Plumb disappointing: 9th Circuit reinstates 2D-to-3D copyright claim

Direct Technologies, LLC v. Electronic Arts, Inc., Nos. 14-56266/14-56745 (9th Cir. Sept. 6, 2016)

Electronic Arts makes the game The Sims, and contracted with a production company, Lithomania, to produce a USB flash drive shaped like a “PlumbBob,” a gem-shaped icon from The Sims to promote a “Collector’s Edition.” Lithomania in turn contracted with Direct Technologies to produce a prototype, then shipped that prototype to a company in China to make essentially the same flash drives for $0.50 cheaper per unit than DT proposed, while lying to DT about the fact that it had been cut out of the deal, apparently in order to get it to sign agreements including IP licenses. Lithomania told EA that it had received a vendor agreement from DT, “so IP’s are all protected.” EA responded, “Great. . . . Protect us all.”

 

PlumbBob icon

USB drive

DT ultimately settled breach of contract claims with Lithomania, then sued EA under the federal Copyright Act and the California Uniform Trade Secrets Act. Here, the court of appeals reverses summary judgment for EA on copyrightability, in my opinion mistakenly, and affirms summary judgment for EA on trade secrets given that the design at issue did not derive independent economic value from being kept secret. EA couldn’t get attorneys’ fees on the trade secret claim, though.

Background: When a player controls a specific character, the PlumbBob appears over the character’s head, which is “an iconic symbol of The Sims.” According to the court, EA has a copyright in the PlumbBob (separately registered?).  Thus, the question was whether the USB flash drive had enough independent creativity to be a copyrightable derivative work.  DT alleged two creative aspects: (1) the USB drive had 12 equal sides, whereas the icon had 20 unequal sides; and (2) DT designed the USB drive to fit into the PlumbBob with a “futuristic cut away look . . . at a unique angle.”

 

USB design

Protection requires nonfunctionality, separability, more than trivial originality, and lack of any effect on the scope of copyright in the preexisting material.

DT argued that the fit of the flash drive had a “futuristic cut away look . . . at a unique angle” which was nonfunctional. The court found that there was a genuine issue of fact about whether the design was merely functional or utilitarian. The “mere feature of having a USB flash drive that can be removed from the PlumbBob object” wasn’t copyrightable.  But the manner in which the USB drive was “cut away” was potentially non-functional. [This is the exact kind of reasoning our brief in Varsity Brands argues shouldn’t ever constitute separability: the choice, however aesthetic it might be, is coextensive with the fact that it is for an object containing a USB drive, and thus is not separable from the utilitarian aspects.]

The record showed that DT considered four other designs, and the designer submitted a sworn declaration explaining that his ultimate choice was made “for aesthetic reasons.”  A jury could find that this design feature was “truly ‘artistic.’”

Alternative designs

As for originality, having 12 or 20 sides wasn’t an original choice, since EA’s versions of the PlumbBob already included both as the icon changed over time. “Even assuming that DT’s version has a slightly different shape than the drawing presented by EA, we have held that a character’s copyright encompasses its ‘distinctive character traits and attributes, even if the character does not maintain the same physical appearance in every context.’”  However, there was a genuine issue of material fact about whether “the manner in which DT designed the USB drive to fit into the PlumbBob object” was sufficiently original to merit protection.  [Again, note how this framing makes clear the inseparability of the aesthetic choice from the fact that the choice is about how to design the useful object.]

EA argued that the design was so similar to the PlumbBob that if it were copyrightable, DT would have “a monopoly on all USB[ drives] shaped like the PlumbBob, and perhaps even any other 3-D embodiment of the PlumbBob.”   The court of appeals disagreed: DT would only have “a copyright in its unique contribution—the artistic manner in which it designed the USB flash drive to fit into the PlumbBob object.” DT’s copyright “would obviously not preclude others from making a 3-D PlumbBob without a flash drive.” [If this is true, again, then there’s no separability—if the only originality comes from a choice that can’t be replicated without also putting a USB drive in the object, then the utilitarian design isn’t separable.]

A jury could also find that EA wasn’t a joint author, but only in a position to offer suggestions, and that DT’s design had “audience appeal” (one factor in the 9^th Circuit’s joint authorship inquiry). Moreover, as to the IP license in the vendor agreement with Lithomania, a jury could find that, “if the contract was fraudulently induced, such that it was invalid from the beginning, there would be no valid contract for EA to enforce.” 

Another court finds that injury from fake "sale" prices is redressable

Le v. Kohls Department Stores, Inc., 160 F. Supp. 3d 1096 (E.D. Wisc. 2016)

Le sued under various state consumer protection statutes (and unjust enrichment), alleging that Kohls falsely advertised “sale” or “discount” prices off of the “regular” or “original” item prices, which were not in fact regular. As a graph from Consumers’ Checkbook/Center for the Study of Services, an independent, nonprofit consumer organization, indicates, “at Kohl’s, the sales often never end”:

 

CC graph

Le alleged that Kohls’ marketing tactics are economically harmful because they deceive consumers to: (1) buy products that they would not have bought “but for” the illusory “sale”; or (2) pay more for products than they would have paid had they been fully informed of the actual “item price.”

Kohls moved to dismiss, arguing that Le didn’t offer a legally cognizable method of calculating his claimed restitution.  Kohls argued that restitution would require proving a difference between the value of the products Le bought and the price he paid.  He didn’t allege any such difference.

The court, however, concluded that California’s UCL and CLRA didn’t confine restitutionary relief to that available under the price-to-value method.  The appropriate measure of recovery depends on the circumstances.  Furthermore, determining the proper calculation would be inappropriate at the pleading stage, and the court reserved questions about how to factor in the value of the products that Le received.  The measure of his harm, as alleged, was that he bought a product that he paid more for than he would’ve been willing to pay if he’d known the truth, which is a measure the 9^th Circuit has endorsed.  Likewise, the court allowed Le’s claims for injunctive relief to continue.  Although he was aware of the alleged scheme, that wasn’t enough, because to use that as a reason to preclude injunctive relief would vitiate the intent of California’s consumer protection law.  Le properly alleged the likelihood of continued harm because he alleged that the pervasive, ongoing scheme made it impossible for any consumer to tell what the true price was.  Given that Le wasn’t complaining about a specific product but a broad practice,

the Court is unclear just exactly what Le would be expected to be “aware” of in order to avoid future harm from Kohls. For example, should Le be “aware” that housewares are deceptively priced, while men’s apparel is not? Should Le be “aware” that Kohls’ holiday sales are more egregiously deceptive than their day-to-day offers? These hypothetical questions underscore the point that discovery is necessary to parse out the salient facts in relation to Le’s claim for relief.

The court also allowed Le to claim on behalf of a multi-state class of consumers, at least under Article III at this point in the case; choice of law issues remained to be decided.  The court acknowledged Kohls’ “prudential” concerns about the effects of this kind of claim—presumably settlement pressure—it pointed out that, via CAFA, Congress “authorize[d] federal judges to resolve big-stakes, multi-state class actions.”

The Wisconsin Deceptive Trade Practices Act claim survived because, though it required statements “made” or “disseminated” in Wisconsin, Le adequately pled that Kohls’ principal place of business was in Wisconsin and that its “acts, practices and policies pertaining to the advertising, marketing, and sale of merchandise...were established and emanated from Wisconsin.” Even if Le “saw” Kohls’ allegedly deceptive statements in California, the ads at issue were “made,” and then “disseminated,” by Kohls from its Wisconsin headquarters.

Unjust enrichment claims also survived in the alternative.

Stanford Sociology and Psychology of IP

Session 5: Fairness, efficiency, and distributive justice

Discussion leaders: Stephanie Bair: Concepts of ownership/justice in ownership may be universals—studies of children across cultures.  Purpose of IP as understood to be to prevent plagiarism—asking for permission is sufficient, though, in many of these lay understandings. Organizational context studies: Also a distributional component to fairness. Contributors to project: rewards distributed unequally = offended sense of justice.   Creators perceive work environment as fair if there’s respect and trust. A procedural aspect: more likely to think distributional outcomes are fair if the procedures used to determine outcomes are non-arbitrary or otherwise perceived as fair.

Psych literature can link efficiency and fairness. Fromer proposed: moral rights are incentives for creators b/c creators really care about them.  Silbey’s interviews w/creators found much the same. Organizational behavior literature backs this up.  In companies, people choose voluntary creative behaviors more often when they perceive the work environment as more fair; they experience more intrinsic motivation.  Leads to objectively more creative outcomes.  Might be important to pay attention to fairness to continue intrinsic motivation.

