Barron symposium, Panel 1

Access and the Regulatory State

C. Thomas Dienes, George Washington University Law School

Barron’s article: Private censorship was skewing the marketplace as much as government censorship could, undermining democracy. Barron argued for a (constitutional/statutory) right of access to raise important issues. The Fairness Doctrine began in the 1920s as a way to respond to “propaganda radio.” In 1949 the FCC formalized it. (1) Broadcast licensees are required to cover important, controversial issues of interest to the community and (2) required to offer contending views on those issues. No one got an individual right to talk – it’s a Meiklejohnian conception of letting all important things be said, not letting everyone say them. Later, the FCC added a right of reply to personal attacks. Red Lion upheld these rules on scarcity rationales, and also because the Court focused not on the First Amendment rights of editors and broadcasters but on the First Amendment rights of viewers and listeners.

But then the tide turned, and in Miami Herald v. Tornillo the Court struck down a newspaper right of reply statute on the ground that the cost to the papers would promote self-censorship, and that editors should be autonomous. And then in 1987 the FCC abolished the Fairness Doctrine, with the personal attack rules following thereafter. Scarcity, the FCC thought, was no longer a problem. Earlier this year, there were reports that Congress was interested in reviving the doctrine to counter conservative talk radio. The backlash overwhelmed the hints of an interest.

We’re here today to talk about the fairness doctrine for the 21^st century.

Gregory P. Magarian, Villanova University School of Law

Substantive media regulation formed only a part of Barron’s vision; the fairness doctrine just happened to overlap with many of his concerns, and he defended it only in a nuanced way. It’s far from a complete solution.

Descriptive disagreements: The justification for the fairness doctrine: the general public interest in exposure to matters of public importance. Defenders tended to look with favor on the FCC’s actions in practice, though there were criticisms of the FCC’s timidity. Opponents were skeptical of the idea of a public interest – and thus of regulatory regimes generally, of course – and they pointed to some significant examples of regulatory capture. The Red Lion case resulted from a complaint largely engineered by the Democratic Party, while Nixon also tried to use the FCC against critics.

Whose autonomy does the fairness doctrine constrain? Barron argued that the constraint was on the money – wealthy media concerns with ideological agendas would advance them and exclude/marginalize opposing ideas. Advertising in particular was of concern; the fairness doctrine stopped money pressures from skewing debate. Opponents said those who bore the brunt of the doctrine were editors and journalists, making decisions about what to say (or not). Opponents drew on the democratic traditions underlying the theory of the fairness doctrine – journalistic autonomy is essential for a functioning democracy. Journalists also have professional norms to do the work the fairness doctrine sets out to do.

The proponents always made modest claims: the fairness doctrine will do some good. But they had to deal with the bifurcation of media into regulated broadcast and unregulated print, which was the post-Tornillo situation. Bollinger attempted to deal with this, arguing that we don’t know whether regulation is helpful, but there’s no way to avoid the question of what’s best for democracy. So maybe it’s helpful to have two different approaches in action.

Opponents had three main objections to the claim that the doctrine was helpful. First, there are difficult line-drawing problems – what’s a public issue? What’s fair? – so it’s almost impossible for the FCC to enforce it coherently. Second, they argued that the doctrine chilled the discussion it was supposed to produce, since the FCC almost never enforced the coverage mandate. Since you wouldn’t be called to account for not covering events, but could for covering them unequally, you should stay far away from public events. Third, opponents attacked the scarcity rationale for bifurcating the regulatory regime.

There are ways to address these concerns, for example by restricting the ability of non-FCC government officials to start the enforcement process.

Descriptively, there is reason to have a fairness doctrine: In the 40 years since Barron’s article, the economic pressure on the media industry has grown so great that it’s fair to say that the money runs roughshod over journalistic methods. The internal self-regulatory mechanisms have been nearly eviscerated. One thought would be to give journalists and editors rights against economic pressure that compromises them – we could make that a reason, or even the only reason, for invoking the doctrine in enforcement actions.

Objectivity and balance are difficult, if not impossible, to achieve through regulation, and are likely to produce a bland center. Instead, renewing the fairness doctrine should focus on debate itself – don’t necessarily make Rush Limbaugh debate liberals, but make the social conservatives debate the economic conservatives, engaging them in the thought process of debate instead of received wisdom. Another possibility: try to use the broadcast media as a way of creating a centerpost counteracting the internet’s pluralizing tendencies.

The fairness doctrine did significantly more good than harm; we need to think about reconstructing that good, getting the mass media to serve the interests of the public.

C. Edwin Baker, University of Pennsylvania Law School

Barron got the crucial issue right. But a renewal of the fairness doctrine would be harmful, and efforts to do so would divert attention from better progressive reforms.

The fairness doctrine was ideologically biased; it deterred valuable speech; it lacked a theoretical standard, making enforcement arbitrary.

The ideology of inclusiveness and balance over partisanship is an ideology. And how do we know what is a controversial idea in need of fairness? Smoking ads became controversial when the Surgeon General issued his report, but they weren’t before. This orientation towards dominant views is central to the fairness doctrine. What is balance? E.g., a balanced debate about the Sandinistas in the 1980s: The Republicans said we should take them down by force, the Democrats said we should use peaceful means. This is balance?

Ellen P. Goodman, Rutgers School of Law

Media flows from the physical transmission layer (broadcast, cable) to the content layer (programming) to meaning/salience. For communication to count, it has to be marked as salient and received by the audience. In the broadcast era, controlling the physical transmission layer meant control of the rest of the cycle, because audience attention was concentrated on broadcast content.

Salience is scarce; today’s question is how bandwidth and content affect salience. Distribution is now unbundled; regulating one layer won’t allow you to control the layers above it. The “long tail” allows every audience to find appealing content. This allows everyone to dissent and get enormous amounts of content; you can even speak back to stories about you on Google News. Viewers are now free of content they don’t want, and content providers are free of the physical layer – the “broadband bypass.”

There are physical-layer constraints; cable and broadcasters still control content, and broadband ownership is highly concentrated. But the people who control transport only control a portion of the content. Regulatory interventions may be necessary to keep them from controlling it all, but that’s not the fairness doctrine.

Broadcast still occupies the head of the long tail, but it’s fluid: network news has lost millions of viewers over the past ten years. The composition of the head also has very little to do with the physical layer; Jon Stewart can have as much influence as a network anchor. (Is this true as a statement about viewership? I thought not.) And YouTube provides another, broadband source of salience. Salience now comes from search engines and social linking functions.

The new scarcity is in the production of strong investigative journalism. A revival of the fairness doctrine would deter such journalism; this is a market failure that needs correction.

Dienes: He’s a big fan of editorial autonomy, and fears that judicial supervision of FCC regulation would be insufficient to avoid discriminatory or arbitrary application of the doctrine. Editors and reporters exercise plenty of discretion now; there’s no need to intervene on their behalf.

Baker: A proposal that is logical, though politically unviable: Reporters are being laid off everywhere, and we are desperately in need of good investigative journalists, no matter how good the editors are. We are heading to a world in which people go around talking to themselves, fact-free. Investigative journalism also has enormous positive externalities, informing people and benefiting the community, even the members who don’t read the paper. What if journalists were cheaper? Media entities would be more willing to hire them – so how about a tax deduction for half the journalist’s salary? But until journalists accept principles of political economy, this won’t be a viable proposal.

Other possible reforms, more structural than substantive: broadcasters could be required to consult with the community about what the local important issues are, and then to use a percentage of time to deal with those issues. Or a percentage of ad revenue.

