Harvard Law Webinar on Teaching First-Generation Students in Law School, March 10, 12 pm EST

Please join us for the next entry in Harvard's series on teaching law:

Teaching First-Generation Students in Law School, Friday, March 10, 12 pm EST

First-generation students face unique challenges. Anthony Abraham Jack’s The Privileged Poor recently highlighted many of the invisible-to-professors barriers such students, especially first-generation students of color, face in college. What about when those students go to law school? Three professors—Angela Littwin, Etienne Toussaint, and Rory Van Loo—will share invaluable insights and recommendations to make “the invisible curriculum” both explicit and navigable to all students.

Panelist bios:

Angela Littwin, Ronald D. Krist Professor in Law at the University of Texas at Austin School of Law, is a leading scholar of economic justice issues facing individual consumers. She studies bankruptcy, consumer, and commercial law from an empirical perspective. Her current research includes studying the attitudes towards bankruptcy among consumers being sued by debt collectors, bankruptcy local legal culture, as well as the relationship between consumer credit and domestic violence (DV). She has published in journals such as the Texas Law Review, University of Pennsylvania Law Review, California Law Review, and American Bankruptcy Law Journal. She has recently published articles about racial disparities in bankruptcy chapter use, the Consumer Financial Protection Bureau's complaints process and supervision program as well as on how consumer bankruptcy attorneys adapted to the Bankruptcy Abuse Prevention and Consumer Protection Act. Professor Littwin has been a principal investigator for a number of empirical projects.

Etienne Toussaint is an Assistant Professor of Law at the University of South Carolina School of Law where he teaches Contracts, Business Associations, Secured Transactions, and related seminar courses. His scholarship sits at the intersection of law, history, political economy, and critical theory, with a focus on the socioeconomic challenges facing historically marginalized urban communities across the United States. He has been nationally recognized for his teaching, scholarship, and service. For example, in 2022, he was awarded the Junior Great Teacher Award by the Society of American Law Teachers. Professor Toussaint began his legal career as a project finance associate with Norton Rose Fulbright US LLP. Then, he served as a Law & Policy Fellow with the Poverty & Race Research Action Council in Washington, D.C. before transitioning into law teaching. As a student at Harvard Law School, Toussaint served as Vice-President of the Board of Student Advisers. Born and raised in the South Bronx, New York, Professor Toussaint is the son of immigrants from the island of Dominica in the West Indies, the proud husband of Ebony A. Toussaint, Ph.D., and the father of their three amazing sons.

Rory Van Loo teaches Contracts, Business Organization, Consumer Law, and Financial Regulation at Boston University, where he is involved with the First-Generation Professionals student group. He is a graduate of Harvard Law School, and as a student he served as a Teaching Assistant in the Negotiation Workshop. He later returned to Harvard Law School as a Lecturer to teach Dispute Systems Design and Advanced Negotiation: Multiparty Negotiation, Group Decision Making, and Special Dispute Management Processes. After law school, he worked as a management consultant at McKinsey & Co. and was on the team that helped set up the Consumer Financial Protection Bureau.

Please register at this link.

free speech protects allegations of patent infringement that aren't objectively baseless

Lite-Netics, LLC v. Nu Tsai Capital LLC, 2023-1146, 2023 WL 2054370, --- F.4th ---- (Fed. Cir. Feb. 17, 2023)

Reversing the district court’s preliminary injunction, the Federal Circuit held that notices to stores that sold Nu Tsai’s holiday string lights alleging patent infringement were not objectively baseless and thus could not be made in bad faith for purposes of avoiding patent-law conflict preemption. Lite-Netics therefore could not be enjoined, using the tortious interference/defamation torts, from suggesting that HBL is a patent infringer, that HBL has copied Lite-Netics’s lights, or that HBL customers might be sued.

Note the framing that might be coming soon to a case near you: “Lite-Netics appeals the district court’s preliminary injunction against its patent-related speech. We hold that the district court abused its discretion in issuing the preliminary injunction because the applicable speech-protective legal standards are not met.” When I started this gig, the framing was about protecting the patent system from collateral challenge with state-law claims. But we are in new days now.

“This requirement of a showing of bad faith as prerequisite to applying state tort law to speech about infringement rests partly on First Amendment principles.” I will just note that bad faith is usually not required when commercial speech is false, and the chilling effect is usually not a big deal for commercial speech. It’s really patent preemption doing the work, but it’s interesting to see the First Amendment getting recruited to help out.

Substantively: “Because there was an objectively reasonable basis for many of Lite-Netics’s infringement allegations, the district court abused its discretion in finding that Lite-Netics could not have ‘realistically expect[ed] success on the merits’ and, therefore, acted in bad faith.”

What is a "rescue" dog? Jury will have to decide

PetConnect Rescue, Inc. v. Salinas, 2023 WL 2026546, No. 20-CV-00527-RSH-DEB (S.D. Cal. Feb. 15, 2023)

Defendants allegedly sold non-rescue dogs as rescue dogs. Plaintiffs PetConnect, Lucky Pup, and Second Chance Dog Rescue are three nonprofit animal rescue organizations that claim defendants infringed on their names and marks to disguise the sale of non-rescue dogs and bolster defendants’ reputations. (There are factual disputes over whether defendants sold non-rescue dogs. One individual defendant described them as “rescues” because they were “donated”—i.e., defendant PetConnect did not pay for these puppies because they were “unsellable, or something to that effect.”)