We think more innovation is good; if asked why, we might say it contributes to economic growth/social welfare. If you had distributional concerns, you might think we could use tax to deal w/distribution. But there are people who take issue w/the idea that economic growth is necessarily a good thing or the best way to measure welfare. Maybe we should be using measures of happiness or subjective well-being (Buccafusco), or a capabilities approach as Sunder has argued.  How/to what extent should IP be promoting these alternative visions of social welfare?

Rob Merges: W/studies you can say that policy implications are unclear; if you reveal an instinct, that doesn’t mean that instinct should be driving policy, since some of our instincts need to be controlled. But it’s a good case study: we tend to interpret empirical work in a way consistent w/our normative starting points.  Consumer of literature on natural instincts, so needs to be careful.  Still thinks there’s something powerful in the idea: when empirical work lines up with philosophical theories about the right or need for ownership, that’s two different methodologies pointing in the same direction.

Strongest finding across methodologies: sense that we don’t give enough respect for attribution in the US.  US is deficient in reflecting intuition that attribution is important. That’s low-hanging fruit—people will take attribution rights in place of extra compensation. Almost all the studies—experimental, interview, theory—show that it’s something we really should care about. Policy insights would say: we probably got Dastar wrong, and we need some kind of more formal attribution right in US IP.

When we look at how important design is in the modern economy—our theories about TM are running into empirical evidence.  There’s this sense that design is important and we want to encourage it but our TM theory is stuck in consumer protection mode and we’re having trouble adapting it.  If theory tells us that all this solicitude for designers isn’t what TM is about, one response is to kick it out; but if we want to respect design work, maybe we should look at the existence of the design profession exploring new ways of being creative and adjust our TM theory rather than adjusting that evidence.  There are also other areas where theory is out of step w/empirics; need to be more flexible.

Case about how we interpret the studies we used. In the MRI studies, associations around brands light up same part of brain that responds to religious icons.  It’s easy to criticize that; materialist might say religions are very old brands, or might say that brand designers have tapped into something very deep, which takes a lot of talent, and that means it’s worthy of protection [the protection we grant to religions to bar other people from using their icons?  Herein of “if value, then right.”]

Innovation w/o IP versus IP without IP.  IP as exception rather than rule (older version); IP in context (becoming more modest about role of formal IP rights; willing to substitute with tax policy, credits, etc. if it can do the job better). Related to negative space, but broader policy canvas: contextualizing IP as a modest part of a big set of social norms and a big set of policies. Requires some humility in our field.  Private initiatives like the movie title registry MPAA runs; agreements not to sue (smaller scale)—that’s transactional efficiency in the presence of IP. Strong form of IP w/o IP is where it doesn’t exist or has been replaced by informal norms. Entertainment industry is intermediate b/t complete stranger to stranger interactions and very close-knit organizations like roller derby.  Spectrum from anonymity to somewhat shared interest to close-knit; IP plays into norms differently in those situations b/c social distance is a fundamental idea in sociology.

We have to be careful about areas where IP seems to have been displaced: don’t extrapolate close-knit groups to other areas like intermediate or anonymous. Norms only work where there is social proximity and the prospect of some sort of sanction.  Book on licensing samples by Peter DiCola: ethnography of that little part of the music industry, but we need a lot more like that to sort out the role IP plays.

Property instinct literature: I see that IP w/o IP reflects intuition about credit/attribution that need not be formal IP; the fact that people reinvent something like IP when IP doesn’t work indicates it’s in sync w/people’s basic instincts.  When we see IP intruding into these spaces, we have to be careful—won’t always displace norms; formal IP may be useful in final period problem when people are leaving the community/won’t be repeat players. Case law in those contexts won’t be representative and won’t displace social norms, but it’s a special situation.

Distributive justice: seems to me that lots of what we’ve been talking about takes the form of worrying about old tradeoff b/t consumers and rightsholders.  Need for fairness leads him to talk about proportionality; details of IP rights are important b/c they’re where we carry out the job of recognizing the property instinct and the need to limit it.  Property instinct = not libertarian strong form; people’s intuitions are that property should exist but also that it should be limited.

Meta-points: care in mining the literature.  Mindful about what’s trendy. Brain studies = materialist moment. Be careful about making big jumps from study to policy conclusions.  Studies aren’t designed to tell us anything about IP policy: interpretation of those studies/parts of brain lighting up has to be careful.  We have our own group dynamic and we’re not immune from the phenomena we study.

Commentators: Mark Lemley: If fairness matters to production, that needs to be part of our incentive theory. But you can overstate the degree of what’s learned v. social. Fairness is socially constructed and defined. Many things we view as fair today would be viewed as unfair 100 years ago and vice versa.  People 100 years ago would probably take 100 years’ ago’s IP laws as largely fair, with perhaps some outliers; same today. 

People care less about money and more about credit than the law does. That’s a lever point for change in multiple different directions.  One solution: stronger attribution right, but probably not by reversing Dastar. Also suggests low-hanging fruit to reduce social costs by reducing economic control that we give to reduce deadweight loss w/o reducing incentives.

Also consider fairness to consumers. Easier to think about fairness to creators, or fairness as between early and late creators, but consumers have to think they’re getting a fair deal too. Instinctive moral reaction to 6x price increase in Epipen that kills kids; same thing seen in internet piracy cases, where personal justifications for filesharing are about price & greedy people, and some are about ability to have access to information.

Fairness maps differently to patent rules than to the rest of IP, b/c patent rules are so far removed from our instinctive reaction. 95-98% of patent lawsuits outside pharma are against independent innovators, not even alleged copiers; this doesn’t align fairness instincts. We tend to align instincts by telling implausible stories about “theft.”  Either we need to think about why rules are different and realign them, or come up with a story why this should be treated as fair.  There’s a perfectly good economic story in which it’s hard to administer an independent invention defense.

Distributive justice: I resist this even more than fairness as an economist, not b/c it’s not important but b/c economist’s instinct is to first think about expanding the pie and then separately thinking about expanding it. Literature indicates that people generally aren’t willing to think that way and are upset about expanding pie if it’s sufficiently unfair (e.g., dictator game and rejection of beneficial deal).  That said, enlarging the pie is generally a much better idea in the long run—modern tech v. equally distributed 18^th century tech.  Average person here is better off than richest people in the world in 18^th c.

IP mostly hurts rather than helps distributive justice. Increases costs of things to poor people, decreases access. Also it is very strongly oriented towards winner take all system: music, movies, tech.  Maybe we compensate for that by having outside-IP systems, but badly enforced IP might also be the best of all worlds: people who can afford to pay for music pay for music, but poor people who otherwise might not have access get access for free through “piracy.” May not be a sustainable equilibrium, but consider when infringement promotes distributive justice.

Contracting around IP/IP-free zones.  Important to consider what we should put into the legal rules and what we can rely on the non-positive law to do. People take strong IP regimes and contract down; people take weak IP regimes and contract up. It doesn’t follow that we should have strong or weak rights. It may be that baseline legal entitlement matters somewhat less if people are free to move regimes to a happier place.

Greg Mandel: Policy justifications for IP are richly contested.  Somewhat of a cultural debate; very hard to resolve, see Lemley’s discussion of “Faith-Based IP.”  Attributions sounds good to people of various backgrounds: natural rights, fairness, efficiency: a cheap right to provide in terms of social costs while providing incentives. We should think about these overdetermined policies that can mean something different to different people and may be easier to agree on.  Very hard to move the needle in people’s beliefs. Patent attys tend to believe overwhelmingly in the incentive theory, but we’re never going to give everybody that experience. His guess: many policymakers, judges lean more towards the lay side of the camp and have more disparate views about justifications than experts. 

We still have to worry about lots of distributional concerns and other norms of fairness; there’s agreement among people from different perspectives that IP at a minimum shouldn’t inhibit creativity and innovation, and should support it.

RT: case against attribution rights.  Try and write it!  I did, and I ended up concluding that I couldn’t.  Lemley’s point: Some fairness rules can’t be written into law, at least not law as the US system knows it (maybe civil law, but I don’t think they’ve obviously done a bang-up job either, and even if you did think that the differences in systems are so great that I don’t think we could project success in US).  This debate was had in family law (divorce, ok reasons for) and 1A (defamation, often too bad so sad) and we generally decided it was a better idea not to try to match fairness norms exactly because of the systematic biases in who’s making decisions and information/administration costs borne by the system. Family law’s embrace of no-fault divorce: Makes the system look bad to be constantly judging fairness w/in private relations.  I urge everyone who thinks this is worth exploring to sit down and explore it: draft what you think should be done.