Baker, in comments, made the great point that media literacy education is in fact a government-sponsored program and reflects a government intervention into the “market” for speech. (As, of course, school in general does.)

Justice Breyer at George Washington

Access to the Media Symposium at George Washington Law School

Dean Frederick M. Lawrence, George Washington University Law School:

Jerome Barron’s Access to the Press is a pathbreaking article, the hallmark of which is that after reading it you say “I knew that,” even though you’d never seen the matter that way before.

Robert Brauneis, George Washington University Law School, introduction:

Breyer’s concept of active liberty fits well with Barron’s insight that the First Amendment right of free speech is effective only if there is access to the ability to speak: They are united in practicality.

The Honorable Stephen G. Breyer:

[NB: I have, unfortunately, extracted much of the wit of Justice Breyer’s snappy and self-deprecating presentation.]

There is room for legal scholarship that addresses what is really going on in the world and then theorizes it. Academia has the ability and the mission to synthesize law (constitutional, statutory, etc.) and make it helpful to judges. “Law and…” can be useful, but traditional work of rationalizing a field is worthy of celebration.

(1) Barron’s article has a practical perspective: what is really going on? Takes the traditional/romantic/free market view of the First Amendment, what Learned Hand called the “democratic wager,” and asks what the payoff is. The traditional view says “don’t regulate speech to get better speech.” Barron introduced realism – freedom of the press only works if you own one. The First Amendment is about promoting speech, not just prohibiting government action.

There is a risk that we turn to those who reinforce our prejudices and close ourselves off to new information that may shape our views. That’s not just an individual problem. When media monopolies arise, it is hard for others to break through and communicate different information to the public. This can be true even with the internet.

(2) Barron forces us to think about what we mean by democracy. It’s not just freedom from government compulsion. How is a community of equals to behave? By participating, sharing sovereignty among themselves. De Tocqueville spoke of the “clamor” that was the first thing he noticed about America, and it was a clamor about politics. It is good for us to fight about the PATRIOT Act and the bankruptcy act, in classrooms and in chat rooms, in committee hearings and in police chief meetings. We can then return to the First Amendment and read it in the light of our commitment to a democracy of equal participants.

(3) Barron’s argument helps with cases. Turner was not too hard a case for Breyer. Congress told cable to carry over-the-air broadcasters to avoid having them shut out. Cable said “we don’t want to carry cooking programs.” Four Justices would uphold the law for economic/antitrust reasons. Four Justices rejected the antitrust reasons and said they were rubbish, thus the law was unconstitutional. Breyer thought the antitrust reasons were rubbish too, but that didn’t bar Congress from acting. His reasoning was like Barron’s: the law adds more voices without shutting lots out or disfavoring ideas. Once you’ve said that, you’ve rejected the traditional claim that you can’t use speech regulation to get more speech.

Campaign finance regulation is the same problem, only more difficult. If you believe in access, then money enables speech and donations should be protected. But what is the rationale for regulation? That $25 million from one source shouldn’t drown others out; others should have the ability to get their messages out too. Once you see First Amendment interests on both sides, the analysis is quite complicated – is this the right type of speech-promoting regulation?

(4) Barron’s article doesn’t have an ending, just a suggestion. It encourages us to think of other solutions, whether in statutes, practices, or cases. Breyer emphasizes that he will say nothing about the constitutionality of particular proposals; these are things that we might consider if we’re brainstorming. E.g., television time for presidential candidates – the French did a debate where two candidates just ask each other questions for two hours, with no moderator. If you want to know your candidates, maybe that’s better than having newspapers ask them questions; newspapers might not have the right questions.

Australian Gold-digging: reseller of genuine goods receives mixed ruling

Eric Goldman and Matthew Sag on the latest keyword decision, from EDNY.

The holding that keyword buys don't give rise to trademark claims is not the most interesting part of the case, though notably the court extends the "no trademark use" finding to cases in which the ad triggered by the keyword actually includes the plaintiff's mark. I really don't think the doctrine can be stretched that far, since I don't see how ad text is any different from text appearing on a defendant's webpage in terms of "use" -- what this is about is a shortcut to saying the use is legitimate.

I agree with Goldman and Sag that the court stumbled on §113(c): the reseller of authentic products plainly had the right to take photos of lawfully made merchandise and use those photos without the manufacturer’s consent. Section 113’s “lawfully reproduced” requirement applies to the labels on the merchandise, not to the photos of the merchandise; this is necessary to avoid an infinite regress.

The fact that the court retreated to the fair use doctrine to reach the right answer is not that reassuring. Rather, it is an example of the trend to use fair use as a dumping ground for any limit on copyright owners’ rights, which both ignores large portions of the Copyright Act and increases the pressure on that already only partially coherent doctrine.

The false advertising bit: the manufacturer argued that, by putting the words “All Rights Reserved” on its photos of the manufacturer’s products, the reseller “falsely proclaimed that [it] is the creator of the images of [the manufacturer’s] Products and its copyrighted label artwork.” (The first part of this – that the reseller created the images – is true, so it's an odd allegation.) The reseller argued that it labeled the pictures to keep other resellers from knocking off its pictures (which might possibly have enough creativity to be copyrightable, but I wouldn’t hold my breath).

On the one hand, I am willing to accept that most consumers have no idea what “All Rights Reserved” means with respect to photos of a product. But “no idea” doesn’t mean “deceived”; it means that the term is meaningless. For a literal falsity claim, this shouldn’t suffice. And the court found no literal falsity – and further held that “All Rights Reserved” was not material. Without any evidence of consumer perception, any implicit falsity claim also failed. The one purported consumer complaint submitted by the manufacturer asked whether the reseller was an authorized distributor, not whether it was the products’ creator.

The only surprising thing about this conclusion is that the court didn’t invoke Dastar to get there.

Dilution: since the manufacturer was seeking money damages and the conduct began before the TDRA became law, the court applied the FTDA. Which meant, naturally, that it was curtains for the federal dilution claim. Because state dilution claims are routinely analyzed as echoes of federal dilution claims regardless of actual language, the New York dilution claims failed as well.

iTeach

The NYT ran a story on how schools are using iPods filled with popular music and books like Harry Potter to assist in bilingual education. Much of this conduct may be allowed by the face-to-face teaching provisions. However, filling iPods with content for out-of-class practice, while obviously smart pedagogically, seems to fall outside both of the face-to-face provisions and the TEACH Act, which (like so many technologically-specific fixes) did not anticipate new forms of digital learning and is geared towards transmissions. Moreover, the teacher who transcribes lyrics and removes the nouns, verbs, or adjectives may be creating a derivative work, though the purpose is definitely transformative.

Good teaching shouldn’t be unlawful. This is why initiatives like AU’s Program on Information Justice and Intellectual Property, documenting the effects of restrictive copyright interpretations on media literacy teaching, are so important, and why we need more education and best practices for teachers doing great work like that described in the story (which doesn’t have a mention of copyright).

Ragin' Cajun: court rules against Louisiana's seafood claim

Piazza’s Seafood World, LLC v. Odom, 2007 WL 2874436 (E.D. La.)

Piazza imports seafood and, using the brand names “Cajun Boy” and “Cajun Delight,” sells it mostly to large national distributors, who then sell it to wholesalers and restaurants; a small percentage of Piazza’s seafood is sold to retail customers. Piazza successfully sued to invalidate Louisiana’s Cajun law, which barred labeling food as “Cajun” unless the food was produced, processed, or manufactured in Louisiana, on the ground that the Cajun law violated the First Amendment. Louisiana’s counterclaim under the Lanham Act remained; in this opinion, the court granted judgment in Piazza’s favor.