Plaintiff Gonzalez is an individual consumer alleging that she was defrauded into purchasing a non-rescue puppy from defendants. Gonzalez testified that an employee of Town Puppies told her that Charlie was a rescue, and the information displayed on Charlie’s cage (known as a “cage card”) stated that he was from “Pet Connect Rescue.” Although Gonzalez and her family were “looking into a rescue dog,” she acknowledged she was not looking to purchase to a dog that specifically came from PetConnect or any other rescue organization. Gonzalez’s declaration represented that seeing the name “Pet Connect Rescue” made her “feel good about the purchase, as the name sounded like a reputable rescue organization,” and the name was “part of what made [her] decide to make this purchase.”

I’m not going to discuss the trademark claims—for obvious reasons, summary judgment was denied on infringement and granted on federal dilution for want of fame.

Lanham Act false advertising: Gonzalez lacked statutory standing.

As to “commercial advertising and promotion,” plaintiffs identified three types of uses: (1) the cage cards displayed at defendants’ retail pet stores; (2) verbal representations made by pet store employees that the puppies sold were from “Pet Connect Rescue”; and (3) defendant Pet Connect’s website.

The defendants who used cage cards had signs prominently displayed on the puppy cages that stated, “Rescue Org: Pet Connect,” and that retail stores displayed the name “Pet Connect Rescue,” along with the breed and price, on cages for puppies obtained from Defendant Pet Connect. There was a triable issue as to whether they were commercial speech; defendants argued that they lacked an economic moivation, but plaintiffs argued that the entire purpose of displaying the cage cards with the name “Pet Connect Rescue” was to sell non-rescue dogs for a profit under the guise of a legitimate rescue name. The trier of fact would have to resolve this; there was no dispute that the cage cards were in advertising format and about the puppies for sale. “To the extent Plaintiffs argue that the labeling of the puppies during transport—before the puppies were made available to consumers at the pet store—constitutes false advertising, the Court is unpersuaded. The Court fails to see how consumers could be influenced to buy the puppies based on labeling that they did not see or were not meant to see.”

Even if they were commercial speech, there was also a triable issue as to whether the cage cards were disseminated sufficiently to the relevant purchasing public. [For an individual animal, what more were they supposed to do? The sufficient dissemination standard should probably not be assessed in relation to the overall pet market, or not even national TV advertising would reach more than a fraction of the audience.]

Likewise, although “oral statements can constitute commercial advertising or promotion,” there was a factual dispute as to whether the specific statements made by defendants’ employees constituted “commercial speech” or was sufficiently disseminated to the relevant purchasing public.

Defendant Pet Connect’s website: Plaintiffs argued that the following statements were false advertising:

(1) Pet Connect Rescue Inc. is a 501(c)3 non-profit organization ... operating an open admission animal rescue for care, assistance for other pet organizations, and pet homing partners which ultimately find homes for all pets. ... Our focus is always finding a positive homing effort for all pets. We provide solutions that make a long-lasting difference.

(2) How do we obtain our Pets

We work with many sources throughout the U.S.A. Starting from families with accidental litters, unexpected life style changes, unwanted pets, strays, breed defects, shelters, surrenders, other rescue groups, and seized pets are only a small part of how we obtain our pets. If you or your organization needs help to find a permanent home for a pet then please contact us so we can connect you with one of our Pet Homing Partners. Working with each other as a team makes the difference.

These statements were allegedly false because (1) defendant Pet Connect existed solely to provide puppies for retail sale; (2) people never directly adopted animals from defendant Pet Connect; (3) defendant Pet Connect never took physical possession of any animals; and (4) each puppy from defendant Pet Connect had a breeder and broker source

The relevant defendants conceded (2) and (3), but they disputed (1) and (4). Although there was evidence of invoices and discounts in relation to puppies, defendants argued that these were solely “shipping” costs and not for the puppies themselves. This created a genuine issue of material fact on falsity as to defendants involved with the website.

California UCL: As to violating pet-store-specific laws against selling non-rescue pets, there was a genuine issue of material fact. The court was willing to impose vicarious liability on certain non-pet store defendants, where there was ample evidence that they worked with pet store defendants in obtaining and transporting puppies to sell at retail stores in California. A reasonable jury could find that this constitutes “substantial assistance or encouragement.” And vicarious liability could also attach to their employers for acts within the scope of employment.

CLRA: Gonzalez alleged that defendants “misrepresented to consumers in California, including [Gonzalez], that Defendants are selling ‘rescue puppies’ when in fact they are selling puppies from puppy mills.” The misrepresentation at issue was not whether the dogs were legally obtained and sold, but whether they were sourced from “puppy mills or mass breeding operations” that Gonzalez would not have supported through her purchase. There was a triable issue on that.

Common-law fraudulent deceit: Along with the issues above, there were factual disputes as to whether Gonzalez justifiably relied on the alleged misrepresentation. Some defendants argued that Gonzalez could not have reasonably expected her dog to be “rescue” given that she paid $2,000 for an eight-week old “designer breed Puggle” at a retail pet store. Gonzalez admitted in her deposition that she believed the price was “a little high,” but she also testified that the employee explained the price and, in a subsequent declaration, stated she felt good about the purchase because her dog appeared to be from a reputable rescue. Further, Gonzalez testified that she was interested in a small “rescue” dog, not specifically for a Puggle. That was enough for a genuine dispute of material fact as to whether—given the dog’s breed, price, age, and location of sale—there was justifiable reliance.

using an ITU to get non-Amazon platforms to take down competitors

Jones v. Hollywood Unlocked, Inc., No.: 2:21-cv-07929-MEMF(PVCx), 2022 WL 18674459 (C.D. Cal. Nov. 22, 2022)

This is a super messy case with a lot going on; I’m going to blog about it mainly to highlight a new thing you can apparently do with a trademark application, which is use it on non-Amazon platforms to gain advantages.