McKenna: What we make of the attribution desire: is that a claim that we aren’t currently getting enough output? Is it a claim that we should give credit regardless b/c it’s right?  The practical difficulties are enormous. To what would it attach? Anything w/snippet/substantial similarity?  It guarantees repeated conflicts b/t TM and ©; attribution of things other than physical entities; every time TM law has encountered that, it’s struggled to find a meaningful answer.  It’s not clear we’re all talking about the same thing—authorship, ownership, © concept, TM concept?

Buccafusco: There’s nothing about IP that makes us welfarists, Kantians, etc.; nothing intrinsic to IP will decide that.  We still need to distinguish preferences and welfare.  You could think satisfying preferences is always conducive to welfare, but I don’t think so; we need to talk about why that might be. Anxious about idea that concerns about fairness are valuable corrective to economic accounts of IP; that people value stuff is not evidence that it is good for them in the absence of other evidence. These intuitions are likely to be weak proxies, esp. where strength of preferences can be manipulated by framing of question.  Hard to say anything useful about welfare effects—my guess is that music is good for welfare, but all 18-25-year-olds are likely to like the music they’re given; no matter what’s popular, it will be popular.  Lemley says: think instead about enlarging the pie.  But he’s not confident we can do that either.  At what point do we have “enough” movies?  Not clear as a matter of © law, or on the consumer side, even though we might think that we can judge producer side welfare.  Sometimes creating is good for people and they get pleasure for it, and that’s a value that counts. But it might be easier to say things about consumer side benefits of patent law.  Length of their lives matters.

MacCoun: working on a computational account of distributive justice. There’s a remarkable consensus about what procedural justice is. Distributive justice is quite different.  You need to define your version.  Allocation by need—there are different ways of interpreting that; same as to allocation proportional to contribution; Pareto-type rules of making no one worse off; equality (minimizing difference, maximizing joint gain), and so on.  You recognize these all. 

Sprigman: Sprigman, Buccafusco & Burns on what’s a name worth: there’s a puzzle at the heart illustrating difficulties w/attribution. We ran a photo contest w/real money. They could choose $ or less $ plus attribution. We showed they valued attribution.  Second experiment, which varied the baseline: we told them once that they had the right but website might want to buy your attribution right; once that they didn’t have the right but could buy it. 4 to 1 difference in valuation: when people had the right they wanted 4x as much as they were willing to pay to get it. Default rule really constructed the valuation. What do you take from that?  Previous experimental work showed valuation gap in transactions—authors demanded more than buyers were WTP.  Default rule of no attribution right will tend to push the parties closer together; European rule will drive them further apart.  Seller will value the right higher, reducing the number of transactions, all else being equal.  Upshot to us: well, it’s hard to know, but there will be a cost associated w/attribution: you might satisfy preferences endogenous on the rule themselves but drive down a market that will clear at a lower rate of output.  If you’re Candide, everything happens for the best, but he thinks that a preference so heavily endogenous on the legal rule should be treated differently than a less manipulable preference.

Silbey: attribution is a place where norms play effective and strong role; communities police them very well. It’s a place where shaming works well. Although I see the anxiety a lot, and the feeling of violation, private ordering has grown up around those misalignments w/law that have been very effective.

Discomfort w/fuzziness of fairness and distributive justice—but efficiency is a social construct too. It’s just dominant (among us).  That doesn’t mean we should align whatever the dominant fairness mechanism is today with our IP system.  When there is profound misalignment, for example in the piracy context—we have a rule of law problem that’s profound. We shouldn’t just accept that we have “pirates.”  Illegal aliensàundocumented immigrantsànew policies. You can imagine a reframing around infringement, a new word that might start changing the fairness construct to make it look no longer like an infringement.  Misalignment can be a canary in the coalmine about disruption of categories that are necessary to the rule of law. ,”We can’t have a system that depends on the existence of rule-breakers.  [It’s called “how many municipalities fund their systems,” which is not to say I disagree with the normative conclusion!]

Pedraza-Farina: Huge emphasis on attribution with oncofertility coalition (boundary crossing organization). How do you deal with patents?  Informant said that she wanted to be on patent to get credit, but she also didn’t want patients to think she was conflicted w/them, profiting from their illness—credit had good and bad features. Attribution is related to patents, but there’s a dark side.

Lemley: there’s attribution litigation even when the economic rights are assigned; people have even tried to litigate about the order of names on the patent, and a few have tried to get their names off patents.

Burk: If attribution is fairness, maybe we don’t try to draft amendment to copyright law, but maybe we have to try to create conditions where people can bargain into the rules that make sense for them—labor law as the solution, or employment law, or some other form of law.  Maybe © and TM and patent are all different situations. Germany has a required royalty sharing agreement with inventors.  Other forms of law.

Ben Depoorter: fabled double distortion argument: if you use law for distribution you get inadvertent effects on allocative decisions w/r/t that activity. W/IP the assessment is even more difficult b/c we understand so little about incentives.  Maybe it doesn’t matter at all, according to our research, but that’s a hurdle.  Ex ante, if you have a notion about inadvertent effects, that’s why you get so much pushback about attempts to change distribution in IP.  If we don’t know what promotes creativity, we also don’t know what distorts it.

Greg Mandel: Attribution as a concrete potential suggestion.  Push back against critiques: I hardly think it’s a panacea, but we’re starting to see potential.  Re: challenge of drafting, might be true but that’s b/c your standards are higher than those for ordinary statutory drafting.  The fact that would be highly imperfect isn’t necessarily a reason not to do it. [I think it’s a reason an attribution right codified into law is likely to turn out to be more trouble than it’s worth.]  Sprigman & Buccafusco seem to describe an endowment effect. All IP rights will do that. If our goal is to make rights transfer easer, any reduction in rights would accomplish that goal.

MacCoun: it’s 2x as large as the standard endowment effect.

Buccafusco: when people own stuff, they may value it in ways conducive to welfare/consistent w/preferences, or they may not; different sorts of people differ in their reactions.  If I as mug owner am differently reactive to endowment effect, it might be less good as a proxy for my welfare than it would be in other hands. We’re anxious that the people given these attribution rights are subject to higher levels of bias.  When you’re trying to use WTP/WTA as measure of welfare and they differ, you need a story about which one to use. Sometimes there are pretty good stories.  Our other studies: Valuation anomaly in creativity studies comes mostly from overoptimism; that’s just a bias leaving money on the table. If the higher valuation is just “this is special to me” we are more likely to say that’s not really a bias. 

Mandel: we could provide a very weak remedy to deal w/this.

Fagundes: what do we do about knowing people’s intuitions about IP?  Normative and descriptive must be sorted.  But you can still say something: (1) be aware of preferences/intuitions as a constraint in the same way you’re aware of gravity; if you aren’t paying attention it will screw up what you want to do, without having normative force. (2) proxy for empirical evidence of actual preferences, but it’s still a descriptive project that constrains normative arguments you might want to make.  My paper was called IP norms in roller derby, but it was really about property norms, not patent or TM.  We might identify different norms in each realm; what constitutes welfare in one domain might not translate into another, for example technical innovation v. artistic creation.  Keep profound differences in mind.

Peter Lee: Universities in patent licensing often reserve rights for nonprofit research, and for use in the developing world: private actor working to increase distributive justice. Do we want access to IP, or to fruits thereof? Do we want communities to have their own IP?

Mark Suchman: Robin Hood loophole: idea that rich will pay for the rule and the poor, judgment-proof, get the benefit of breaking it—redistributive role for the judgment-proof. But there is this other story about how the rules affect the legal and illegal, which is much more symbolic. The rule that creates those who can pay as legal and those who can’t pay as illegal has broader effects.  Later in life, the judgment-proof college student may be stigmatized by past history.  On one hand, I like the flexibility that gives you in crafting policy, but there is a symbolic dark side.  [Consider who gets prosecuted for other “lifestyle crimes” like walking in the street instead of on the sidewalk.] 

Lemley: if system is only working b/c we turn a blind eye to all these acts = need to change the law.

Suchman: consider disparate effects of Prohibition on certain ethnic groups.

Silbey: Tim Wu’s argument about tolerated uses—traceable nature of digital use means there’s less opportunity for obscurity, which is another reason to be concerned.