The state sought to enjoin Piazza from using “Cajun” in trademarks or brand names to market seafood that wasn’t from Louisiana, because Louisiana owns a certification mark in CAJUN. Piazza, unsurprisingly, argued that Louisiana didn’t own the word “Cajun,” that the court’s prior ruling that its use of the term was nondeceptive barred Louisiana’s claim, and that, in any case, barring Piazza from using the term would be unconstitutional under the prior ruling.

The court assumed that Louisiana had a valid unregistered certification mark; for Piazza to use it would be infringing. But Piazza didn’t use the “Certified Cajun-Product of Louisiana” mark. Instead, the state was trying to “commandeer[]” the term “Cajun” to allow itself “exclusive control” over how the term is used. (Comment: Yes, just like Coca-Cola “commandeers” the term Coke such that the competing product Koke must be renamed.) The certification mark is more than the word “Cajun,” and the Lanham Act doesn’t protect that single term. (Paging multi-factor confusion analysis! You’re needed in the seafood aisle!)

It’s not quite clear whether this is a separate rationale, but the court further ruled that there was no deception because Piazza’s product labeling clearly disclosed the products’ true country of origin. (See Piazza’s website emphasizing both the New Orleans and the worldwide aspects of the business, and the Cajun Boy site.) In the picture, you can see “product of USA” in block type. Perhaps that counteracts the deceptive trademark when the country of origin is China; I’m not so sure. Puzzlingly, the court ruled that the fact that Cajun is not “exclusively associated” with seafood, though Louisiana is known for seafood, made this case distinguishable from cases involving certification marks for specific foods (cheese and orange juice).

Louisiana also argued that, even in the absence of infringement, the CAJUN trademarks constituted false designations of origin. The court rejected this claim, again, because the packaging clearly discloses the true origin. Piazza thus received judgment as a matter of law. It would not matter, apparently, were the state prepared to prove that the relevant consumers did not notice the country-of-origin marking.

My take: Piazza successfully used the First Amendment as an end-run around classic principles of trademark infringement – most obviously, that the infringer’s mark need not be identical to the infringed mark, especially if consumers will not encounter them side by side. As geographic indications get more play, and as more defendants realize that mainstream commercial speech doctrine is a lot better for them than the crippled version found in Lanham Act cases, expect more of these cases.

“An invitation to lie with impunity”

Rickert v. Pub. Disclosure Comm’n, -- P.3d --, 2007 WL 2891498 (Wash. Oct. 4, 2007)

The state statute at issue banned “political advertising or an electioneering communication that contains a false statement of material fact [made with with knowledge of falsity or with reckless disregard as to truth or falsity] about a candidate for public office,” excluding “statements made by a candidate or the candidate's agent about the candidate himself or herself.” It was applied to a candidate who falsely stated that her opponent “voted to close a facility for the developmentally challenged in his district.”

The Washington Supreme Court struck down the statute on the theory that, absent defamation, falsity in political speech simply could not be punished (or even, it appears, evaluated) by the state: “The notion that the government, rather than the people, may be the final arbiter of truth in political debate is fundamentally at odds with the First Amendment” (emphasis added).

The court found that “protecting candidates” is not a compelling government interest, because the government has no right to determine political truth and no ability to do so correctly and consistently; and in any event the law was not narrowly tailored, because it covered nondefamatory malicious falsehoods as well as defamatory ones. Absent reputational harm, the government has no interest in protecting political candidates from falsehoods about them (though the court conceded that nondefamatory, false, malicious speech about private individuals could be punished).

What about protecting voters from fraud? The court further concluded that protecting the integrity of elections was not a compelling interest and that the law was not narrowly tailored. This part of the opinion, even more than the previous one, is evidence that “compelling interest” does no work in the analysis. Of course protecting electoral integrity is a compelling interest. (The court dodges by saying that the legislature didn’t refer to this interest, and that there may be a compelling interest in preventing “direct harm” to elections, e.g. by protecting the poll area or limiting the number of candidates on a ballot to those with some support. I’m not sure how that differs in directness from lies about viable candidates. If the government can’t determine truth, how does it know that the poll area needs protection or which candidates are viable?) But because there’s no government interest in determining truth, the law doesn’t advance the interest in protecting the electoral process.

Regardless, assuming there were a compelling interest, the court held that the law was not narrowly tailored. It was underinclusive in exempting all statements made by a candidate or her supporters about herself. So self-promotional lies were allowed. But there’s no reason to think candidates are less likely to lie about themselves than others, or that self-promotional lies are less harmful to the electoral process. (Hmm, I can think of a few reasons; why is it that politicians use negative campaigning again?)

The dissent argued that the majority “advances the efforts of those who would turn political campaigns into contests of the best stratagems of lies and deceit, to the end that honest discourse and honest candidates are lost in the maelstrom. … It is little wonder that so many view political campaigns with distrust and cynicism.” In the dissent’s view, there is no blanket rule against regulating false political speech, since calculated falsehood serves no First Amendment value and isn’t constitutionally protected. The “known lie” is, instead, antithetical to the premises of democratic government. Falsity and actual malice proved by clear and convincing evidence, the dissent argued, are sufficient to allow speech to be banned, without the extra requirement of defamatory meaning. Nondefamatory false, malicious speech harms the democratic process, disillusioning voters and deterring qualified candidates from running.

My interest in this holding comes from its implications for commercial speech regulation. The greater the gap in the substantive standards applied to commercial and political speech, the more important – and difficult – it becomes to police the boundary between them.

Commentary from Frank Pasquale and Eugene Volokh. Also relevant: Ellen Goodman’s discussion of false statements that may not do immediate harm, but may damage the overall system of discourse by making it unreliable, and the First Amendment justifications for regulating speech on that epistemic ground.

Upcoming copyright event

I will be speaking on a panel on Copyright and Contemporary Art Practice at Electronic Arts Intermix in New York City at 6 pm on Oct. 16. More information here.

She's a brick and I'm diapering slowly

Huggies ads suggesting Pampers fit bricks better than babies can stay on the air; the court held there were real differences between the products and that the ad illustrated this truth in humorous fashion. See the ad here. The Ad Age article recounts that Pampers prevailed against earlier claims before the National Advertising Division of the Better Business Bureau; the classic weakness of NAD proceedings is revealed by the account of the Huggies spokesperson: "[Huggies] did end the original ads subject to the NAD ruling when they 'ran their course' at the end of May." Yes, they let the campaign end, then unveiled a new ad making the same objectionable claims -- a real victory for advertising self-regulation.

Personalized publicity

“I’m the Star” prints and CDs featuring “Your Name” as the star of your favorite sport. This has nothing to do with an expectation of authorization or consistent brand image (bin Laden could order one of these things, should he so desire); it’s about licensing in gross. It’s clear that the task of trademark scholarship in this generation is to articulate the proper limiting principles for the law, regardless of what the marketers are inventing and monetizing.

Santa Clara dilution conference: Comparative Analyses of Dilution

Mary LaFrance, William S. Boyd School of Law, University of Nevada, Las Vegas
Identical Cousins? Dilution by Blurring and the Right of Publicity

Both causes of action have evolved from more traditional roots, trademark infringement & right of privacy doctrines. Each has left its origins behind to some extent. Each is a sort of property right, without a confusion requirement. The right of publicity might be called dilution for people.

But publicity has developed under common law as well as statutes in the majority of states; internationally, sometimes publicity rights are statutory, but other times they grow out of privacy traditional torts or even a constitutional right to privacy. By contrast, dilution rights are everywhere statutory, not inferred from broader doctrines.