Jones is “a social media influencer, media personality, and celebrity gossip blogger.” Defendant Johnson is “a media personality and the founder, editor-in-chief, and CEO of the celebrity gossip website Hollywood Unlocked.” The Bigo defendants operate a social network and video platform, Bigo Live. There’s also a law firm involved (the Pilson defendants).

Jones, performing under the name “Tae the Mahne Tea,” allegedly rose to popularity through his celebrity gossip broadcast, The Mahne Tea, which is streamed on Bigo Live. He alleged that he had nearly two million followers becoming “one of [Bigo Live’s] most popular artists,” and he monetized this status.

The Hollywood Unlocked Defendants allegedly made various defamatory statements about Jones and filed an application with the PTO for the “Mahne Tea” mark. The court says the PTO “granted” the application on June 14, 2021, but that’s the filing date—the ITU application was published for opposition in April 2022, allowed June 2022, and an extension of time to file a statement of use has been granted as of this writing.

Using the pending trademark application, in June 2021, Johnson submitted a complaint to Twitter alleging that Jones violated the platform’s trademark policy by using The Mahne Tea on his Twitter page, and Twitter suspended Jones’s account. The Hollywood Unlocked Defendants allegedly informed Jones that they would surrender the Mark and drop the Twitter complaint in exchange for $100,000. Jones refused and the account remains suspended. Similar shenanigans allegedly occurred on Bigo, and Jones was allegedly subsequently suspended from Bigo Live for three days.

Skipping a bunch of stuff, the big picture is that the US just doesn’t have a good system for abuse of IP rights.

Tortious interference: Jones did allege the existence of a business relationship between the plaintiff and a third-party, with the prospect of a future economic benefit to the plaintiff. He also alleged that the Hollywood Unlocked defendants had knowledge of his relationship with Bigo. And he alleged that those defendants’ intentional acts disrupted Jones’s relationship with his Bigo Live followers. But he failed to sufficiently allege economic harm—he needed to allege whether he planned to or ordinarily would have held a Bigo Live broadcast on those three days, or otherwise generated revenue.

Presumably he could fix this with more pleading, but he also didn’t plead an independently wrongful act, as required for tortious interference. The complaint linked the following allegations to the tortious interference: (1) trademark infringement and related extortion, and (2) defamation per se and trade libel/business disparagement.

But (see below) Jones didn’t plead trademark infringement [would fraud on the PTO have worked? I kind of think it ought to have done so]. And the court couldn’t at present determine whether (2) was wrongful given disputes that required discovery, so they couldn’t serve as the wrongful acts. [I don’t get this—procedurally, doesn’t that mean the court should wait to resolve this as well?]

Fraud [not, apparently, pled as fraud on the PTO but argued that way]: “Fraud in procuring a mark occurs when an applicant knowingly makes false, material representations of fact in connection with an application.” “[T]he burden of proving that a party fraudulently procured a trademark registration is heavy.” [Though of course that’s for an issued registration; nonetheless this really would be suited for a petition to cancel—the problem Jones faces is that while we’re waiting for the statement of use, if it ever comes, there doesn’t seem to be anything he can do at the PTO.]

The court notes that there’s no presumption of validity, recognizing that there is in fact no registration, but then quotes the standard for filing use-based registrations, highlighting courts’ general lack of knowledge about registration. The court held that Jones didn’t plead a false representation regarding a material fact. He alleged that defendants “falsely claimed [Hollywood Unlocked] owned and used the [Mark]” and that this representation was “made in writing and communicated over the internet to the USPTO.”

But the complaint contains no allegations indicating that the Hollywood Unlocked Defendants did not use the Mark. Thus, a statement in the trademark application disclosing that the Hollywood Unlocked Defendants did use the Mark is not necessarily false. Indeed, if anything, the Hollywood Unlocked Defendants are simply junior users of the Mark.

This is … bad. It was an ITU! There was no such statement! The problem is not about defendants’ use, which was not required—the problem is the separate required statement saying that, to the best of their knowledge, nobody else has a superior right. (“[T]o the best of the verifier’s knowledge and belief, no other person has the right to use such mark in commerce either in the identical form thereof or in such near resemblance thereto as to be likely, when used on or in connection with the goods of such other person, to cause confusion, or to cause mistake, or to deceive ….”) That’s what was allegedly false, especially when they immediately used the filed application to target him on Twitter and Bigo, clearly contemplating that the marks couldn’t coexist without confusion.

Anyway, the trademark infringement claim wasn’t plausibly pleaded, because Jones didn’t have statutory standing (an argument the court raised on its own motion, which I’m not sure is right for non-Article III standing but ok).

Although Jones was within the zone of interests of the Lanham Act by virtue of his alleged ownership of an unregistered mark, he didn’t allege proximate cause. And this gets weird: “While Jones may have alleged that he is personally engaged in interstate commerce, the Complaint fails to show that the Hollywood Unlocked Defendants, in registering the Mark, were similarly engaged in interstate commerce.” “Use in commerce” “requires that the defendant ‘use ... a famous or distinctive mark to sell goods [or services] other than those produced or authorized by the mark’s owner.’” Alleging that the Hollywood Unlocked defendants, “citing their pending trademark application,” had Jones suspended from Twitter and Bigo Live was insufficient to allege use of the mark in the course of selling any goods or services.