Sunder: written about composer of “The Lion Sleeps Tonight,” Solomon Linda, whose identity was erased as the music circulated.  His style was considered traditional and “born” to the public domain, even though it was unique/unusual. Implicit biases, global inequalities should affect our consideration of attribution.  See it also w/jazz and race issues around patent/who’s an inventor.

RT: Robin Hood: also social effects on rights holders of constructing it as a right: we see them conscripting intermediaries, including our universities, and arguing that technology needs to be deployed to do the enforcement work that law can’t do.  Imagined plaintiffs play a huge role in these debates: the big owners who come to Congress say they’d never sue really sympathetic plaintiffs, and largely but not entirely that’s right, but they’re not the only ones who’d use the rights they’re asking for.  We need stories to match their stories, because anecdotes end up making policy.  And we need our anecdotes to reflect reality.

McKenna: People who create are often erased in favor of corporate statements of authorship, which no one has highlighted—in many contexts we’re totally willing to have the humans erased. Intangible = special.  Barton Beebe would say: Why is it that people who put together this computer have no ability to be reflected in any way?  Maybe the TM answer is that people know their work will be merged into the corporation, but why not the same thing with ©.

Buccafusco: Hammer and nail: as IP lawyers, when we see distributional inequalities we look for IP to fix it. But there are other policies to deal w/distributional issues.

Silbey: interesting feature of contemporary culture that IP is more a feature of cultural conversation today than 20 years ago. Maybe we can’t talk about tax politically.

Burk: Labor law is decidedly less part of public discourse.

Silbey: challenge is to frame debate in way that has political purchase. Everyone can be an author is a very powerful frame.

Suchman: The other thing to remember is that we’re not just talking about economic redistribution. Dignity, free speech, identity formation—there may be other bodies of law that go after that too, but it’s harder to say there are clearer policy levers. Some of these things are distributive in some sense but very close to IP.

Silbey: you see this a lot in equality debates: does giving someone more equality give someone less? Not normally, but in IP if it’s framed as a money transfer then you get that characteristic.

Pedraza-Farina: we stop short of explaining what we mean by “access.”  Meaningful ability to engage w/it and use it in subsequent acts of creativity/productive recombination. The ability to do that requires some things outside of IP: labor law, education, knowledge infrastructures (Frischmann).

Fromer: Fair use can have this sort of effect if it’s structured right; lack of clarity can be a problem, but it is often trying to implement redistributive justice, e.g., for education. Productive access can come by putting things in the right place in the law.

Suchman: Mandatory licensing can also have some of these effects: owner has no right to exclude, but right to money.  Beyond that it’s fair use; then beyond that it’s public domain; but beyond that it’s public domain with publicly supported dissemination structures.  Policy levers are inside & outside IP.

Stanford Sociology & Psychology of IP, branding

Session 4: The sociology and psychology of brands

Discussion leaders: Jeanne Fromer: A lot of work in this area. Some is about how consumers react to branding in systematic ways.  Rule of thumb in talking to branding folks: if you pick a word as a brand, it should be 7 letters or less or 2 syllables or less.  More systematic research bears this out in some ways: recognition/recall is better; to the point that consumers shorten Chevrolet to Chevy and Coca-Cola to Coke.  Unusual spellings can help recall; names that remind people of other words like Verizon/horizon, Intel/intelligent, Viagra/vigor, vitality, aggression, Niagara. Arbitrary marks work better when a story can connect the underlying good/service. There’s no one branding choice thought to be better than others, but there are costs and benefits.  Low-consonant, low-frequency vowel names for large cars; high-consonant, high vowel frequency brand name for fast cars.  Sounds: “ah” like “frosh” sounds creamier than “frish” for ice cream.  American English doesn’t like “uh”—dull, etc.  Perhaps that’s why “With a name like Smuckers, it’s gotta be good” is the slogan.  Blackberry connotes speed, reliability, accessibility, smallness through “b” sound in part. Strawberry connotes similar features, but not also relaxation as Blackberry does, and connotes slowness rather than speed. Some of this is culturally specific, but some is not. Animals make certain noses to connote largeness or smallness.  High-backed vowels like “e” in flea connote smaller/less power than “ow” or “oo” throughout cultures.  Choosing words in particular for brands isn’t just choosing an empty vessel, but already has a lot of meaning associated with it.

Also research well beyond this.  People look at product packaging and that influences how they think about the product itself. If you put logo higher on the packaging = more favorable attitude if powerfully known brand, but if not put it lower.  Aesthetic packages are preferred over standardized packages. 

Social science literature typically doesn’t relate back to law; this is mostly marketing w/o thinking about costs of marketing choices imposed either on consumers or competitors.  (1) TM law allows propertization, in some sense, of marks that might be more advantageous than others. Our job is to think about costs/spaces where we might be allowing propertization despite formal doctrine.

Earlier work on creativity and TM law. TM bakes in some encouragement to choose certain types of marks by making it easier to get more protection if you choose arbitrary or fanciful marks, which wouldn’t necessarily align with the marketing literature.  Some would say if you’re successful with arbitrary or fanciful, you’re in the best possible shape b/c you’ll get the best strength. 

Also huge body of work on what confuses consumers. Endogeneity question: some things may be confusing because we allow them to be called confusing and then most competitors stop doing that and it gets more confusing over time.  When nonconfusing as matter of law, people get used to the practice.

Rebecca Tushnet

Jeannie Fromer did the heavy lifting about what has reached legal academics and sometimes law.  Hidden work that is proprietary.  Tasting the TM in Pepsi/Coke studies.

What we know about brands v. what we know about TMs—Deven Desai has written about the distinction and the lack thereof that has been part of the problem.  In some ways courts have created problems by conflating what businesses care about and what marketers talk about, brands, with what the law historically cared about, trademarks.  Language of psychology is often thrown around freely, as in the old Mishawaka case where the court talks about what people have been convinced to think they want, but still endorses TM owner’s control over that value.  TM information conception is TM as source indication—shortcut from mind to mind—versus brand: store and producer of social signals, saying something about the consumer and signalling specific qualities, such that interference w/ those signals even in the absence of interference w/source signification is a concern for TM law.  I previously wrote about misuse of psychological evidence in claims to justify dilution law—a cause of action in search of a theory.  Cautionary tale for © and patent, perhaps—individual points are picked up by advocates and arguably misused. 

If the story of © is, in large part, it’s not as important as you think, that may also be the story of TM where confusion claims are likely overstated, and harm from confusion is also probably overstated.  However, hope that we can get more consensus by going to empirical claims is probably futile, as Dan Kahan et al have said in many other legal contexts.  Our morals are determining our reaction to empirical claims.

Skeptic about TMs as a reward for creativity except in the very broad and perhaps unhelpful definition if anything successful is an innovation, then yes, TMs do in some sense reward innovation.  But brands generally trade on images related to things that are already popular: luxury, speed, cool.  Strategies for becoming well known exist, though you can’t necessarily predict which ones will succeed—audience is a lot of the contribution to that.  Skeptical in part b/c I was thinking about the European approach of TM as “incentive”: counting SKUs, correlating # of TM registrations with market success as evidence of successful incentive; seems to me to be a fundamental misunderstanding of causation and/or a failure to define terms.

Finally, and perhaps relatedly: sociology of registration: written about differences b/t registration and infringement regimes.  Could supplement by doing more empirical work with examiners and registration attorneys: what do they think they’re doing?

Commentators: Madhavi Sunder: We’ve talked mostly about pro producers. Luxury brands offer the opportunity to talk about users, consumers, buyers, and the work they do.  Signal distinction of buyer, communities to which she belongs, her personal identity.  Barton Beebe has discussed what TM owners do to keep consumers in their place, but it’s very hard to keep them there.  Consumers appropriate & perform luxury brands in unique/unexpected ways: $2000 boots combined w/a thrift store outfit. “Individual consumers create their own stories and they stretch their budgets”—excellent new book on Luxury Economy and IP edited by  Sunder & Haochen Sun (in which I also have a chapter).  Also Lemley & Dogan, Sonia Katyal. Brands are selling community, but they are creative products of consumers just as much as they are of corporations.  Where is the creativity in TM and branding?  Is TM creative in the literary sense or more in the patent sense of innovation based on/moved by science?  Branding as science from producer perspective, but more akin to literary creations given how consumers use them—they’re stories/performances coauthored by owner & consumer.

Sci & tech studies: the way these objects move our world for better or worse: Marlboro man has blood on his hands.  Apple’s “rip, mix, burn” helps us understand our own powers and perhaps our limitations. Native Americans internalize the slur “Redskins.” But now we see Asian-American ban seeking to register “Slants” to take back the slur. Brands don’t distinguish products, they distinguish people, as in Rochelle Dreyfuss’ 1990 article—the lingua franca of our culture.