Both doctrines have proved controversial because of empirical doubts about the existence and magnitude of any injury, as well as normative questions of when it is appropriate to use law to restrain speech to protect merchants; or about whether celebrities should be awarded rights, and how broad those rights should be in covering identity, when in the view of many no such right is needed or deserved according to accomplishments. Also, for both, there’s been no international harmonization even though laws are proliferating worldwide.

And there may be some worldwide judicial reluctance to apply dilution laws. So the TDRA, for example, is a top-down attempt to push judges to do more. British courts are reluctant, even after dilution law from EU harmonization, to dispense with the likelihood of confusion requirement. Canada has had a dilution statute since 1953, but has seen very little use, other than a case finding dilution from truthful comparative advertising, and the courts have not been able to define “likelihood of depreciation.” In Continental Europe, there’s still confusion over the meaning of the terms in the Directive.

As a privacy-based doctrine, by contrast, the right of publicity has general acceptance, and is increasingly recognized as a property right even when it was traditionally privacy-based. Germany decided, without any legislative mandate, that it’s a property right, and descendible. In the UK, this bubbling-up process of stronger publicity rights is especially noticeable – the UK doesn’t recognize much in privacy rights, because of press freedom concerns, but a court went out of its way to find harm to Catherine Zeta-Jones in her wedding photos – a breach of confidence, even though it’s hard to imagine what confidence was shared. But the House of Lords found that the European Human Rights Directive gave Naomi Campbell a privacy right more important than the public’s right to see her leaving a drug treatment facility.

Kenneth L. Port, William Mitchell College of Law
Trademark Dilution in Japan

Dilution-like protection exists – it’s a civil law system, so statutes are required. Japan’s trademark law is silent on anything that might be called “dilution.” The Unfair Competition Prevention Act was amended in 1993 to arguably cover dilution, but it never uses that word; no statute uses the Japanese word for dilution.

The TM law only applies to registered marks, but the UCPA covers using appellations identical or similar to another person’s famous marks, and use of another’s well-known marks that causes confusion – a pretty broad law, but still doesn’t discuss dilution. Japanese courts can’t keep these separate provisions distinct, so some of the most famous “dilution” cases cite the latter “confusion” provision. Either the judges are not very competent or they are fighting the statute because of its apparent breadth.

There is a myth that Japanese don’t litigate; in trademark dilution, the myth is true. There are very few dilution cases.

Elements: (1) famous appellation; (2) same or similar. (1) is something they take seriously, more than well-known, sometimes called an “exacting standard.” But: 18.3% recognition of Levi’s pocket TM was considered famous. (Query whether this was actually suspicion of the survey, if the judge thought the TM was more famous than that.) More than regional fame is required, but Japan is small, narrow and long. Hokkaido is like Minnesota and Okinawa is like Hawai’i. So can a snowshoe manufacturer ever have a famous mark because it would never sell goods in Okinawa? He thinks Japanese courts would be willing to find fame in such circumstances. Commentators say fame requires high quality, uniqueness, abstract distinctiveness, etc.; they are imposing a higher standard than the courts actually do.

How is sameness/similarity determination? Commentators say that this gets extra scrutiny because there’s no confusion requirement. Lexis/Lexus analysis would probably apply in Japan.

Why so few cases? The statute and concept are vague, and courts get confused – in a civil law situation, the statutes are usually a lot more specific. Courts use multiple terms for dilution, including “free rider” and Japanese transliterations of English terms.

David Welkowitz, Whittier Law School
State Dilution Laws

Two waves of state laws, in the 1940s and 1989-96, when states add or change laws based on the Model Bill/failed federal initiative – INTA wanted everyone to have the same law. The new version of the Model Bill requires fame; many states required state registration. By 2003, 37 states had dilutions laws; Indiana added one in 2006. About 60% of those are the newer type. There are quirks, but basic consistencies.

There are some persistent state-law cases, beyond the Allied (NY) case which was a watershed: Sally Gee (1983) (extremely strong mark); Mead Data (multifactor test); Deere (tarnishment); LL Bean & Hormel (dilution has its limits) – notice that almost all are federal cases interpreting state law.

Sidelight: the Restatement of Unfair Competition, which no one has mentioned, which came out a year before the FTDA. It is in some ways more restrictive than many state laws; it seemingly rejects Deere by requiring either TM use or independent tort; surprisingly little influence on courts, except that the Florida Supreme Court adopted its test.

Post-FTDA, state claims are filed as supplemental to federal claims. Courts assume that all state laws use likelihood of dilution. 9^th Circuit even implied a fame requirement in California’s law, which doesn’t have one. Exception: the 2d Circuit, which didn’t impose an inherent distinctiveness requirement on NY’s state law, which had plenty of history not requiring inherent distinctiveness. But there wasn’t much action regardless.

Then Moseley made a huge mess. Most states now, by INTA strategy, have “causes dilution” language because they were all modeled on federal law, and even had language saying federal law was persuasive authority. The only states that looked good for TM owners were the ones that had retained the older law, like Texas and NY. But most courts just don’t care about the differences. E.g., the “Charbucks” case in the 2d Circuit, where the court refused to grant relief even under the laxer standard.

What about the TDRA? No state law has the two explicit blurring/tarnishment categories; no state law uses the new fame factors; no state law lists the blurring factors. This will create more problems (comment: or will continue to be ignored). Drafting problems are unsolvable without state legislative action; there are virtually no state court interpretations, so the state judiciary can’t engage in creative interpretation, and federal courts are going to use federal precedent anyway. There are going to be circuit splits on niche fame under state law, but the TDRA has done away with the federal split, so we’re stuck.

Three types of law: TDRA, newer state laws, and older state laws. TDRA and older state laws use “likelihood.” But we don’t know whether it means the same things for both. The federal courts are going to take the easy way out and say “yes.” The TDRA factors distill the wisdom and experience of the past 60 years, so it’s the same.

Remedies: Lanham Act limits damages remedies; state laws may allow punitive damages and attorneys’ fees.

Caveats: older state laws only allow injunctions; newer laws track federal law and limit damages; Congress’s considered judgment should be enough to preempt inconsistent state law remedies.

Proper role for state laws: respond to unique local conditions, but there’s no unique local condition for dilution. Fill in a real gap and push Congress to pass national law, but there’s no gaps worth filling. However, if the Punchgini decision spreads, a gap may be created in the famous marks doctrine, and we may need an exception to territoriality under TRIPs. So state law should go not to dilution but to extraterritoriality, pushing towards a federal law.

McKenna: Given that INTA has written all the recent state and federal laws, why don’t they write a preemption provision?

Welkowitz: Aside from the federalism politics (which are really notional), Copyright Act experience suggests that it is very hard to write a preemption provision that doesn’t do more than you want it to do. Is right of publicity preempted under such a provision? State claims are preempted against a federally registered mark, and that’s about all you can do.

Moderator: Margreth Barrett, University of California Hastings College of the Law: It’s clear that other countries are also uncertain about dilution, arising from uncertainty about justification or purpose. In other areas, differences in common law/civil law countries can lead to different views of property rights. Is the discussion about purpose/explanation of dilution similar to the discussion here, or is there a different set of arguments?

LaFrance: Other countries haven’t extensively discussed the rationale for civil-law protection. Her impression: EU members adopted the provision under the harmonization directive without much discussion and somewhat reluctantly, though it was optional. Thus it’s not surprising that judges are a little puzzled, not knowing the challenge the laws were designed to meet.