[According to this dismissal, Jones didn't plead that defendants used the mark--so no infringement--but he also didn't plead that they didn't use the mark--so no fraud.]

Even without standing, Jones failed to state a claim for false association or false advertising. He failed to allege a “valid, protectable trademark.” He didn’t allege where his putative mark fell on the Abercrombie spectrum, merely alleging that it “was distinctive and used to identify [Jones] to his followers.” “Such conclusory allegations are insufficient to survive a motion to dismiss.” [OK, but isn’t inherent distinctiveness a question of law? Also, the complaint actually contains a lot more about his use to identify himself to his followers, which I haven’t discussed and which is ordinarily accepted as trademark use—I think this opinion is good evidence that trademark law has a lot of concepts that aren’t transparent to non-TM lawyers.]

He also didn’t state a claim for false advertising, because he didn’t allege any “false statements about any product owned or produced by Jones.” [This at least could have been maybe plausible under a Dastar/Sybersound analysis.]

ambiguous front label cured by clear back label for fish oil

Foster v. Whole Foods Market Group, Inc., No. 22-cv-01240 (ERK) (RML), 2023 WL 1766167 (E.D.N.Y. Feb. 3, 2023)

Foster alleged that the front label of WFM’s branded Fish Oil softgel product was false and deceptive because it suggests to a reasonable consumer that the Product contains 1000mg of two types of Omega-3s—EPA and DHA—per capsule, when in fact it contains only 300mg of Omega-3s per capsule.

front of bottle: "Omega-3s EPA & DHA/1000mg Per Serving/From Small Cold-Water Fish/Molecularly Distilled"

The court found he failed to state a claim.

Foster argued that “1000mg Per Serving” was false and misleading because it appears underneath “Omega-3s EPA and & DHA,” while it actually contains 1000mg of Fish Oil, 180mg of EPA, and 120mg of DHA.

back label disclosing DHA and EPA amounts

The court found that the front label was arguably ambiguous, but any ambiguity was readily resolved by the back label. It wouldn’t be unreasonable for a consumer to read the “1000mg Per Serving” statement on the front label as qualifying the “Omega-3s EPA & DPA” statement above it, and then to read the two additional statements below as independent qualities of the product. In a footnote, the court stated that, if “1000mg Per Serving” appeared below “Fish Oil” (but above “Omega-3s EPA & DHA”), it would not have been ambiguous—it seems to me that the availability of an easy fix should bear on the misleadingness inquiry.

However, “clarification can defeat [a] claim” for deceptive packaging if a front label contains an ambiguous representation, although it can’t correct an unambiguously misleading representation. Here, there was ambiguity. [I gotta admit, I have no idea what is going on with “ambiguously misleading” and “unambiguously misleading”—it doesn’t seem to be the same as falsity by necessary implication, so I guess we just have a new ad hoc standard now.] This was distinguishable from the leading Second Circuit case, Mantikas, where the front label “falsely impl[ied] that the grain content is entirely or at least predominantly whole grain,” and that the back label did not provide any information as to the actual “ratio of whole grain to white flour.”

On the spectrum, this was ambiguous, not misleading. [How do you know, other than by measuring consumer reaction? What is the difference between an ambiguous claim that is misinterpreted by a substantial number of reasonable consumers and one that is misleading?]

 

"commercial advertising or promotion" requires more than a call and an email

Navatar Group, Inc. v. DealCloud, Inc., 2023 WL 1797266, No. 21-cv-1255 (SHS) (S.D.N.Y. Feb. 7, 2023)

Navatar sued for state and federal false advertising, as well as commercial defamation, injurious falsehoods, unfair competition. The court dismissed the Lanham Act claim and declined to exercise subject matter jurisdiction over the remaining claims.

Navatar provides cloud-based customer relations management software services to global financial customers. DealCloud allegedly repeatedly engaged in false advertising campaigns against Navatar, with claims such as “Navatar is running into some trouble”; “Navatar charges ‘3 times as much’ as DealCloud”; “Navatar is in jeopardy of going bankrupt”; and “Navatar closed 2 deals in 2020 to DealCloud’s 200 deals.”

The standard for identifying “commercial advertising or promotion” under §43(a)(1)(B) requires “(1) commercial speech; ... (2) for the purpose of influencing consumers to buy defendant’s goods or services; and (3) although representations less formal than those made as part of a classic advertising campaign may suffice, they must be disseminated sufficiently to the relevant purchasing public.” The “touchstone” is “that the contested representations are part of an organized campaign to penetrate the relevant market. Proof of widespread dissemination within the relevant industry is a normal concomitant of meeting this requirement. Thus, businesses harmed by isolated disparaging statements do not have redress under the Lanham Act; they must seek redress under state-law causes of action.”

The complaint didn’t clear that bar. In its original complaint, Navatar had listed ten former and current clients who had been contacted by DealCloud and the court had orally advised, “[a]mong these 10, you must have specifics: So and so received the following statement on or about X date and they are false for the following reasons. That would really firm up what you’re missing [in the original complaint].”

But other than adding in statements from a declaration by a Navatar principal about an email to one customer, “Navatar provided just one additional example of alleged false advertising by DealCloud, a phone call between an unnamed DealCloud employee and an unnamed customer that occurred in April of 2021, after this action had commenced and after the Court granted defendant’s motion to dismiss the original complaint.”

