve it in TM because it’s not a TM problem.

Dinwoodie: maybe it’s worse in TM, b/c you don’t have political commitments at least telling you what will happen.

Lemley: yes, part of the issue is you’ll see a random walk. They weren’t particularly interested in helping TM owners get more $, but they were interested in identifying a couple of words in the statute. Star Athletica is the same way; in the absence of a precommitment around constitutional issues, it’s weird. When the statute was written will make a huge difference too, b/c Congress has responded by writing statutes like the tax code. The earlier statutes will be interpreted in weird ways, see Warhol, b/c they were written against a backdrop that we now pretend no longer exists. Is the solution a European style detailed regime? Don’t love that in TM but that is the obvious response.

Jake Linford: Thinking about Rogers, JDI, and Dastar: is there a throughline about the line b/t © and TM? Maybe JDI is suggesting subtextually that there’s a place for Rogers, and what we mean is works that could qualify for ©. [But the VIP bottle clearly could!] It’s about maintaining lines and Rogers then helps maintain the lines. If that’s right, we use expression as another form of heuristic, like use in commerce/use as a mark. The danger is distortions of the parody/satire line in ©.

Standing makes him nervous b/c of privacy. The SCt uses standing to take power and ability to get relief away from plaintiffs it doesn’t like. TransUnion is a big example; Congress didn’t satisfy Court’s wisdom about who should get relief. Would be surprised, given Tam/Brunetti/JDI/Elster trajectory, if Court said we think TM plaintiffs generally ought to be denied relief based on our gnomic understanding of standing.

What you’re seeing is cross-licensing/branding. A move among many of us as scholars to say there should be space for artistic uses, and if we see a lot of Nike collabs and make statements about who it wants to collaborate w/or not, perhaps that sends signals that matter to consumers, and if we want to reflect how consumers interact w/markets, that might lead to rights expansion. Maybe sponsorship/affiliation reflects what brands are doing and how consumers think.

We’re trying to return to a “pure” state of common law: source confusion, double identity. Not sure that’s a better world, but regardless the mechanisms we’re using aren’t fit for purpose, like the First Amendment or standing b/c we think they’re more essentialized and the Court might listen to us about precommitments like that instead of TM policy. Perhaps you can get that, but do we lose something in masking the policy intuition behind a technical tool to get us there.

On Sheff’s point: if you trust the treatise writers, then great. If you don’t, does the search engine help? Maybe, maybe not.

RT: On ©. The bottle is ©able.

On standing: Agrees about prediction that it won’t be much help, but: What is law for? If it’s not for making reasoned distinctions, then it’s nothing. And there’s some value in explaining the inconsistency and challenging the TM harm stories; some judges even listen.

On sponsorship/affiliation: courts don’t inquire into how it’s done, though. If we listened to what brands actually do and what consumers actually see, they see Nike x Common, the dual branding is all over it. But brands don’t signal a collab by having the red wax seal on one bottle of liquor appear on another bottle with no other sign of collaboration. They put it all over! Courts actually ask whether consumers would, e.g., expect a movie company to do cross-branding with a software security company, but they don’t ask, is this how consumers are accustomed to seeing collaborations identified?

Jeanne Fromer: participated in drafting sessions for TMA with Farley & Beebe—were able to advocate for some changes. Allow PTO to unilaterally cancel marks. Another issue: the SG’s office is critical. They often come up with strategies to win that don’t make sense in the larger context of the body of law at issue.

Dinwoodie: SG takes positions they think the Court will listen to, and that methodology bleeds over into other things/methods.

Fromer: hard to know the chicken from the egg.

McKenna: The SG’s JDI brief made egregious legal errors, hope they’re not going there.

In teaching, try to teach students where the rules came from, and maybe that’s what we need to be doing more of. The rules don’t drop out of the sky but evolve. Another big difference along with legal research is that the TM bar used to be small; now the money is good so lawyers not really trained as TM lawyers are litigating these cases; generalists that pick & choose things—you hear that in the arguments. The SG wouldn’t have put in a brief in older TM cases; the Court asks the SG b/c it’s now thinking of itself as a constitutional court.

Dinwoodie: judge discussed how he would have benefited from learning more about functionality from parties; he looked at the dictionary definition.

Ramsey: standing and 1A seem to have a relationship in examining government’s interest and harm/causation stories. Jennifer Rothman has written a paper about history of protecting names of presidents, etc.; may be source of Gorsuch’s interest. So scholarship about history may be important.

Robert Burrell: Australian trend—lot of $ coming in to TM, and so nonexpert lawyers are coming in and litigating, often to damaging effect. See less in UK w/specialist bar and specialist judges. How do we as a community flag “here there be dragons” or at least “there are other cases that have considered these issues”? We can do it in part by embarrassing judges when they get it really badly wrong, but how we persuade other members of the legal community that they might want to find some things out before giving it a go is a question.