Barrett: So why adopt the laws?

Port: In Japan, it’s because America told them to.

LaFrance: Outside the EU, the countries with strong dilution laws are a mixed bag: Mexico, Peru, South Africa. Question for Welkowitz: The state statutes tend to lack the explicit exclusions of the federal law, and courts haven’t been particularly vigilant about examining possible First Amendment defenses, the LL Bean case notwithstanding. This raises concerns of using state statutes as an end run.

Welkowitz: That was more true before the FTDA. A majority of the new states adopted the 1996 version of the model bill, including exclusions. But one of the oddities is Nevada, which defines commercial use in the statute, but not as broadly as the noncommercial use exclusion under federal law. The reality is that it hasn’t mattered, since they get subsumed into the federal analysis.

Congratulations to Eric Goldman and Jasmine Pilgeram for a very well-run conference.

Santa Clara dilution conference: Dilution Regulation, Part 2 (Doctrinal Challenges)

Graeme B. Dinwoodie, Chicago-Kent College of Law
The Role of Theoretical Justification: Dilution and Unfair Competition Law

[missed the first part of the talk] By 1995, TM owners were able to claim that TRIPs required dilution protection. This rests on TRIPs art. 16(3), use on dissimilar goods. But 16(3) explicitly stated as an extension of art. 6bis of the Paris Convention, which just extends rights to confusing uses on noncompeting goods & services. Why did Congress make this mistake in assimilation? Because it helped TM owners, and because the word “famous” had been used in state cases supposedly implementing 6bis.

The lack of a real theoretical justification means that courts have no help from the statute when they need interpretive tools in ambiguous cases. Despite the worship of Schechter in legislative history and cases, his theory only accidentally overlaps with the law; Moseley veered in his direction when it suggested that dilution could perhaps be inferred from identicality of marks. But the TDRA added marks with acquired distinctiveness, which is anti-Schechter.

Search costs theories might help, but they jump over the question whether the benefits of such a remedy are worth the costs. Worse, search costs theories suggest that dilution is more harmful for less famous marks, while the TDRA excludes such marks and protects marks that, search cost-wise, really don’t seem to need it.

The lack of connection between statute and any theory makes it easy for courts to act on their normative impulses, whether anti-free-riding or hostile to speech regulation.

Where was §43(c) well received after 1995? Cases of dishonest commercial practices, where courts really wanted to grant relief. In cybersquatting, courts dispensed with hostility to dilution (and indeed with many statutory requirements) to find that cybersquatting was dilutive. A confusion-based rationale might not have caught those instances, but dilution did. The EU TM directive is more honest about this by identifying separate harms – either an adverse effect on distinctiveness, or on a “taking unfair advantage” of the distinctiveness of the mark. The ECJ has accepted that this second part is about free riding.

In the US, many lawyers are nervous about anti-free-riding rules as uncontrolled and uncontrollable; unfair competition’s defenders use the word “flexible” instead. The inartful “trademark use” requirement in the TDRA may hamper an anti-free-riding rule, but maybe not. The newer cases also have a certain “smell” to them – as when the defendant’s explanation of how he came up with NIKEPAL was really hard to believe. Or Cliff Ledge and Rustic Stone, where the other party used Rustic Ledge and Cliff Stone. That’s unfair competition.

But where are the limits of the cause of action? Unfair competition has no obvious limits in itself, though the enumerated exceptions can be applied – it’s easier to identify things we do find acceptable than things we don’t. (The obvious consequence is to suppress new forms of behavior that are actually acceptable, but unanticipated; it’s the Type 1/Type 2 error problem embedded in law.)

Mark Lemley, Stanford Law School
Trademark Use Requirement in Dilution

Primarily a descriptive argument: (1) We’ve had a form of TM use requirement in the dilution statute for the past 10 years; (2) it worked pretty well; (3) the requirement is strengthened in the TDRA. The commercial use in commerce requirement in the FTDA was a pretty significant limit, and Lemley suggested was constitutionally required. It has the effect of requiring trademark use – the defendant had to be using the term in a source-identifying way. (Question: why isn’t a song title a source identifier? It can be registered with secondary meaning.)

Some courts just ignored this requirement early on, particularly in cases where they were motivated by perceived bad actors, such as Planned Parenthood v. Bucci, where an anti-abortion activist created a confusing website at the domain name. But courts began to figure out that dilution didn’t apply to gripe sites, T-shirts, etc. because such uses weren’t branding of defendant’s product but uses to make some statement.

Now: statute requires defendant’s use “of a mark or trade name.” It must be use of its own mark or trade name; you can see this in, among other things, the provisions for injunctive relief. The defendant must have goods or services; merely using the mark in commentary isn’t use of a mark or trade name. Moreover, the use must be source identifying. This is a narrower TM use component than “commercial use in commerce” than “use on or in connection with” goods or services, as in infringement. INTA wrote this bill; AIPLA objected to proposed language “designation of source” in order to get TM use out of the statute. Congress didn’t go with AIPLA, but did change the language to counter AIPLA’s expressed objection, which was that the term was not sufficiently well known in TM law. INTA took the position that dilution only exists when a defendant uses the mark as a mark or trade name for its own goods or services.

The exclusions take a belt-and-suspenders approach, exempting “any fair use other than as a designation of source,” and any noncommercial use, adding to the initial use as a mark requirement.

This is admittedly a morass. One might try to create a world of three nonoverlapping sets (fair use, noncommercial use, use not as a mark), but that would be a mistake, since Congress was trying to make extra sure that various activities would be protected.

TM use is a more important requirement in dilution than infringement, because dilution’s boundaries are so much more unclear and because dilution potentially affects much more speech than infringement. Coupled with well-recognized difficulties in defining and proving dilution, the importance of exclusions is clear.

If anything, the TM use requirement in the statute is too restrictive. There is an admittedly amorphous line between things that ID source and things that don’t. A defendant’s conduct that suggests affiliation or sponsorship might not be dilution because that doesn’t identify source, about which the statute is specific. That buys us some clarity – it’s easier to identify what’s a mark than what identifies affiliation. But it means that dilution doesn’t cover some things that those who believe in the dilution project might want to cover.

Xuan-Thao Nguyen, SMU Dedman School of Law
Searching for Fame: The Challenge of Proving Property in Trademark Dilution Law

Outside the US, most countries require registration; art. 6bis was a major step forward for them in not requiring registration for a well-known foreign mark. How do you determine whether a mark is well-known? In Taiwan, they look at many of the same factors as the US does. The degree of recognition, the duration and extent of use, registration in other jurisdictions to record the rights in the mark, record of successful enforcement, value associated with the TM. China also looks at similar factors, including records of protection of the mark as a well-known mark. Brazil allows recordation of Well-Known marks, good for 5 years. Australian debates pointed out: There is inconsistency in how well-known status is determined and enforced worldwide. What is it that we’re trying to do with such protections? That question must be answered before we can achieve consistency.

The US isn’t all that clear on fame either. You can spend $130 million a year advertising (Advantage Rent-a-Car v. Enterprise Rent-a-Car) and still not be famous; the ultimate test is consumer recognition. It’s not about TM owner’s spending; the property is in the mind of the consumer. Best brands in Harris Poll 2006: Sony; Dell; Coca-Cola; etc. – GM & Microsoft dropped off the list. This is significant because of debates over whether we should have a registered list of famous marks; we shouldn’t because consumers change their minds over time.