Yesterday’s discussion of patent as brand: Today they’re not market driven but marketing driven—looking good, not doing good—image over ego incentivizes us to act. Not about how inventive your company is, but how inventive people think your company is.

Companies like Samsung are remaking themselves to focus less on tech breakthroughs and more about aesthetic allure of products and company as a whole. Turn to sensation has paid off—social and emotional connections w/ customers.  Apple became most valuable company not by creating products that are tech breakthroughs but rather by creating products w/standout design.  On design patents: can have doctrinal payoff as we think about turn to design patents and their desperate need for reform.  Iconic design as melding simplicity, utility, ease of mass production.  “Wicked problem” of design thinking is insistence on lack of rigid boundaries b/t industrial engineering, marketing, design—that can actually help us approach design patents doctrinally differently.  TM and © try to push functional aspects outside protection; skeptical eye towards hybrids in functionality/creativity should lead us to be more skeptical in design patent as well.

Mark McKenna: Research in this area is about brands and not TMs, and those aren’t the same. They’re not asking the same questions we are.  There is a line of literature that’s about confusion, but if you read those studies, they’re actually about association—whether consumers link one thing to another thing. They’re not about source confusion. There’s often an agenda in those articles to redefine the legal terms to match the marketing terms, and that’s important to recognize.  One reason that diving into this literature is important: if you read it through the lens of the doctrine, you think it’s not about the right questions. If you read doctrine through the lens of these studies, modern TM law makes a lot more sense descriptively. Plaintiffs use the tools they have to do what they want. 

Where the literature is: the two deepest areas are done by social psychologists and marketing dep’ts; they are similar but don’t talk to each other, don’t cite each other, don’t publish in the same journals. These are primarily about the ways consumers react to various branding strategies: brand extensions, development techniques; studies are done for managerial purpose. Consumers’ interaction w/favorite brands resembles their interaction w/religious icons.  fMRI research shows similar brain activation.  [But cf. doubts about fMRI research.]  Opportunity for researching how people form communities; they form around brands, as anthropologists like Rosemary Coombe understand.

Holistic branding: a lot of ads for tobacco got banned in Europe; Marlboro started paying bar owners to use the color red and a Western motif b/c they had pretty good evidence that reminded people of the Marlboro man. 

Literature suggests at consumers rarely draw bad conclusions about the original goods from thinking goods are associated, unless the goods are highly related.  But the literature does show some kind of “harm”—the impact on future brand development/narrative of the brand. More about market preemption or derivative work rights.  Also interesting work on interference w/decisionmaking, including the problem of over-choice in the market. Notable how little of that is about TM; if we were serious about reducing search costs, TM is a terrible tool.  In some cases the research suggests that some of the things we incentivize/protect through IP contribute to the problem of over-choice—attempts to differentiate in the market based on fashion/similar motives. Adding additional layers of IP may make that problem worse.  [This is an example of “good from individual company perspective, bad for social welfare”—differentiation from other products in the same category across multiple features may make it harder for consumers to compare and to make decisions, but that can be a private benefit if it means they stick to you.]

What research we don’t have: not very much about the way companies think about TM as legal entities as compared to other kinds of IP.  “Why do companies patent” v. “why do companies create patentable subject matter”?  Why do companies choose TM/branding instead of other strategies? The research is so heavily about consumer reaction.  Proprietary research might be one of those places.

Mark Lemley: Role of functionality in TM law—maybe we should be defining many many more aspects of a brand as functional than we are. If not, maybe there’s something wrong w/our current idea of functionality and we need to accept our protection of things w/functional characteristics and give up on the idea of excluding functions.  Another thought: perhaps we ought to be very skeptical of the idea of inherent distinctiveness. Just as we decided not to assume anything is inherently distinctive in product design, maybe we should do that for word marks as well if there is a bunch of subliminal signaling drawing people in that isn’t related in the first instance to that source until secondary meaning develops.

RT’s claim that empirical evidence gets ignored and filtered through morality: most profoundly depressing thing he’s heard in 2016, the year of Trump [and profoundly related to that!]. Resists the notion it’s true, shouldn’t we give up the game? Moral argument won’t be related to good policy outcomes.  [I don’t think that’s inevitable—Wal-Mart is a case packed with statements that have the form of factual claims, but what’s driving it is a commitment about competition. Facts are important because we shouldn’t be wrong, but we have to do the moral argument coextensive with that.]

Rob MacCoun: Lots of psych research is associational in nature: exposed to X, think about Y.  Bear in mind these associations are asymmetrical. A evokes B does not tell you how well B evokes A.  [I wrote about this in Gone in 60 Milliseconds too.]  RT’s work: if you get into a cab in NYC, “Kennedy” is not ambiguous despite the existence of Differ w/RT b/c there is dilution if you’re not in the context of being in a cab, every new “Kennedy” object you encounter makes you less likely to think of the airport. [My point is that mostly we do have the context.] Psych is a catalog of phenomena, not a grand theory.  You shouldn’t start w/any one and build a theory of TM or patent from it. Psychologists are just as guilty of that—we think we see immediate relevance but it can be misleading b/c of all the other things that impact these issues. Design studies specifically to answer TM questions.

McKenna: Q is whether empirical claims are really driving the bus here. TM is shot through w/claims that it’s building a world based on how consumers really behave, but that’s not true. What MacCoun counsels against is exactly what TM does. We’re making lots of choices about when we care about the empirical facts, and when certain facts should override others. Behoove us to be clear about when we’re normative and when we’re empirical.  Wal-Mart and Dastar intermingle—tendency to make normative arguments in empirical-sounding terms.

Jessica Silbey: reproductive choice/Carhart—same thing, Justice Kennedy picked an empirical claim about how women may regret abortion.  That was from a social movement around abortion. Then social movement countered it, creating empirical studies/recording of facts rejecting that statement and the meaning behind the statement. Now, you get a total reversal in the SCt about the “regret” narrative and the role of law in changing whether “regret” happens. What would that look like in TM.  If the issue is the normative environment, what would a movement look like to capture the freedom of expression or competition? 

Emotional attachment people have to marks as names. My research suggests people talk about brands as their “babies.”  When the fight becomes about one’s emotional relationship to one’s company’s name rather than consumer confusion; those cases are deeply unsolvable.  Becomes a crapshoot.  In other areas like family law or defamation, the courts are willing to say, I know you’re hurt, but too bad.  Why are they not willing to do that in a TM case?

Sprigman: Maybe they will do that in dilution, in the 1A context. 

Irreducible minimum of confusion as a key concept.  When I try to explain how much confusion is necessary for liability, students ask whether they’re confused or just making associations b/c people have a rage to make associations.  80% of people aren’t confused.  If we disallow the D from using it’s mark, we may right a certain percentage of confusion, but in the process we deprive a bunch of other people of a tool they’ve learned how to use, including the associations they’ve made w/the D’s mark.  Built in to TM law must be the idea that this isn’t a big deal, this content is readily replaceable and consumers will heal. What Fromer said suggests that this won’t be the case always; the second best may be quite a bit worse in some product categories. Consumers won’t heal fully.  If that’s the case, implication is that if we believe the linguistic story about how some marks are more appropriate to some product categories than other marks, we have to do both sides of the equation.

Lemley: one area where we do this, for precisely this reason, is genericide.

Andrew Torrance: Trade secrets (Coca-Cola, KFC) being used as TM; © used as patent for software; TM used as patents (Traffix); patents used as © in the design patent context. Bleeding of rights into rights. Porous boundaries.

Fromer: Unclear what we mean by “distinctiveness.”  Indicative of source?  That’s just indicating an association, but if we care about certain costs, that might not be enough.  Another way to think about it: what associations does it trigger in people’s brains? If it lights up a lot of connections w/the underlying product/service, maybe we should worry about giving exclusive rights in that claimed mark.  The less it’s associated w/other things, the less we might want to care about granting rights. Current categories aren’t fine-grained enough to deal with that. Psycho-linguistic literature might be helpful here.

Sunder: Heightened standard for product design; two functionality doctrines; idea that labeling products can avoid confusion—TM and trade dress doctrine can be powerful tools if used properly.  Design patent is where companies w/broad conception of “brand” are turning there b/c there isn’t a functionality constraint in any real sense.  Design patent can cover ease of use. We should expand our conversation to design patent.  [Though the problem is that no principle of psychology or sociology presently would limit design patent rights, precisely b/c the doctrine says that functionality in the TM sense doesn’t matter.]

