IPSC session 2 copyright/trademark

Copyrightable Subject Matter

Kevin Collins, Copyright in Suburbia (Collins is a registered architect as well as a law prof)

The stakes: whether © is “working” in suburbia matters in ways that might not be self-evident.

Snack box approach: scattered observations about costs and benefits; a bit of a wash.

Design of built environment is a tale of two industries. Custom design: almost all nonresidential buildings; some upper end residential buildings; employs most architects. Site conditions, budget, programmatic needs are subject of custom design; a few top-end family homes. Stock design: mostly residential, and single-family homes in particular. Customers take design as off-the-shelf, commodity product; architects are scarce. Architects may be dismissive of these as architectural design at all.

Custom design: © is largely irrelevant. Custom design is where you’d expect innovation and creativity to be living. But that turns out not to really be true b/c it’s hard to attribute to © any role at all in the custom architectural world. Architects don’t use their IP to tamp down on copying by competitors—as determined by datasets of complaints and trade press. What architects do is they sue their clients who have them do preliminary designs and don’t pay, and they sue departing employees. Why? There isn’t close copying for reasons independent of ©; norm of creativity on supply side among professionals; demand side—client demands for program, site, budget mean close copies have little value to clients. They don’t want something tailored to needs, tastes, and budgets of someone else. [Seems like Amy Adler’s work on “art world” where © is also not relevant.] Implication: weak incentive to create justification for ©.

Stock design: Similar houses do exist; © owners, usually not architects, do use their copyrights against competitors. Copyright has the most impact on the least creative sector.

Observations: Little evidence of copyright induced creativity from AWCPA. Originality is minor and incremental at best in the suburbs. Little evidence of change since 1990. Incremental creativity of the type one might expect even in a competitive industry w/o ©? Functionality of layouts helps to explain similarity of floor plans, but not similarities of elevations, massing, or style.  

High marginal cost of production may also make © less relevant. Suburban architecture doesn’t respond to © incentives; efficiencies of scale and production, especially w/in large builders. Demand side: conservatism due to focus on investment and resale market. Want houses “broadly attractive to all comers.” [NFTs as contrast? Resale value was a big concern, maybe creativity not so much.] House as symbol of domesticity and arrival in middle class: people buy “sanitized versions” of the “riskless familiar” that seem predictable and safe. Consumers may simply not care about design. Size and location are all important; money spent on design is wasted.

Troll problem: Highlighted in 7^th Circuit Design Basics cases. That was a problem at one point but doesn’t seem to be so today—a significant cost, but now mostly in past. Design Basics: stock plan licensor filed over 120 infringement lawsuits against developers/builders; evidence suggested that © enforcement was more profitable for them than licensing and building plans. Trilogy of cases: each one got more severe on Design Basics than the last—2017: no access, no substantial similarity/© is very narrow; 2021 redlined version in D’s files and still no substantial similarity; 2023 fee award. Of complaints alleging infringement of stock single-family home designs, a downward trend to about 10/year. But housing completion has still been on the rise. Perhaps potential Ds are behaving differently, but Ps may also be. Most of the repeat players aren’t active any more; most of the remaining involve homebuyer intermediaries and single infringing houses. Some lapsed-licensee cases.

Homebuilding industry structure: Not a very concentrated industry; mom & pop builders are important players. Merchant builders are large scale, vertically integrated from land acquisition to sale of house; proprietary portfolio of designs. Mom & pop: build single houses, do license plans; there’s a role for © there for well-documented plans at the upper end of the market for stock houses and lower end of market for custom houses.

Yvette Liebesman: Renovation industry/additions? Landscape architects?

A: has restricted to types of design protected by AWCPA, and landscape is outside that, so he hasn’t looked/little © protection for things that aren’t buildings. He does count renovations within the custom design world b/c people who want renovations have particular needs, so the same rules apply—© doesn’t play a real role.

Charles Duan, What is Copyrightable in Software?

Trilemma: (1) methods of operation aren’t eligible for ©; (2) Congress requires software to be copyright-eligible; (3) software is purely a method of operating a computer. Courts have tried to bend one or more of (1) and (2) to make this work. His claim: (3) is the error. There are expressive, nonfunctional elements of software code, which is what © should protect.

Functionality: an element is functional if changing it would result in performing different instructions, or in a different order; storing substantively different information in memory; generating different outputs given the same inputs. That’s a high bar for functionality. If there are parts of code like that, then the Fed Cir is wrong (that you have to protect functionality if software is to be protected).

Spacing code affects how humans look at it, not actual program operation; that could be expressive. Equivalent grammatical forms = work same in computer, read very differently to humans. Seems expressive.

Bound variables: names of variables in functions—doesn’t care whether a function is called r or radius. That name can’t be used anywhere else or accessed by any other part of the program so its purpose there is solely to define the function for the reader. Order of declarations is also optional.

You can structure code in ways that are more or less readable; straight through or start with summary; ways that convey brilliance or not. These make programs expressive and don’t have any affect on functionality.

Applications: Literal copying of source code is still infringing. Nonliteral copying in GvO, though, is unlikely to infringe unless there are particular elements—the elements to which O pointed were all still functional; if you changed them you would have gotten different outputs. But ordering of declarations could have made a difference—but it’s not clear those were copied and they probably weren’t.