Lisa P. Ramsey, University of San Diego School of Law
Increasing First Amendment Scrutiny of Trademark Law

This was an application of Ramsey’s First Amendment work to dilution, where she suggested recognizing an independent First Amendment defense over and above the exemptions in the law. Actionable uses of a mark are communicative acts – that’s why they blur, or do whatever it is that they do. Thus, even if regulation is constitutional, First Amendment analysis is at least required.

Dilution laws are content-based speech regulations; not all uses of terms lead to liability, such as noncommercial uses and commercial uses in comparative advertising. Dilution is designed to control the communicative impact of the mark: what words third parties can use when they talk about their marks. This is word-based discrimination, like bans on profanity, as well as speaker-based discrimination favoring TM owners. But regulating commercial speech is less problematic than regulating other types of speech, so that’s not necessarily fatal.

There might be a compelling government interest in protecting producers by banning dilution, but she doubts it. Some people suggest that dilution protection reduces consumer search costs. That might justify upholding the law, if it could be empirically established. But then there’s a tailoring requirement; Ramsey argues that the law is not properly tailored to survive heightened scrutiny. Marks with only acquired distinctiveness and unregistered marks, she argued, should not be protected.

Moderator:
Tyler Ochoa, Santa Clara University School of Law: does a well-known mark under the Paris Convention mean the same thing as a famous mark under TDRA?

Dinwoodie: No. Grupo Gigante thinks it’s somewhere between secondary meaning and federal fame, and, without committing to a fame standard, that makes sense to him. The basic purposes of the confusion-based 6bis right are implemented by protecting any mark with secondary meaning. But the problem with extrapolating to that logical conclusion is that territoriality is also an important consideration and there is value in having different rights in different countries. Give a tip of the hat to territoriality concerns by requiring secondary meaning-plus. Dinwoodie still doesn’t know why we have the fame standard, but it’s not motivated by the same concerns.

Nguyen: Federal fame is a much higher standard than “well-known” – in fact, maybe dilution protection doesn’t implement 6bis at all since it won’t protect most marks against uses on noncompeting goods.

Dinwoodie: Yes, for example, niche fame could be well-known.

McKenna: Not persuaded by Lemley (no surprise), but given the empirical work and the relatively little work dilution does above infringement, does it matter if the dilution standard is tougher?

Lemley: That’s part of the larger question of whether dilution matters. Maybe it’s not worth being here, and there’s some truth to that. But the verdict is still out, because nonrepresentative cases have been litigated in the past year. Also, even if it’s true infringement and dilution stand or fall together, they influence each other. So how often do courts distinguish between the two requirements? That’s a key question. Courts might take up the requirement from dilution and apply it to infringement. He’s not saying they should do that, but they might.

Q: Is the fair use section applicable to dilution, and does it address the First Amendment concerns?

Lemley: §1114 doesn’t by its terms apply to dilution, but the FTDA does have an exception for “any fair use,” including descriptive fair use, “other than as a designation of source.” He doesn’t know if there’s a universe of things that designate source that would otherwise fall within §1114.

Dinwoodie: INTA briefed this in Chewy Vuiton: INTA argues that the trademark use requirement constrains the parody defense, such that parodies aren’t allowed if they are uses as marks.

Ramsey: As Dinwoodie expects, she thinks the First Amendment requires more leeway for parody. That’s one of her concerns with the exceptions – use in a slogan or domain name has been held to be use as a mark. So an independent First Amendment defense would be advisable, though she thinks courts can work within the statute to achieve similarly limited results.

Bone: How much do we trust judges? If dilution is really unfair competition, and we don’t know what unfair competition is, we are relying on judges’ intuition, and the track record in trademark is bad (e.g., trade dress).

Dinwoodie: TDRA was inartful, as Lemley said, but it does include a TM use requirement (he thinks Lemley pulled the wool over INTA’s eyes). But he’s not too sure about source identification – if you read that in a 2006 sense instead of a 1947 sense, you get a much broader scope of source identification. Lemley says non-source ID uses are those that don’t increase search costs; how does that apply to dilution? South Africa has a case about showing a BMW in advertising, where the court said there is a TM use requirement for infringement, but dilution is not about source-identifying capacity and so there’s no such limitation, the reverse of the situation Lemley argues here.

Lemley: Bone’s question: I trust courts when we give them a coherent principle. There are lots of people who think “unfair competition” is a redundant phrase, and it’s far too easy for courts to agree with that. The more confidence you have in the coherence of unfair competition, the more tolerance you have for a general statement of principle v. statements of limitations. As to Dinwoodie’s question, Lemley believes dilution can be justified, if at all, only on the same search costs rationale that justifies TM infringement. Thus the TM use requirement should apply to all.

Santa Clara dilution conference: Dilution Regulation, Part 1 (A Look Back)

Barton Beebe, Cardozo School of Law

The TDRA Case Law After One Year: A “Whole New Ballgame”

Not so much to report, one year later: Courts are still applying the FTDA, which is pretty shocking.

How many opinions actually consider the TDRA? For copyright fair use, the ratio of articles to decisions is roughly 3:1. Are courts thinking about dilution, or is it just academics and C&D letters? So far, courts continue to apply the FTDA; not very many cases yet.

Where are the opinions coming from? Widespread, in fact, not just the SDNY. Summary judgment motions that make it to the opinion stage tend to be granted, though of course there are selection biases; both defendants and plaintiffs make them. Both bench trials found dilution.

What was the relationship between infringement and dilution? 32 district and 5 circuit opinions addressed both, and 34 of 37 had the same outcome, a correlation of .939. The outliers: infringer ceased conduct before TDRA; the American Blinds case (no fame); and a third case where the court didn’t seem to know dilution was being argued but dealt with it anyway. The word count of infringement v. dilution shows that courts devote 4 words on infringement to every 1 on dilution.

Robert Bone, Boston University School of Law
Schechter’s Ideas in Historical Context and Dilution’s Rocky Road

Schechter offered a general theory of TM law; we need to see him as a legal realist, arguing in a pragmatic and instrumental style. No one criticized his article on the merits, though no one adopted it either. It was received positively, which surprised Bone given how radical his thesis was. But Schechter was more of a scholar than an advocate, and there was already a good theory – goodwill as property, which had the benefit of uniting consumer harm and producer benefit as a justification for expanding trademark.

His first premise: The true function of a TM is to sell the goods. During the 1920s, psychological advertising was at peak popularity, and Schechter had the magnetic, drawing power of the mark in mind. He was deriving from actual practice. Second step: selling power depends on distinctiveness. If those things are true, then law should protect selling power, and the only rational basis for TM was the protection of distinctiveness.

Conventional account: Schechter was trying to bring TM theory in line with modern advertising, and the main doctrine he was trying to modify was the direct competition requirement. He failed because he never really offered a justification for dilution (as opposed to expanding infringement).

Bone says no. (1) He wasn’t targeting one particular doctrine but applying his new general theory. (2) He wasn’t impatient with the pace of doctrinal change. He knew the best way to get the courts to expand TM law to cover noncompeting goods was to push on confusion-based theories, and his contemporaries did just that. Rather, he thought he had the right theory. (3) He offered a functional justification: TM should serve the way marks actually function in the economy. (4) He was not a formalist; he didn’t think the label “property” did much help in figuring out what rights people should have.

So what was he doing? As a pragmatist, Schechter had to explain why the way the market worked in the 1920s was a good thing. He was looking at why the market was putting pressure on the competition requirement, and why courts were tempted to relax it, in order to expose the policies behind these changes and focus on the underlying policy issues rather than the formalist categories used to channel policies.

Shari Seidman Diamond, Northwestern University School of Law
Expansion and Contraction with the Trademark Dilution Revision Act?