This amounted to “two discrete instances of DealCloud making false or misleading statements, and both appear to have been directed at just one customer each.” That wasn’t enough, given that

Navatar claims to have close to 100,000 potential users.

anti-spam laws are not general false advertising laws

Chen v. Sur La Table, Inc., --- F.Supp.3d ----, 2023 WL 1818137 (W.D. Wash. Feb. 8, 2023)

Chen alleged that Sur La Table violated the Washington Commercial Electronic Mail Act (CEMA) and the Washington Consumer Protection Act (CPA) by transmitting at least 22 commercial emails with purportedly false or misleading information in their subject lines. The subject lines allegedly falsely or misleadingly indicated that the person could receive a specified percentage-off discount on their entire purchase or on one item of their choosing, e.g.: “xx% Off Your Purchase,” “xx% Off Your Order,” or “xx% Off One Item.”

"See what's new--and take 20% off your order!"

In fact, Chen alleged, approximately 25% of its products—including its most popular products—were excluded from the advertised sale.

CEMA: CEMA prohibits the sending of commercial electronic mail messages that either:

(a)   Uses a third party’s internet domain name without permission of the third party, or otherwise misrepresents or obscures any information in identifying the point of origin or the transmission path of a commercial electronic mail message; or (b) Contains false or misleading information in the subject line.

The court found that, based on text, legislative history, caselaw, and general anti-spam principles, “false or misleading information” meant false or misleading information about the commercial nature of the email, with the legislative history using examples like “hi There!”, “Information Request” and “Your Business Records.”

Since the CPA claim was based upon a violation of CEMA, that was dismissed too, with leave to amend.

 

Competitors seem to have been right about Regal Assets

 False advertising cases focusing on fake/undisclosed affiliate review sites accused Regal Assets of misconduct. As the Daily Beast reports, Regal's founder, and a whole lot of customer investments, have now disappeared.

fake sponsored reviews are false even if review content is opinion

Federal Trade Comm’n v. Roomster Corp., --- F.Supp.3d ----, 2023 WL 1438718, No. 22 Civ. 7389 (CM) (S.D.N.Y. Feb. 1, 2023)

The FTC, joined by California, Colorado, Florida, Illinois, Massachusetts, and New York, sued Roomster, an internet-based room and roommate finder platform, and related individuals.  Defendants allegedly falsely represented that properties listed on the Roomster platform are real, available, and verified, and that they created or purchased thousands of fake positive reviews to support these representations and placed fake rental listings on the Internet to drive traffic to their platform. Here, the court refused to dismiss the complaint or to grant a protective order.

Roomster … purports to be an intermediary between individuals who are seeking rentals, sublets, and roommates. Defendants advertise that their platform, available through their website and corresponding mobile applications, allows users to post and search listings for living arrangements, including rental properties, room rentals, sublets, and roommate requests. 

However, Plaintiffs claim that users are more likely to get scammed on Defendants’ platform than to get an apartment. They explain that many of the listings on the Defendants’ platform are fake, and the platform is rife with fraudsters who have taken hundreds and thousands of dollars from its often-low-income users. In spite of this widespread fraud, they aver that Defendants did not and do not effectively verify listings or ensure that their listings are real or authentic. Instead, the Defendants post listings on their Roomster platform immediately upon request, as long as the street address associated with the listing is recognized by the platform. For example, during an undercover investigation, Defendants immediately accepted and published a fake listing where the address was a U.S. Postal Office commercial facility, not an apartment. That listing has remained active for several months.

Nonetheless, defendants claim that Roomster has “authentic” listings and that the Roomster Defendants “mak[e] sure the Roomster profiles and the listings on the site are complete, accurate, updated and yes...authentic.” Until they received notice of this investigation, defendants claimed to have “millions of verified listings” in a “safe community with real members worldwide.”

In addition, they allegedly paid and continue to pay for thousands of fake reviews of the Roomster platform to entice individuals to use the platform and sign up for paid membership. Defendants allegedly purchased over 20,000 reviews from one defendant who settled out, encouraging him to submit fake reviews to app stores in ways calculated to evade the stores’ processes for detecting fake or fraudulent reviews. This allegedly deceives potential users about the significant proportion of fake listings, and obscures real, negative reviews about the widespread fraudulent listings on the platform.

Defendants also, either directly or through their affiliates, allegedly placed ads for fake listings on various websites, including on Craigslist. These listings direct consumers to the app, and and encourage them to sign up and pay a fee to obtain information necessary to secure the rental—only to discover that the listing does not exist.

The FTC alleged Section 5 violations through (1) representing that certain reviews of the Roomster platform were truthful reviews by actual users and (2) representing that the listings are verified, authentic, or available. The states alleged violations of their respective UDAP laws.

First, the FTC acknowledged that it couldn’t get monetary relief after AMG. Any money would go to the states only.

Second, the court rejected defendants’ argument that their allegedly improper conduct ceased in 2018, giving the FTC no standing in court. Section 13(b) of the FTCA allows the FTC to file suit when it “has reason to believe” a defendant “is violating, or is about to violate, any provision of law enforced by the [FTC].” The complaint plausibly alleged ongoing violations. The remaining defendants argued that they had no knowledge that the settling defendant’s reviews might be inauthentic; that wasn’t an issue on which the court could take judicial notice, but it could take judicial notice of the fact that he admitted to his participation in the scheme alleged by the FTC and has been enjoined from engaging in this type of behavior.