Generative AI code infringement case: Litigation said “other than spacing, these are identical and that’s evidence of infringement.” But spacing is what’s expressive! The compact but disorganized example is the human-written one; means that Copilot recognized the parts that were nonfunctional/expressive and integrated them into the software—it seemed to distinguish b/t functional and nonfunctional material, an interesting and surprising result.

Christian Helmers (co-authors Carsten Fink, Julian Kolev, Andrew Toole), On your marks! Trademark races and their impact on product introductions

Some TMs are more competitively effective than others. Supply of competitively effective TMs is limited: increasing TM depletion. What is the impact on businesses and consumers?

Aim: identify TM races where demand exceeds supply; estimate causal impact on product market outcomes; simple counterfactuals allow trading of priority. Ask about negative effects of not getting first-choice TM, potential gains from trading TMs; whether trading should be allowed.

Data: look at suspended applications, which can occur with a potentially confusing TM application w/an effective filing date that predates the application. Suspension removed when first filed application is abandoned or registered. Dataset was ITUs only. Being able to introduce first choice mark makes launching product much more likely.

Priority would be predicted to be transferred in 53% of races; transfers would boost estimated registration rate from 37% to 41%. Losing a suspension race leads to 1.5 years longer examination pendency; 50% lower registration rates; 20-40% slower product introductions; 30% drop in continued use rate for second-choice marks.

Lunney: you could already pay a first to file person to drop their ITU; once you’re in a race, if you’ve filed the second ITU and they drop the first, you get priority over the rest of the world. So why aren’t these deals already happening?

A: frictions may exist.

Dustin Marlan, Disclosing the Trademark Bargain

Registration offers information: domicile/citizenship; date of first use; first use in commerce; goods; and drawing. The TM regime hasn’t been powered by the Progress clause, but there’s still a commerce related bargain: protect public and protect TM owner. Disclosure: gives registration-based incentives to disclose; the price is the disclosure allowing the public greater transparency and perhaps surveillance for the mark owner. Reveals branding strategies (but can be fought with “submarining” filings and shell companies to avoid early disclosure).

Lunney: other issues—you may expose yourself to scams—what are you looking to do?

A: benefit the public more than TM owners. TM owners don’t get a lot from their disclosures, but that’s not a problem for him. Looking for disclosure that will benefit the public.

Justin Hughes: Benefits exist for capital markets by reifying the right; enable examination of product/service categories and comparison/transaction.

Jason Rantanen: Some of the costs seem more like consequences of registration rather than consequences of disclosure—the risk of getting a rejection isn’t a result of disclosing, it’s the result of trying to get a registered mark. Maybe this is just a quid pro quo, and disclosure is only part of it; the costs of entering the system (e.g. preparing the application) are also there.

Q: if we take disclosure seriously, would that affect how we think about unregistered marks?

A: Sort of like trade secrecy v. patent—you could use your common law TM rights but forfeit the benefits of registration.

Sari Mazzurco, Trademark Law’s Public

Challenge received wisdom that TM is for consumers and producers. Sometimes that’s all there is, but sometimes TM looks to the interest of the public at large—doctrines historical and contemporary bears out that public interest. Historically, statutory bars for scandalous, immoral and disparaging marks didn’t serve producers or consumers. They show that from the start TM aimed to serve other interests—public morals, standards of respect. Dilution by tarnishment is similar.

Equitable defenses also go beyond producers and consumers to consider the public interest more broadly. Genericness and descriptiveness also probe into communities of meaning and not just individual consumer’s ability to determine whether a term communicates the product or the producer. TM protects an evolving and debatable image of the public.

What’s the public? Isn’t it just an aggregation of producers and consumers? No, it’s from communitarian democratic theory, concerned with the common good and not just self-interest. Subject to normative standards of behavior. When TM serves interests other than consumer and producer self-interest, the results are more aligned with communitarian theory.

Consider suits over unions’ use of employer TMs; NFTs; people’s rights to use names after they’ve sold the eponymous brands they started.

Unions: Starbucks; Medieval Times; Trader Joe’s lawsuits from employer against employee union. That could in theory be about protecting goodwill, but it’s also about labor organizing and solidarity. If TM also sometimes serves the public, it’s not off-limits to interpret/apply the law in a way that serves labor interests. Whether they should is open to debate, but they should at least be able to evaluate the question on the merits. Could be different outcomes [note that the two decided cases involve union victories].

Glynn Lunney: Transition from public writ large to specific case of unions and others may be difficult. We have specific hooks for the registration exclusions; post-sale confusion has at least a hook in the statute. What is the statutory hook here? [Preclusion? Dastar-like analysis for labor law?]

A: not categorically different from how the 1A has been incorporated into TM law. Could do something like Rogers. [Although with labor, the relevant labor statute precludes injunctive relief, which might be read as doing the harmonizing.]

Hughes: What we want TM to do (protect public morality) is not the same thing as what we want it not to do (interfere with labor law).

A: we can make them part of TM doctrine—internalize things like 1A limits. [Again, maybe Dastar would be a useful comparator—is that an internal doctrine or an external one?]

Marlan: Maybe consumer is just incomplete metaphor for public—everyone is a consumer [at least of ideas, and courts protect political parties and religions through an analogy to market-based consumption].

A: we should call it what it is then: a public.