Lisa Ouellette: Linguistic functionality.  Matter of degree: Viagra is better than control over “erectile dysfunction”—we shouldn’t get rid of tools pushing companies towards one end of the spectrum.

Pedraza-Farina: There is research on brand communities, in terms of McKenna’s point.  An interesting way to think about them.  Are those of particular concern?  Maybe they have ability to manipulate the brand, maybe they are the ones who could be affected by dilution (or couldn’t be).

McKenna: Stimulus generalization isn’t limited to words.  Many marketing folks have been trying to count stimulus generalization as confusion. Study about whether people generalize from product packaging characteristics, stripped of any TMs: clear plastic in a particular shape.  The kinds of things that consumers thought when they saw another package of candy in the same sort of package: oh, that’s also refreshing and minty; chewy like gum; taste good—they generalize all sorts of product attributes based on packaging.  If we question this about words, this is a generalizable problem through TM. 

In thinking about number confused, consider longstanding debate around whether TM is for protecting consumers or not.  Courts have internalized harm to consumer idea—even 20% confusion is harm to that particular consumer.  Difficult to hang on to notion of consumer focus if we continue on this road, esp. with addition of design patent. More focus on using these things as interchangeable IP tools=less focus on consumer.

David Fagundes: Managing TMs to avoid associations w/outlier communities: Harley-Davidson was anxious about associations w/retirees—took away the edge. Plausible that brands are managed to avoid certain communities, but not necessarily as you think. 

Mark Suchman: though the politics of overtly opposing that would be just as bad as for opposing other groups.

Dan Burk: Traditional knowledge/preserving traditional community; fan communities that coalesce around copyrighted properties; knowledge communities in patent.  There may be something there—do we want the TM owner to be a kind of fiduciary and have obligations to preserve that group?

Stephanie Bair: interested in the ability and conscious effort by brands and branders to bypass conscious rational decisionmaking and evoke these visceral responses. Tension b/t that and traditional efficiency rationales of reducing search costs and trying to get brand owners to invest in quality products.

McKenna: so much depends on what you identify as characteristics of the product. Laura Bradford has nice paper on emotional valence of brands. Should we differentiate that from other characteristics of the brand?

MacCoun: lots of research on subliminal advertising. We know that it’s real but ephemeral.  Dominant theory of persuasion is elaboration model that distinguishes b/t peripheral cues and central route to persuasion. Those unconscious associations are easy to create and also easy to knock out by the competitor—only good until the next unconscious source comes along with its own cue.

McKenna: not so much unconscious as emotional appeal/System 2.

Tim Holbrook: who controls the market?  Inclusion and exclusion: using the power of the state to do that. That broader context gives a different angle on the problem.

Burk: If we’re protecting visceral/emotional reactions in TM, there’s a strong strain of 1A cases saying the 1A is about deliberate, thoughtful, rational reactions. My sense is that one of the friction points in the law is TM and the 1A. Something interesting there about state intervention into expression. If one is really about visceral reactions, what relation to 1A values?

Sunder: Lemley & Buccafusco are writing about functionality screens. Science of TMs: one question is that we could push towards calling everything functional—there’s a science to how we read the red colored sole. Couldn’t we take that into © as well?

Lemley: branding claims: not just a move away from consumers, but a move away from unfair competition: more property, “if value then right” approach.  He’s skeptical of that move; not clear to him that it’s socially desirable thing for gov’t intervention to encourage. Morally neutral (v. inventions, expression). Also not clear we need legal incentive given other incentives to engage in this type of branding. To the extent it’s valuable to encourage a religious-like reaction in people, perhaps making them happier, that is collaborative and not unidirectional. A law facilitating that still shouldn’t be “I made it and I own it” even to the extent that © and patent are b/c that value is collaboratively created. People feel proprietary interest in a brand they’ve helped to create. Readers do also connect to books, but even more true in TM.

McKenna: One immediate difficulty in imagining a world that only protects rational decisionmaking is that literature demonstrates it’s impossible to disentangle. The nonrational stuff conveys info about tangible product characteristics in interesting ways. Lemley’s point: you might recognize that it’s fine for you to build that with consumers. That isn’t deceptive and can’t be separated from other stuff. But we should recognize the same when other people use the mark nondeceptively.  The state wouldn’t get involved w/o deception; if we allow TM owner to create meaning, everyone else should be allowed to do so too.  TM’s got a bunch better at this in the 1A context over the past decade.

Silbey: people talk about how many TM registrations they’ve collected w/pride.  They say collection is important for the business model: TM was the most valuable asset.  Can correlate value to number and breadth of marks.  Hard to square w/doctrine of TMs as distinct signifiers.  Courts say there are lots of options, but TM owners feel special connection w/theirs.  TM as limitless v. TMs in practice has a social life/actual practice of collecting marks.

McKenna: Stacey Dogan argues that we need competing counternarratives about the harms of protection—speech, competition. It won’t be enough to say “you’re making these rights too broad.” That maps pretty well descriptively to the places where TM has swung back in the past few decades—increasing bite of functionality, Wal-Mart.  Other things courts seem to get is boundary questions—when this starts to look like ©, that bothers them; they want to say there’s a reason for having different IP regimes.

Sociology and Psychology of IP, Session 3: What can we learn from IP-free zones?

Discussion leaders: Kate Darling: attribution as something that people want rather than money in “negative spaces.” They know they can monetize their reputations.  Systems of self-governance often differ from those of formal law. 

Attribution preference is not just about fairness/ego. We also see in comparatively rational actor commercial setting that attribution has a lot of value.  It’s not just social norms; market mechanisms/responses as in fashion, cocktails, Nollywood, porn.  In porn specifically, my work indicates that companies create info goods, but create a secondary market they can profit from. They link the two through branding.  Similar to other ways of monetizing reputation.

Flexibility of self-regulation: Norm systems get criticized a bunch, but beautifully efficient at adapting.  Fagundes’ follow-up to study on roller derby names—social norms changed over four years since the original study.  You interpreted this as a breakdown, but I’m not sure this was a market failure from an IP perspective. People were surprisingly willing to just completely overhaul the social norms of what’s fair in a very short time period.  Very powerful illustration of adaptability of norm systems to what’s best for the community.

Dave Fagundes: (1) IP unavailable: recipies.  (2) Apparatus of enforcing IP may be available in theory but not in practice.  (3) May be practically available but unused b/c it doesn’t give people what they want.  (1) and (3) sound different but arise for the same reasons/desires.

Hard to disentangle social norms (altruism) from market norms (complete self-interest). Leave a restaurant w/o paying = arrested.  Leave a dinner party w/ paying = rude!  Which of these dominates in IP free zones?  Usually we think it’s noneconomic social norms—tattoo artists, chefs, etc. find people using creative production w/o permission, act as if honor is offended. But that’s not to him obviously the answer b/c in many instances their creative production is tied up w/livelihood: defending professional turf of comedy, fashion, etc.

These systems track poorly onto the term “IP.”  Most of the systems he considered are closer to TM/brand management.  In many of these settings, including magic tricks, the systems are motivated by a desire to protect creative work and to preserve a brand, intersecting TM/©.  Thinks it’s puzzling that invention seems absent—domain of patent doesn’t seem represented in the IP-free systems he’s looked at.  [Eric von Hippel’s work?]  IP systems are very hostile to formal legal enforcement. If you threaten legal action, you lose the sympathy you usually get when you are copied.  True in Order w/o Law, too.  In some of these subcultures, people claim coolness and lawyers are not cool; you should take care of things w/in community.  Or people think the stakes are too low: disproportionality. But that’s only true where it’s a real extracurricular.

Norms are difficult to scale.  Law scales by using the state; IP-free systems scale in 2 ways: (1) keeping things really simple, like “don’t copy w/o attribution” or “don’t copy.”  Or (2) norm entrepreneur or norm yeoman, doing hard work of administration that manages a registry. Derby is his only example. These are fragile. The second somebody decides they don’t want to do this for free, it can fall apart.

Not really in the shadow of law. They operate largely independently of law. You can TM a derby name, but this is ignored. Consistent w/Ellickson’s thesis that legal centralism is wrong. But most people think they’re consistent w/law. People in derby would tell him “of course my [derby] name is copyrighted,” and he’d sometimes suggest they were wrong and they’d reply, “I think I know about my own name.” 