Defendants’ conduct strongly suggests they were well aware that the reviews might not generated by genuine users of the platform. Martinez was able to produce thousands of 5-star reviews for Defendants. At one point, Defendants asked Martinez to post 800 reviews of their platform to the app stores, specifying he should only post 15 or 20 in a day. That Martinez had the ability to summon hundreds of five-star reviews of their platform at a moment’s notice, and with total control over when and how many would be posted at any one time, strongly suggests to a reasonable reader that the reviews were not being created by genuine, individual users of the platform.

But had defendants ceased their conduct? They argued that prior statements that the platform verifies or authenticates users had been removed, and the generation of fake reviews ended because of the injunction against their former collaborator. No way. While the Shire case said that the FTC couldn’t sue under §13 five years after Shire ceased the alleged conduct, and when it no longer owned the drug that its challenged conduct related to, Roomster’s platform continues to operate, and plaintifs plausibly alleged that statements about authentication, fake app store reviews, and fake listings on websites like Craigslist were necessary to defendants’ business. “Where the conduct in Shire had ceased five years prior to the FTC seeking the injunctive relief, here Defendants claim only that their improper verification claims were removed in early 2020—after they received notice of the ongoing FTC investigation.” But plaintiffs alleged that “in numerous instances and on various locations on their website,” defendants continue to represent that the listings are authentic. This couldn’t be resolved on a motion to dismiss, where the FTC has not conceded that violations were not ongoing, as it did in Shire. And the FTC didn’t allege only that Roomster only purchased reviews from that one defendant, only that they “often” did so. Other associates remained so that channel of misconduct was not “defunct or reformed.”

Separately, the FTC plausibly alleged that it had “reason to believe” that defendants were about to commit another violation. The question is whether there is a “realistic likelihood of recurrence,” which can consider “factors such as the degree of scienter involved; the isolated or persistent nature of past fraudulent acts; the defendants’ appreciation of wrongdoing; and the defendants’ opportunities to commit future violations.” Here, there was a realistic likelihood of recurrence alleged given defendants’ “pattern of willful and deliberate behavior over the course of several years, as well as the continued ownership and control of Roomster by the two named individual Defendants who run the company,” despite their knowledge of the investigation. For example, one named defendant personally “instructed [ ] Martinez to produce ‘lots of 5 star IOS app reviews’ ” and directed Martinez “to spread out the reviews to be ‘constant and random.’ ” The complaint also quoted emails in which defendants specified when and where precise numbers of allegedly fake reviews should be posted. Their continued ordering of reviews from Martinez even after notice of the investigation indicated that they didn’t appreciate the seriousness of the allegations against them. “And Defendants demonstrated a lack of candor with FTC investigators, claiming that they do not pay for reviews of the Roomster platform while they purchased 20,000 from Martinez alone.”

“Defendants clearly have opportunities to restart whatever conduct they may have stopped; they simply need to update their website to assert new false authentication claims.” And there’d be no bar to getting fake reviews from someone other than Martinez. “Recurring violations are hardly implausible where, as here, defendants retain control of the company and the capabilities allegedly used to violate the FTC Act.” The court noted defendants’ “strong pecuniary interest in restarting the alleged misconduct, as their business has generated tens of millions of dollars from users signing up for their paid subscription, allegedly enticed by the deceptive or misleading conduct described. … [W]ithout the renewed promises of authentication, positive reviews, and Craigslist referrals consumers are less likely to pay for subscriptions to the platform.”

And finally, “Defendants cannot moot the case or destroy the FTC’s standing by offering a stipulation to a permanent injunction if any illegal conduct is ongoing. The FTC is not obliged to accept their offer and it does not lose standing merely because it chooses to decline Defendants’ offer, genuine or not.” Defendants didn’t like that the FTC responded to AMG by partnering with the states to seek relief. That wasn’t improper.

Defendants next argued that Section 13(b) of the FTC Act is unconstitutional as an improper delegation of executive power to an independent agency whose commissioners cannot be removed at will by the president. It wasn’t. “[E]ven where Congress has legislated unconstitutional removal protections, an agency can still wield enforcement authority that was lawfully delegated.”

For now, the court also exercised supplemental jurisdiction over the state claims. The allegedly fraudulent reviews qualified as deceptive acts under the relevant UDAP laws, as did falsely advertising rental listings as “verified,” “authentic,” and “available.” The defendants didn’t argue about the latter, so the court only addressed fake reviews.

Defendants argued that plaintiffs didn’t allege injury, because §230 protected them against claims about scam losses. But, “while free users may see possible listings, users must sign up for a paid subscription in order to actually contact the listing creator about the rental. Plaintiffs plausibly allege consumers suffered financial harm when they paid for access to the Roomster platform based on the misleading or deceptive reviews.”

Defendants also argued that it would be unreasonable for consumers to rely on subjective user-supplied reviews when deciding whether they should purchase a paid Roomster account, so there were no UDAP violations. But the complaint alleged that reasonable consumers would be deceived “because the reviews appear to be, but are not, truthful representations made by actual users of the Roomster platform, and because they obscure authentic negative reviews.” Even if individual user review content comprised subjective opinions that can’t be actionable misrepresentations, that was irrelevant:

Here, the allegation is that the reviews are fraudulent because they are not opinions at all—they are fake, written by someone who was not a real customer and so who was in no position to offer an opinion. Misrepresentations that are false because they are not real—they were made up and paid for—can never by definition be “puffery.”