Diamond is interested in comparing dilution to another change in the law whose practical effects were unclear: Daubert, when courts were told they’d have to become gatekeepers for scientific evidence. The Court wrote Daubert as if it were clarifying the FRE. But what really happened after? Diamond suggest results similar to Beebe’s: less going on in the courts than in the law reviews. She refers to Clarisa Long’s empirical analysis of dilution claims, including ones without reported opinions. Over time, opinions became less and less friendly to dilution claimants. Can the TDRA reverse this?

Some of the TDRA’s clarifications expanded dilution (express coverage of tarnishment, marks with acquired distinctiveness, likelihood of dilution), others contracted it (no niche fame, scope of the exclusions). (I’m not so confident that the scope of the exclusions is now broader, specifically with respect to titles of expressive works, which now may qualify as “use as a mark.”)

Why do we see so little change? Most dilution claims are tacked on to a laundry list of other claims, and generally turn on traditional infringement.

In the past 6 months, some marks have been found to be famous – including Nike, “for dummies,” but also possibly “Tempur-Pedic.” Not famous: Tyler Green, Air Cargo News, and Cosi’s (though the court there merged its fame and blurring analysis, holding that branches in 16 states & DC wasn’t enough to constitute fame).

It’s possible that it’s just too soon to see change, or that cases are settling and aren’t reported. Also, some circuits already applied these various limits, and few fact patterns actually need/fit a dilution action.

Shubha Ghosh, SMU Dedman School of Law
Competition Norms in the Law of Trademark Dilution: The Ascendancy of Misappropriation and the Descent of Competitive Entry?

Competition norms pervade IP generally. Competition arguments include: (1) first mover/misappropriation model, where we prevent competition through mere imitation or free riding; (2) controlled entry, where we control unnecessary duplication and excessive entry, often through licensing; (3) consumer welfare protection, in which competition protects consumer interests, sometimes recognizing competition between consumers and producers – fair use, experimental use, TM; (4) wealth maximization.

TM includes both (1) and (3), trying to reduce search costs.

Ghosh looked at 130 appelate cases on dilution. 49 contained a substantive ruling on dilution, and 22 involved claims against competitors. Of those, the TM owner won 9 and the alleged diluter won 13. Half of the victories for the alleged diluter were before Moseley. 5 out of the 9 TM owner victories were after the TDRA, while only 3 out of the 13 diluter victories were.

Dilution is often just redundant; should it ever be available against a competitor? Perhaps, when the infringer is duplicating the brand in order to reduce its own costs.

(My question: What would those costs be? Communicating what the brand is to consumers? But that’s very close to nominative fair use/comparative advertising. His answer: Ghosh suggests there are different types of search costs – (1) knowing where to find things on the shelf or (2) consumers have no idea what the product is like and the TM serves as a screening device; in the latter type of case there is a role for dilution. I’m very interested in the paper expanding on this concept, because I’m not sure I can see the difference. In a case I worked on, XALATAN v. TRAVATAN for two drugs competing in the market for glaucoma medications, there’s no classic or nominative fair use, but the allegedly dilutive use of ATAN can communicate something about the type of drug precisely because it borrows part of the allegedly unique and famous mark. Borrowing the TM helps doctors screen, but truthfully so. In any case between competitors, it seems to me that (1) is more likely to win out.)

Lisa Ramsey: What percentage of opinions are not reported? What effects on results?

Diamond: It’s a significant number. There are distortions; even PACER is incomplete.

Lemley: Touts coming Stanford IP Litigation Clearinghouse, to collect this type of data. TDRA has a damages reset: No damages unless the dilution began after Oct. 2006. That means that the subset of cases decided in the last year is likely to be skewed in interesting ways.

Graeme Dinwoodie for Bone: That contradicts conventional wisdom on the radical nature of Schechter’s theory. But didn’t he still have a concern over free riding?

Bone: He was certainly concerned about it in general, though he said little about it in Rational Basis. He looked for fair trade in trade practices, which was difficult but was the standard difficult problem for legal realism of finding the good in the extant.

My comment on Diamond: What’s notable about the list of TDRA changes to me is that the “expansions” are all reversals of things that outlier courts did contrary to pretty obvious congressional intent. We’re “expanding” our way to the situation immediately post-FTDA – which is not necessarily a small thing, given that courts at first applied the FTDA broadly. Congress sent a signal, but it is at least one the courts can choose to interpret as a rebuke only on specific doctrines rather than an instruction to apply dilution broadly. Compare the as-yet unenthusiastic judicial response to the TDRA to the enthusiastic embrace, and expansion, of Dastar. Hypothesis: Part of a general overall move to laissez-faire in civil cases that here affects outcomes of business-v.-business cases as well as the more obvious effects in consumer-v.-business cases?

Santa Clara dilution conference: Consumer Perceptions, Part 2

Laura R. Bradford, George Mason University School of Law
Trademarks and Emotion

Positive affect from famous marks stems largely from familiarity and to a large extent is independent of brand meaning. Regulating the emotive power of trademarks by giving TM owners control of follow-on uses may be harmful overall.

People have extended the search costs account of infringement to dilution: dilution causes consumers to think for a minute before connecting the mark to its goodwill, reducing its capacity in conveying information. This is an informational, not evaluative, account. We can see why people have been skeptical – does a few extra seconds in the grocery store matter?

Look at emotion: Ralph Brown’s initial account of brands being used to mesmerize consumers into paying more for identical equality. More recent scholarship is that the emotion is part of the benefit of the brand: if women think that floor wax will make their husbands love them more, they’re actually getting more of what they value. It’s paternalistic to argue otherwise. But under either account, consumers are posited to weigh costs and benefits based on associations and then make a rational decision.

Bradford focuses on a subset of emotion, affect: a primal feeling of like or dislike experienced in response to a stimulus. Emotions allow us to make decisions; people with certain brain damage can reason rationally and identify costs and benefits, but they can’t decide because they can’t classify stimuli as good or bad. Affect is especially important in low-involvement processing situations, when the decisions aren’t all that important to them or when people are pressed for time.

Familiarity is a great predictor of affect. People often misattribute appeal to the stimulus rather than to the ease of processing the stimulus, and they even concoct rational explanations for this. Brain imaging suggests that purchase decisions involving familiar brands involve more emotional areas of the brain, rather than memory-storage areas, compared to decisions involving unfamiliar brands.

Possible justifications for dilution: If we see things too often, we get bored with them, though it’s highly contextual. There is some evidence that promiscuous use may make a stimulus “unsafe” – we no longer know what it means. It’s possible that your pause to think may make you get angry at the brand and punish it for making you think, turning tarnishment into a subset of blurring. But now we’re talking just about the primal affect arising from familiarity, not the specific brand meanings trademark owners say they want to protect.

If we accept that dilution causes involuntary changes in preferences, and grant protection on that basis, we’re engaged in a funny kind of paternalism. It’s not protection of rational choices, nor even protection of positive emotional associations specific to the brand. We’re protecting convenience – familiarity -- in its bluntest sense, without adding to the value of information in the marketplace; the credence associated with familiarity isn’t associated with quality, value, or anything else. In other areas of the law we don’t grant rights to mental processes in this way. The information produced as a result of free riding may be better information, letting us know about other options or richer meaning.