These systems are driven largely by moral intuitions.  First in time = first in right; don’t steal my stuff; give attribution.  The factors they use in determining similarity in derby names look a lot like Polaroid factors, even though no conscious attempt to imitate law.  

W/exception of central organizing structure, how do we know they’re systems at all? If driven by moral intuitions, why isn’t it just similar behavior cropping up in similar circumstances. Variation: maybe this is the development of a system that reinforces behavior consistent w/our moral intuitions.

[Now I really want to think about norm violators v. norm entrepreneurs.]

Commentators: Andrew Torrance: overgrazing leads to ostracization—there’s a dark side to IP-free zones. At least IP has defined penalties; in the Wild West you’re not sure what they will be. Anything that can be done in secret is potentially IP-free: people and companies do a lot in secret.  Especially processes that lead to information.  Things done in other countries.  Law has been lurching to freeing up vast areas of IP (patent)—methods, diagnoses, software.  Industry recognizes there’s more freedom now to do stuff w/o worrying about being prosecuted. 

Biotech: certain things ought to be patentable that aren’t, such as products of human physiology.  PTO will give you a patent on that, but they almost never win—doesn’t know of a single case where the patent has been enforced when the process takes place in the human body. There’s no doctrinal reason, but repugnance might explain it. Human embryonic stem cells, same thing.  Section 33 of AIA: formalizes Weldon Amendment, don’t allow patenting of anything connected to the human body: no claim may be directed to or encompassing a human organism. People hadn’t been patenting in that area typically; maybe that wasn’t commercially valuable or it was repugnant, but now it’s formally an IP free zone. It’s a natural experiment. 

Jim Bessen: Software: rewriting code—you don’t pay attention to IP where you’re starting from the position of not knowing ultimate value, at least in a context where software is trade secret in fact, not shared on discs. Most software is not prepackaged; most either contract programming or self-development by companies. Great deal of need for tailored, customized software responding to idiosyncratic needs. That’s a problem for/reason why IP is practically not important for a programmer in active development.  FOSS: not entirely IP-free, in that it relies on © and contracts, but there’s a large literature on why people do it. Sometimes it’s reputational, learning, job-seeking.  But also needs: modular software/APIs.  Non-IP activities taking place even though there are also areas where IP is critical. Law needs to incorporate policies to balance these issues.

Aaron Perzanowski: Did we need a unifying theory of case studies for our book on IP-negative spaces, or do we need to provide policy implications? We didn’t think our work needed that at this stage.  We have 20-25 different case studies to point to in this space, and there are certainly trends that emerge, such as attribution.  But so far what he sees is communities that have more differences than similarities.  What kind of creativity does a community value? What does a community care about in addition to/instead of creativity? Who counts as a creator? What counts as creativity?  [What about the possibility of “family resemblances” in the category theory/Wittgensteinian sense?]  What are their histories, how do they change over time, and in response to what?  When you see the range, there’s value in doing more of this work, in part because maybe it builds to some bigger theory and maybe some policy recommendations, but these projects also have value in themselves.  We need people to do more of this work.

Where do otherwise stable norm systems break down? Where are there points of tension? Sometimes it’s commercial/noncommercial. Sometimes it’s insiders/outsiders.  We’ve seen some relatively high profile litigation in the graffiti world and the tattoo world. These are really rare, but when they happen, they get attention. Has concerns about what happens when law enters the picture for groups that have been blissfully unaware of/uninterested in the law. Law creates categories/changes the way people think. 

Abishek Nagaraj: Good job of studying IP free zones v. struggles.  IP free zones are not only for weirdos.  150 years ago, the globe was an IP free zone. Petra Moser has studied actual physical inventions as outcomes, not patents.  She shows that levels of innovation weren’t affected that much, but the direction of innovation was. Tech itself may allow for secrecy—chemicals that are hard to reverse engineer v. machines that are easy.  IP-free zones lead to tech that encodes secrecy. 

Another promising area: open source, digital innovation.  Mostly b/c of the way that computers work.  Get to track over time how activities are happening.  Free inbuilt measurement and logging devices of great help to researchers.

Having said that, there are lots of contexts where it is really hard. Chefs, tattoo artists.  Harder when we don’t have IP-full and IP-free subzones, so we can’t compare easily; also the cultural products aren’t centrally organized—hard to figure out what’s going on without painstaking interview/ethnographic work.

Lemley: It is interesting to think about the fact that these cultures do seem to have been put in a marginalized category. Which comes first?  Is this not IP b/c we think it’s not important, or not important b/c it’s not an IP space?  Depending on how we think about this, there are a bunch of things that fit in here that we don’t think of as insular communities—an atom that’s mostly empty space, as Andrew Torrance says. One key issue is whether we include trade secrets in the category “IP,” b/c a lot of valuable economic activity thrives in part b/c of secrecy.  It may well be that it’s really a social norm doing most of the work, with a legal backstop the same way there’s a legal backstop for tattoo artists. Financial industry, until quite recently, fit into this model, and even then, everyone in the financial industry hates patents.

Ways in which we create IP free zones by backing off the scope of patentable subject matter. Suggests possibilities for research that don’t raise Nagaraj’s problems. We can observe an exogenous legal shock to the system and see what happens to market structure, investment, creativity to the extent that it can be measured by something other than patents (which we should be doing anyway).

Sprigman: Label we’re applying: No-IP zones isn’t right for most of them. They fall into a variety of categories.  We called it negative space b/c we didn’t want to lay down a rule about how much IP ought to be present.  Fashion is not no-IP, but rather one potentially very important form of IP—©—wasn’t there, though TM was. This is often true. It’s important to understanding what the scholarship’s about, b/c though we can’t give you an answer about what the optimal level is (though neither can neoclassical economics), it’s very good at giving an answer about what legal, institutional, and social arrangements lead to innovation. Europe: incredibly broad sweep of IP rights in fashion.  US: design patents can cover some things at the margins, but practical difficulties are great for most firms w/o long-lasting things like iconic handbags. Look at their performance: big growth in NY, eclipsed Paris; but Milan is doing very well. None of this is about no-IP zone, but it’s higher versus lower.  What types of innovation are going on in each place? Are they sensitive to the differences in IP?

Financial services has a whole branch of innovation in new financial instruments, where patents and trade secrets are written out b/c you have to disclose and you have to make a market, which often requires many firms. Market power takes over from IP, which isn’t a lovely story either.  An atomized financial sector might need more IP to get new financial instruments, which is not a normative claim.  People give it a normative cast b/c these are communities that innovate w/o IP.  In these settings, relatively low levels of IP have led to innovation, and the Q is in what direction.  What you like in terms of your comedy = what you like in terms of your regulation. It’s entirely normative.

Buccafusco: We can open up understanding of who’s in the communities who might matter. It’s not just creators.  Who counts as a consumer and understands themself as part of the community?  Consumers objected to recipe copying; chefs didn’t want public discussion of the matter.

Rob MacCoun: Illegal drug markets—this is an interesting moment b/c there’s a lot of innovation in marijuana, not just in brands and strains but other things. Prohibition made it impossible to protect IP; now we’re seeing the choices they make once law is a (partial) option.  Change in players, not just a change in law. Old hippies who dominated the market are being run out by young MBAs.

Dan Burk: Distinction between common governance spaces and IP-low/negative spaces. These are two different phenomena which sometimes occur together.  If you’re looking for variations, make sure to distinguish.  Consider tax advantage patents—prior to State Street they were covered by state secrets; IRS had a rule that if you had a confidentiality rule in your tax shelter they’d audit it; then tax patents disappeared when excluded by AIA. Might be another place to look for exogenous shocks.

Lisa Ouellette: Another distinction: encouragement to innovators can be through tax credits, grants, etc. not just IP. Benefits of these studies help us understand how different kinds of economic incentives interact w/noneconomic incentives.

RT: Norm entrepreneurs v. norm violators: agree w/Aaron Perzanowski that we need more study of the latter in different contexts, and not just of P2P filesharers but people who want to push the boundaries of commercialization—Axanar Star Trek fan film creators who collected a lot of money in crowdfunding, for example, or people who set up a Patreon to support their fan art or an Etsy store to sell their Doctor Who related soap or scarves.  Ongoing norm shifts in terms of “pulling to publish” in largely female fan communities, or other ways of moving in between fan and professional publishing, where languages of feminism are often employed in favor of and against various forms of commercialization. 