These reviews were allegedly not just actual reviews with undisclosed compensation for them, but “allegedly manufactured wholesale” (also not disclosed). Alleged large-scale manipulation of reviews that created a false and misleading impression of the number of positive reviews could be false advertising. “Even if Defendants had just paid real consumers to use and review the platform, as they claim, such conduct would still plausibly qualify as misleading or deceptive acts” because of the failure to disclose a financial relationship (citing a number of Lanham Act cases).

At a bare minimum, it would have been reasonable for consumers to assume that the existence of thousands of reviews of the Roomster platform meant that there are or had been thousands of actual users. And the presence of thousands of users on the platform would reasonably make a consumer more inclined to think she could find a rental on the platform and sign up for Roomster’s paid services (of course, if she knew that these reviews had been generated by the owners of the platform, she might be less inclined to sign up for these services).

In particular, New York sufficiently pled violations of its consumer protection laws. NY’s laws are territorial, prohibiting deceptive acts or false advertising conduct “in this state.” A deceptive transaction in New York will fall within the territorial reach of the law as long as “some part of the underlying transaction ... occurs in New York State.” Here, Roomster allegedly transacts business and has its principal place of business in New York. Roomster’s owners and co-founders, who also serve as Roomster’s CEO and CTO, reside in the district and transact business here. Plaintiffs plausibly alleged that “at least some part of the development, approval, implementation, and financing of the alleged misconduct happened, and is happening, in New York.”

Defendants argued that NY remedies for nationwide consumers would violate the Dormant Commerce Clause; this challenge was premature.

CDA § 230 didn’t immunize defendants from liability for their own misconduct, though the court acknowledged that they couldn’t be held liable for allegedly fake listings on their platform, nor the content of the reviews provided by their users. Defendants could be held liable for their own allegedly false claims that listings are “verified and authentic,” and they also allegedly arranged for third parties to create and post fake reviews about their website. “Defendants are alleged to have been involved in hiring the creators of the reviews, paying them to create the reviews …, and specifically instructing how and when the reviews should be posted. Similarly, insofar as Plaintiffs’ deception claims capture fake listings on other websites that direct consumers to the Roomster platform, such as Craigslist, Defendants are responsible as the creators [of] that unlawful content.” [There’s a covert agency argument buried in there, which I think is correct.]

The parties were unable to agree on the terms of a protective order for designating material as confidential.  Of note:

That certainly does not bother me. This court does not believe in protective orders, since parties abuse them by designating material that is manifestly not “trade secret” as “confidential” – which generally prevents the public from seeing things that will never be kept confidential on a summary judgment motion or at trial, but that are simply embarrassing or worse. …

So if the parties are unable to agree on the terms of a protective order, none will be issued, because this court will not impose one unilaterally. And if parties refuse to turn over documents unless on the ground that they are confidential but not subject to a protective order, the court will entertain a motion by the party requesting the documents for an order precluding the uncooperative party from making arguments that might be supported by the withheld documents, or an order deeming certain facts to be admitted by the non-producing party.

WIPIP: In Memoriam and Fair Use

A Few Words for a Lost Friend: Tribute to Dmitry Karshtedt (Bob Brauneis, Mark Lemley, Jake Sherkow)

Closing Plenary Session: Fair use

Robert Brauneis, Copyright Transactions in the Shadow of Fair Use

Suppose a work does not infringe another work because and only because it’s been ruled a fair use. Does the status of that work or copy limited subsequent uses of it or transactions about it? Yes, in some circumstances, and looking at that tells us some things about them.

Fair uses tend to divide into buckets: justified by new work; justified by project. Cites me and others on what I call content transformativeness and purpose transformativeness.

New work: Derivative work or embedding work: Cambpell v. Acuff Rose, or quotation of Patton’s Principles in Patton on Leadership. Use is justified by context of being placed in new work. Corrolary: fair use can be determined when new work is fixed in final form; determination won’t change after that; work can be performed or reporduced as a whole in any quantity, but reproduction or performance of part might remove the justifying context and be unfair: example—just the riff of 2 Live Crew’s Pretty Woman. The parodic context has to remain for the work to remain a fair use. Could not use excerpt of hook from 2 Live Crew for ad w/o permission of Acuff-Rose. Example 2: Axelrod book on General Patton quotes Williamson on Patton: fair use b/c it uses in the same way as any scholar does—but selling items just printed with that quote wouldn’t be fair.

Fair use justified by project: multiple copies for classroom use, time shifting vidos, visual search thumbnails, full text search engine, intermediate copying for reverse engineering.

Final determination of fair use is not possible when a copy is made. If the project is fine, it’s fine to repeat the project with additional works.  

Fair use and first sale: in tension? If you see fair use as a statutory license to use the old work under conditions that justify the use, then some of those conditions are about use of copy.  Does that mean that a videotape made for private timeshifting purposes can’t be sold or given to someone else, despite §109 first sale? Or does it mean that a videotape for time-shifting was lawfully made under this title?

Current thinking: neither. Adding a transaction changes the project so we have to assess whether this new project is fair use. If I videotape a show, watch it, then sell on eBay, hard to see how that project as a whole is fair use, particularly w/erasable, usable materials.

Google Books: Never displays full text in search results—fair use. HathiTrust uses those copies to provide print-disabled patrons w/accessible copies—requires different analysis, but also a fair use.