Farley: Court loses forest for trees in these cases, and then sees only a cartoon forest. Could we be painting more accurate pictures of the forest in these cases so they see where a case sits and what the impacts will be? Scholars used to write short “forest” pieces, and one of the ways the world has changed is that law reviews like you to solve a problem/make a recommendation, but there’s room to speak for the trees.

Mid-Point Discussants: Jessica Silbey

Compare what’s going on in patent & © specifically: feels better about TM cases than about patent and © generally speaking, which is worth thinking about. The only © case that went well recently was PRO v. Georgia, but © was bad before—Eldred, Golan, Tasini. We did have some thoughtful TM decisions—Qualitex, Traffix, even Two Pesos, Moseley might have been a mistake but got fixed by Congress. But still evidence of hubris: armchair consumer psychology in Wal-Mart etc. Nostalgia isn’t accurate as to cases like KP Permanent, which were doing policy too. So how does the Court do IP more broadly?

Methodological shift: deciding cases on administrative agencies, jury questions. It will be busy making claims about separation of powers, role of jury in rights/property claims; the idea that won’t have effects on statutory schemes like TM is ludicrous. It will affect the TTAB. The cross-disciplinary effects of its methodological decisionmaking are profound. So what the court says v. what it does: SEC v. Jarkesey—it’s going to say that the ALJ cases that sound like common law should be brought in court before a jury. What is the role of the jury in TM? We can talk about courts’ power, but will it throw everything to the jury? Full of its own self-worth as judges being gatekeepers. Judicial supremacy: this Court is all about its own power, so it will say juries are important, but really it is creating more gateways for it to decide cases. Where is factfinding required? Distinctiveness, abandonment, etc. Where’s the influence that advocates might be able to exert on the divide b/t law and facts?

Appellate courts: there will be tension b/t Fed Cir and regional circuits. As Fed Cir decides IP cases v. 2d/9th, will we see different kinds of SCt decisions w/r/t Fed Cir? Insiders versus outsiders: con law phenomenon is spreading. Opportunity to figure out who those insiders are, including the SG.

Helping TM to be its best self, whatever that might be.  Provocation: TM restatement! Less controversial than ©; who gets to decide gap-filling questions and what justifies them being the decisionmakers? The development of the common law in TM is its own force, and that calls out for the idea of competing treatises, which a Restatement could be.

Bill McGeveran

Who is a good guardian of public interest in things like speech and competition? A common law approach assumes judges will guard the public interest. A delegating structure assumes that admin agencies will do so. More specific statutes now are Congress reacting to those responses and trying to embed a view of the public interest into the statute itself. The Lanham Act is clearly a product of common law, but Congress passed plenty of other statutes in the 50s, 60s, and 70s. Where is the public interest being guarded in those statutes? Antitrust is another capacious common law statute, but there’s been enormous normative struggle—Chicago School monopoly definition of monopolization, and then countermovement. Big, dominant, coherent approaches to the public interest permeate antitrust lawmaking. Also, FTC and DOJ really matter. SEC is similar: the regulator really matters. The text of the statute doesn’t cover all the regulations, where the public interest is guarded. Privacy/consumer protection: FTC has jerry-rigged a guardianship of the public interest; California also passed a specific law with a specific agency (which Eric Goldman loves). There’s an understanding of where the public interest is supposed to reside.

What about IP? The statutes have been amended to make them more and more specific; © and patent have had comprehensive rewrites since they were created in the common-law era. But they all have this issue: where is the public interest in a common-law structure implemented by the statute? It’s supposed to be the courts, b/c the statute doesn’t embody the specifics. But there aren’t a lot of other old-fashioned statutes with gap-filling common law that are operating anymore. The registration process has some of that, but registration isn’t the primary or only mover here. Nobody has their hand on the tiller.

RT: [Point about sending everything to the jury: it’s easy to say that won’t happen, because there aren’t enough courts and juries, but another possibility is that the system really won’t work/we’ll get decisional paralysis: Indian judicial system has seized up—in practice, you just don’t have rights. Will businesses be ok with this? Compare responses to mass arbitration—they do have incentives to change the law when the law stops working for them.]

McKenna: there’s a big difference between wholesale judgments about what’s on the whole more likely than not—Wal-Mart and the other classification cases—we make those wholesale judgments b/c of the countervailing concerns like competition; very different from the Court’s current approach, which is that everything is retail and has to be decided using concepts that won’t be filled in by the Court. Very different concept of institutional actors. Generalization is itself valuable, but that feels like it was abandoned.

Registration’s getting more important, so maybe the PTO will be more of a guardian of the public interest, b/c Amazon has forced that role on them.

Sheff: Not sure the allocation is the core problem; we’re interested in the outcomes/the system and it’s not clear that who has decisionmaking authority is controlling that.

Dinwoodie: dissent in Samara in 2d Circuit: don’t let juries decide how competitive the economy is going to be. Worry about juries—think about who’s in the best position to do the weighing/it’s easier to control the judge’s interpretation of the law.