Institutions in IP free zones: Fagundes talks about derby and fragility of norm-based governance; can do things to institutionalize certain norms and engage w/formal law, sometimes to preserve territory: American Library Association; Electronic Frontier Foundation. Organization for Transformative Works.  OTW: Among other things, we are an ISP hosting 2 million noncommercial fanworks, over 770,000 registered users and receives over 115 million page views per week. Can’t stop rogue librarians or rogue fans, whatever that might mean, but can promote norms, self-understanding (e.g., spread of the language of “transformative work” in fandom). 

Non-IP effects of having an IP-low space.  Interesting things happening in fandom around tagging that intersect w/discourses about feminism, racism, trigger warnings, and categorization theory/folksonomies.  Terms of service and interface design, for example, contribute to that: the “Choose Not To Warn” option on a fanwork, which was deliberately designed in, makes a difference in how people approach warnings.  This isn’t directly related to IP, but the freedom to experiment in content (genre, length, format) produced by fandom’s emphasis on noncommerciality and fair use may have made us more attentive to the responsibility of telling people what they’ll get if they read a particular fanwork.  Wonder what non-IP effects exist of being low-IP in other spaces.  [This seems similar to Sprigman’s point that comedy will be different under different regimes, but it’s not even exactly about the content that gets produced but about how the content fits into its social context.]

Peter Lee: Innovation w/o IP, exclusivity w/o IP—those two things aren’t the same in all cases. Sometimes people aren’t interested in exclusivity and maybe want attribution.  The potential rub: we think of the public domain as the opposite of excludability, but some non-IP things are tacit knowledge and inherently excludable.

Pedraza-Farina: longitudinal studies as really useful. Social norms as innovation promotion: most case studies have a flavor of “norms are sufficient, we don’t need IP.” One thing we may be forgetting is the dark side of social norms.  Can be anti-innovative.

McKenna: Some of this is formal law v. norms, but some is about directness. Fashion example: there’s tons of TM in the industry. Absence of © has pushed courts in the direction of creating post-sale confusion.  Some other circumstances, it’s not TM directly but TM/brands serving as adequate economic protection even though not directly applying to the subject matter.

Silbey: Order w/o Law: the “order” part was really important.  Societies function through norms. The critical distinction is when you want the features of a legal system that a norm based system can’t provide: transparency, equal access, accountability. If we studied the destruction of a system through an entrepreneur/violator—if the way it’s going is looking more like the virtuous features of a rule of law system, we might start thinking that certain legal mechanisms are better at this point than they were before.  These norm-based communities are often very homogeneous.  Studies suggest that when they become large & heterogeneous, the norms break down and the need for accountability, transparency, and equal access comes in.

Mark Suchman: we tend to call this the study of deviance. Competence enhancing innovation reinforces the structure—existing customer bases, distribution channels, etc.; competence destroying innovation makes some of the things that leading firms are good at no longer relevant. Can imagine similar things in norm based communities.  Interesting to see what they resist as competence destroying.

Fagundes: one question is why would people create in the absence of IP; another is why they’d be motivated to create an extra system of rules when IP already exists. Sometimes it’s when there’s chaos; sometimes when it’s too expensive; sometimes law doesn’t give them what they want, like attribution; sometimes law doesn’t cover the subject matter, but he thinks that’s rare.

Are social norms the ex ante reason people opt in?  People are motivated to create; law doesn’t protect them; they therefore create norms. 

These systems don’t have fair use, copyrightability limits [speak for yourself!]—I’m ultimately agnostic about whether these formal systems are good.  Bottom-up doesn’t mean best or better.

Sprigman: sometimes tell students that his job is to raise up a crop of people to protect the strong against the weak.  Law has lawyers built into it, which creates all kinds of access problems.  Debate in fashion: one side observes that there’s no copyright and that means that young and new designers are disadvantaged by freedom to copy. Other side says that the industry is open to young and new in part b/c cost of entry doesn’t include hiring a lawyer. Yes, the weak will sometimes be preyed upon by the strong, but in a more concentrated industry the weak aren’t going to be there to be preyed on. 

Holbrook: In formal IP we always worry about public notice and linedrawing; we should think about this here as well. There’s also concern about enforcement mechanisms, which can be pernicious and harmful. Structure of community itself screams for concerns about exclusion on grounds we’d find troubling—think of GamerGate. Norms can be normatively bad.

Bessen: Don’t assume these are small communities; FOSS is very big. Sophisticated means of managing communities exist. 

Lemley: Jennifer Rothman has done interesting work on risks of custom. We could get a lot by studying what IP regimes people opt out of, b/c that may tell us if there is too little—or too much—IP in their area.

Paul Goldstein: A world w/o IP would be a world w/alternative forms of protection, such as contract, trade secret (a contractual version in some manifestations).  IP might be a default, but Linux/CC uses a space to create w/very limited protections.  Patents used to forestall the patenting of others.  Realms w/in IP such as fair use, private use, where there is an unpoliced use. Intrusion of law gets the same kind of attention such as tattoo artists’ suits, as when ASCAP sues the Girl Scouts for singing songs around the campfire.  Has the US fashion industry taken advantage of absence of protection here to poach French and German design?  Cross-border traffic may tell us a lot about creativity inside and outside.

Sunder: think about childhood as an IP-free space; educational spaces. How do we police overstepping of IP into sacred spaces of childhood, family?  No community/culture is hermetically sealed; we allow normative policing inside, but when someone outside the community appropriates we tend to lawyer up.  Native American tribes are turning to TM, copyright, even design patent.  IP as currency of “modernity.” 

Buccafusco: Some people thought that these spaces couldn’t teach us anything about music, film, the art that “matters.”  Can we change minds?  How?  What are the next generation of projects to convince the unconvinced?

Sprigman: Food and fashion are important forms of creativity.  Serious point: germs of more work are there. Kate Darling writes about online adult entertainment industry, making the point that response to uncontrolled piracy was to change the product mix to something that was experience based and more difficult to pirate: rise of camgirls. Music industry: the rebirth of the live show. Movie industry has reinvested in theater industry as a consumption good.  Music industry also reinvigorated the singles market, which turns out to be how consumers want to buy music; subscription model is rising in music and movies. Enormous diversification of consumption opportunities that was provoked by piracy, resulting in more people w/different willingness to pay being served. There’s more to say about that, but these low IP industries did it and high IP industries can do that too?

Silbey: pushing back on data that’s being created by consumption patterns that’s not accessible to us: Amazon, Netflix, Spotify—that could help us understand what’s being created, why and how.

Fagundes: 10-15 years, skepticism has emerged about core innovation quid pro quo story. This is a huge piece of that skepticism: if there are 7 different places where there’s innovation w/o IP, that’s part of showing that the canonical story has huge holes.  [“I refute it thus!”]

Goldstein: “Copyright industries” will respond by calling these all marginal activities.  What they have less success brushing off is the observation about the changes in mainstream industries—music, film, publishing to a lesser extent.  They don’t want to talk about that.  Kastenmeier said: going forward, when anyone comes to this subcommittee and asks for an extension in IP, they have to do something equivalent to an environmental impact statement saying that the industry needs the right given to continue producing/produce at a higher level. First hearings after that—semiconductor proposal—was strained effort to explain need for incentives. Not a single hearing after that addressed the issue. You can’t do business in DC in those terms w/IP, b/c the basic premise that you need exclusive rights to generate creativity was an unmanageable task. So we have interesting studies about “marginal” creative activities; huge shifts in mainstream media; fascinating to see attempt to map current trends onto what copyright law specifies as conditions for protection. There will be increasing mismatch b/t what law needs to do and what industry is going off to do on its own.  [DRM?]  Taking “marginal” methodologies and applying them to the mainstream would provide interesting results.

Lemley: Thank god for semiconductor protection! Imagine what the industry would have looked like w/o that act.

Goldstein: only 2 cases b/c the law is working so well [everyone laughs]

Silbey: Major industries don’t give us access.  It was a major enterprise to get embedded in Hollywood. Pharmacos are notoriously secretive. Music is easier, but many of us would love to do that if we could.  Confidential interviews—but that’s subject to criticism for lack of transparency. 

RT: The industries do talk about this: they talk about the “value gap.”

Sprigman: The studies say that we have equilibria, not an optimum, and these equilibria, even if fragile, seem to be consistent w/lots of innovation. There’s tons of stuff produced in fashion. That’s correlated w/ a rights-free environment (at the core).  Protection’s not as complete as it was in music either—the question is what’s the set of protections necessary to have a robust, innovative community.  If that’s the question, the industry has to explain why what we see represents underinvestment. [But they say it represents underreward.]  We have high quality and high output in music; need to explain why this “Silver Age” looks bad.