Christine Haight Farley, American University Washington College of Law
Mental Associations and Evocations: the Slippery Slope of Dilution: AKA Frank Schechter was a man ahead of his time, but now he is dead

Harley Davidson sells motorcycles, but also cake decorations. TMs are being marketed for something much broader than source. Harley Davidson, according to the owners, represents “Americana” – a promise to represent customers and fulfill expectations. The language of “promise” is quite common. Corporate extension licensing is widespread: real examples include Oreo Fun Barbie, Chanel skis, and zillions of Virgin products. Compare to Buick shoes, Kodak pianos, etc. – Frank Schechter ’s examples of dilution.

These are not different in kind. The only difference is that in the real examples the use is authorized. Yet authorization wasn’t the ill Schechter sought to remedy. He spoke of damage to distinctiveness. Schechter wanted to preserve the association of the mark with goods, shuddering to think of Ritz-Carlton coffee not because of the problem of “which Ritz-Carlton”? but because he wanted Ritz-Carlton to mean just one thing. The problem is that TM owners no longer want that type of exclusive association.

Why? Brand owners say new brands are too risky and expensive; there’s too much noise in the market; it’s beneficial to the brand. Evian licensed its mark to J&J to produce a hydrating face cream, which helps Evian promote the brand attribute of hydration. Does this cause dilution? No, the core brand isn’t harmed. And if there isn’t inconsistency with the brand attributes, there’s no dilution from an extension. Dilution only occurs where the use is inconsistent with brand attributes and the inconsistency is salient to consumers. Virgin has a history of brand failures with positive effects on the mark; Virgin is a rebel/challenger even when it fails. A Harley Davidson toilet seat shouldn’t dilute the mark because it fits the brand attributes, nor should a cheaply made Harley Davidson leather vest. Harley Davidson pastry, however, may have a dilutive effect.

Judy Zaichkowsky, Faculty of Business Administration, Simon Fraser University
Explaining Dilution Through Balance Theory

People seek to balance cognitive and affective states – people avoid information inconsistent with their attitudes, etc. Companies want people to have positive attitudes towards goods & services, inducing positive behavior/purchase. The goal is to avoid tension (e.g., being enemies with my friend’s friend). A simple strategy: associate your product with one for which your audience already has positive feelings. Celebrity endorsement is a classic example; rap stars singing “Pass the Courvoisier” leads consumers who like the song to like the liquor.

An example of unlicensed use: posters with Girl Scouts used to associate them with unwed pregnancy. People who like Girl Scouts rarely like unwed mothers, so seeing the posters makes them tense and they need to resolve the tension by adjusting their favorable attitudes towards Girl Scouts down or unfavorable attitudes towards unwed mothers up. This is dilution.

More recently: clubs banning particular brands for association with gangs; these brands are expensive. If you wear the brand, you are labeled by association, and the association is negative; it may harm the brand value. UK pubs have banned young people wearing Burberry for association with “football hooliganism” (chavs). They hijacked the Burberry brand.

(Comment: How interesting that these examples are not things to which American dilution law could apply – nor even European law, at least in the club examples. This is my point about the TDRA targeting the mote in a TM owner’s eye while ignoring the beam right next to it.)

Marketing solutions: change look of brand, end production of branded baseball cap.

Moderator: Dorothy Glancy, Santa Clara University School of Law

Q: How is emotion connected to balance theory?

Zaichowsky: It fits right in, with all the products you use to make yourself feel better – chocolate, diamonds, etc., though people aren’t like that about toilet cleaner.

Bradford: Some research suggests you can be emotional about toilet cleaner in a primal sense; you don’t care at all in any overt way, but you react well to familiarity that provides a sense of safety.

Lemley: To what extent does blurring require some sort of misleading? There must be some way in which consumers are led astray in your model.

Bradford: It depends on how legitimate you think familiarity is in expressing a true preference of the consumer. It helps us conserve cognitive resources, so we feel positively towards the brand/trust it; a free rider jams that signal and makes us feel the brand is riskier. We could call that misleading, but we could also say that the jamming is as neutral as familiarity; both are disconnected from specific information about the brand. The dilutive use tells you that the brand is popular, interesting, etc. Louis Vuitton case: the fact that it’s used for a dog toy tells you that some people find the brand pretentious. Consumers might feel more negatively about the brand after exposure to the dog toy; an involuntary change of preferences, true, but Louis Vuitton’s fame was also causing involuntary change of preference.

Q: Is there any remedy for what happened to Burberry? The chavs weren’t using it as a brand.

Zaichowsky: Sure they were, they were using it as an identifier for … whatever.

Lemley: It’s the “whatever” that’s the issue.

Zaichowsky: I’m just a marketer, giving you examples. Burberry had no choice but to change away from the plaid.

Q: To what extent is this really an issue of counterfeiting? The chavs were using a bunch of counterfeit goods.

Zaichowsky: Balance theory doesn’t care whether it’s authentic Burberry or not. It’s the image that matters.

Q for Farley: So if Harley Davidson markets toilet paper, that’s not dilution, but marketing bidets would be?

Farley: Yes.

Q: Wouldn’t that make bidets into Americana?

Farley: They’d have an uphill battle on that one.

Mark McKenna: There is a bunch of evidence that brand extensions don’t have feedback effects, but Zaichowsky offers examples where there is negative feedback. But these are noncore, communicative uses; the ones that don’t matter are the core trademark uses. The statute only covers those, but the research tells us that those are the ones we don’t need to worry about.

Trademarks without Pity: What is a source identifying function?

Mark Lemley and Stacey Dogan have argued, quite persuasively on normative grounds, for a "trademark use" requirement before infringement can be found. Graeme Dinwoodie and Mark Janis have picked apart the statutory and historical support for such a requirement, but these days I'm leaning mostly towards Mark McKenna's primary argument (also made by Dinwoodie & Janis): as long as anything can serve a source-identifying function (remember Breyer's rejection of ontology in Qualitex), trademark use isn't a helpful limit.

Here's an interesting set of examples. Glarkware sells, among other things, merchandise associated with TelevisionWithoutPity, the TV recap/commentary/discussion site. This merchandise often refers to shows, though the references will be obscure to nonfans. So there are shirts for Smallville, Supernatural, Battlestar Galactica (on the first, the font is similar to the show font), Heroes (much more obscure in its reference than the T-shirt from a few weeks ago), The Daily Show, Lost (II), Jeopardy, Veronica Mars (the second particularly interesting because it initially appeared in the show as a shout-out to TWoP), House, 24, Star Trek, America's Next Top Model, Six Feet Under, Gilmore Girls, Alias (II) (III) (IV), Prison Break, Desperate Housewives, and many more, including ones I just didn't understand.

The copy is coy as well, winking to those in the know, which is either clever marketing or clever legal advice, possibly both. E.g., the second BSG shirt says: "A toaster is capable of a lot more than you might think at first glance. Even more than toasting your bread, actually. Treat it poorly, and it will find a way to collude with other toasters to overthrow humanity. But treat it well, and...well, you and that little old toaster might actually find love. It's not a love that either of your communities will sanction or even understand, but you know best: that seemingly simple appliance loves you from the coils of its heart."

So, assuming that the relevant consumers (TWoP-using fans) will understand the references -- which is why they buy the shirts in the first place, so it seems pretty likely -- are the images and words serving as indicators of source? Should trademark owners have the right to authorize such merchandise? I think not -- and I doubt that consumers regularly perceive references as indications of source or sponsorship, even if they've been successfully trained to expect authorization for ordinary repetitions of a primary mark on promotional goods like T-shirts. But I'm not sure trademark use can help in that analysis.

(The image at the top of the post appeared on a shirt with the words "Look upward," which were used in the opening voiceover on later seasons of Farscape, the brilliant SF show; the image is of the Farscape module against a wormhole. I wish I'd ordered that shirt when I had the chance.)