Surveys: A growing skepticism of surveys? Sotomayor’s concurrence; others may well be on board. In the rest of the world, common law in particular, there has been pretty significant trend against the use of surveys. Maybe that’s one of the issues where the way you develop facts and prove facts may affect outcomes. JDI survey did a lot of damage in that case.

Linford: we don’t have instructions for TM cases in most circuits; that is a leverage point. Court-assigned experts as in Germany?

Silbey: public interest location: in © different industries have forced amendments over time; that’s somewhat policed the different stakeholder interests. What is the equivalent in TM for that kind of industry diversity that could create wedge issues? LKQ/repair parts/must-match for trade dress. Off-ramps are hard to convince Court of when they think that courts are the best places for deciding these questions and they do it well.

Where are the lines the Court is drawing that take it out of fact questions? Commercial/noncommercial? What other things are available doctrinally? 1A is clearly a line; property rights is another line. We’ll see more takings cases. Note that Feist, a huge © case, turned on Stevens being mad at telecom companies. O’Connor wanted to deny cert, then wrote the unanimous majority. Interesting to see the case file in Wal-Mart. Where did Scalia get those ideas about the balance of the system?

Dinwoodie: public interest considerations factoring into the analysis can be a means of constitutional avoidance, but the Court seems unwilling to do that—forces it to the nuclear options.

Farley: In JDI, examples were effective: Blatt said the survey should be relied on because we don’t want judges deciding these questions because judges don’t understand anything about whether panties are related to teen girl magazines.

Do plaintiffs waive jury trials? [PI/SJ is probably most important.]

Lemley: sometimes it’s because all you want is an injunction/a PI resolves the case. If it’s a disputed factual question it’s not appropriate for PI, because who knows what a jury would say? That framing, if you can fit it into PI jurisprudence, which the Court is messing up as it abolishes equity, could serve as a bulwark not in speech cases—where you do want to lower costs—but in other cases where the D might otherwise just be shut down.

Farley: INTA says its objective is to protect the public through the use of TMs/avoiding deception.

Eric Goldman: the platforms could be a countervailing force. But they can’t. They’re sidelined by the techlash. Google fought for keyword advertising but couldn’t win that today.

Burrell: Judges are pretty good about “this shouldn’t get monopoly protection in the first place,” and that might be the 90s cases. But once they’ve decided “Jack Daniel’s is a trademark” they get much worse at the scope of the right. Could be a shift in the types of cases.

Dinwoodie: British judicial enforcement of TMs until 1994 was much more balanced view of range of interests at stake in TM: often former TM barristers that wrote/enforced law. They had represented clients on both sides. More sensitive to balance. We’ve lost that.

Ramsey: worked on INTA’s model TM guidance; really interesting—a lot of them were fine with speech-protective limits for registration and enforcement. Put into the language of functionality “any feature that adds substantial non-source-ID’ing value” but someone on the board of INTA didn’t like it and so it came out. Compromise is possible, but can be derailed by 1-2 people w/a lot of influence. Restatement model might be better to avoid those roadblocks.

Failure to function as a guardrail for the public interest, not just for speech but for cases like Lettuce Turnip the Beet. But we need some clarity about when secondary meaning should be enough to overcome failure to function, as with Nike/Automotive Gold, and when it shouldn’t be, as with DRIVE SAFELY. [Maybe part of the answer is preexisting meaning: there will always inevitably be non-TM meaning for “DRIVE SAFELY” but not for Nike/the BMW icon, and the ratio of TM to non-TM meaning, or the ability of TM meaning to drive non-TM meaning out of the market, might matter.]

Linford: Dastar as response to Court’s recognition of Eldred/Golan being extreme—strongest statement that © can’t be perpetual is found in Dastar, not a © case.

McKenna: it’s true that the SCt cases we describe as more sophisticated are about policing what counts as a mark, but it’s never taken a straightup infringement case as the massive expansion of what counts as infringement occured.

There was a settlement over validity v. infringement doctrines but TM use puts that in a blender. We’ve committed to a system where everything is in the scope of TM rather than using public interest to set boundaries for protection, and that makes it hard to figure out how to use the public interest in the retail inquiry.

Dogan: consider differences between arbiter of public interest and advocate for public interest. INTA represents a consistent value, whereas on the other side there are different interests and different ways in which expansive TM rights threaten values we care about. There are clusters of interest groups for competition, and for speech, in uncoordinated ways. Think about whether there’s any way to coordinate and make more coherent this set of values threatened by expansive TM rights. Courts and Congress respond to what they perceive as broader cultural norms—SOPA/PIPA; to some extent in courts protecting Sony VCR. How to make values salient to broader public? Economic costs, speech costs, etc.

Farley: one challenge is people don’t know when they will become interested. Small businesses face particular challenges. No representatives of small business in dilution hearings.

Leah Chan Grinvald: right to repair as one of these, fighting for 15 years.