Not suggesting that “work” and “project” are exhaustive categories. Cariou v. Prince is work plus embodiment. Prince’s large, one of a kind originals didn’t usurp Cariou’s market. That should constrain use and licensing of the works if market separation into strata by value matters. Cariou is now selling prints from Yes Rasta for $1100 and Prince is selling exhibition posters for under $700—thinks it’s much less likely to be fair use.

Jeanne Fromer: Related question: when can you take a fair use decision and extrapolate from it.

A: comes up in Grokster concurrences w/battling characterizations of Sony 30 years later.

Q: Is Prince selling a work or a brand? That might make a difference to whether they compete.

Ochoa: Warhol may upset your argument, since there were suggestions that this was a content/work-based case, some uses might be fair and others might not be. Relatively separate in case law until now.

A: Cariou already does that and provides background for Warhol. Dct considered it an all new work. Licensed for use in magazines and don’t care; still fair use. Cariou is the case that might justify hybridizing.

Q: Third hypo: the videotape was made for time shifting years ago and is now a historical artifact. Is that still part of the original project?

Jim Gibson: consider 103 interactions too. Does 2 Live Crew have some © interest in the riff even if the rest that made it fair use/©able has disappeared?

Lunney: points out that Campbell was just a remand.

Wendy Gordon: Compare to negotiated direct license to do a cover (thus no requirement of consent to create a separate protectable derivative work)—does licensee of the cover version need permission of both?

Rosenblatt: how we think about that might be different in music sampling than other derivative works. But how does this map on interim copying? If it’s only inside the computer, and you’re making a fair use, then the interim copying is fair use. Or: the interim copy is something no one ever sees, so it’s fair no matter what; it’s the later thing that’s an infringement or not. Does your approach give us information about that?

A: if you make the interim copy for a particular purpose, but do something after that, think about the project as a whole. [This will also have statute of limitations implications.]

Buccafusco: why not answer it as a matter of copying in fact? I didn’t copy the P’s work, I copied my own. If © attaches to works, why wouldn’t that be true?

A: copying a derivative work is also copying the underlying work in most of © law [except damages].

Silbey: statute refers to fair use of a work; perhaps every use has to be on its own terms.

A: but if creating Pretty Woman is a fair use, it should be done on a work level (at least for uses as a whole) w/o having to think about use on a more granular level; otherwise we get silliness like trying to decide whether you can distribute the recording in Florida versus New York versus California.

Mehtab Khan, Recalibrating Fair Use

How to think about mass copying to create image and text datasets (facial recognition, art generators, ChatGPT), including beyond content generation.

How do we address the data collection stages of dataset development, and how should we assess the public interest?

Stages of dataset development: problem formulation (is this an image recognition dataset?); data collection (does this involve any injury? It’s where the copying takes place); data annotation (subjective decisions: creating meanings attached to data); model implementation.

Data annotation might be where transformative purpose is assessed.

Trends: wide allowance for fair use. But fair use could be a corrective measure where the datasets are used to create harmful tech or exacerbate bias. Need a framework that takes process of creation into account in the first place before assessing purpose. Consider whether the tool is purely private or available to public for end user good purposes. Intermediaries determine nature of use and amount used, and (?) effect on the market. How should we consider users’ commercial benefit (using art on sweatshirts) versus intermediaries’?

Glynn Lunney, Transforming Fair Use

Why don’t courts see that everything is fair use?

Goldsmith’s argument—even if creating them was fair use, licensing them for magazines wasn’t fair use. But 2 Live Crew sold CDs as did Orbison. 2d Circuit didn’t pay much attention to this, relying on the idea that if this is fair use, movies made from novels would be fair and overbroad fair use guts the derivative work right. That also seems a red herring to him. We need to figure out what limits, if any, exist on the derivative work right just as much as we need to figure out what limits, if any, exist on fair use. Nothing in © Act says what the relative size of those two slices must be, and 106 says subject to 107-etc. while 107 says “notwithstanding.” That suggests a relative hierarchy: fair use is the one that comes out ahead.

Why is novel-to-film the touchstone? Why provide that right? Political economy, historical path dependence—movie industry was new and easy to oppress. But here are rationales: (1) there will be only one film b/c there’s a natural monopoly/high fixed costs; (2) to ensure the book gets written; (3) to increase the book/movie producer surplus combined (closest to truth).

Is there only going to be one move? Abie’s Irish Rose/The Cohens and the Kellys. There was an authorized film version of both! In digital era, we can get multiple high quality versions of a character all the time; Elementary, BBC Sherlock Holmes, Robert Downey Jr. Sherlock Holmes. It’s not Highlander!

Is it a necessary incentive for novelists?  Empirically, no reason to think so. In music industry, collapse of revenue stream didn’t stop music creation and skewed demand for popular works also leads to backwards-bending labor supply curve: low revenue leads to more music. GRRM hasn’t released The Winds of Winter—is the delay b/c we didn’t give him enough $, or b/c we gave him too much? Robert Jordan’s Eye of World—kept extending the series until he died. George Lucas earned so much from merchandise—is that why we had to wait for 16 years after Return of the Jedi?

There is more profit when you have more exclusivity, so filmmakers probably prefer the broad derivative work right, but does it serve the progress of science in any useful way?

Even if you think novel-to-film is the right model, should we extend it to other situations? Even here, the analogy fails as to Goldsmith. Licensing in Goldsmith would be incentive-redistributing: taking $ from one author and give it to another. Not obvious why © would prefer one over the other; 2d Cir. characterizes her work as the primary work and his as secondary: why use these hierarchical terms? © has no policy preference between earlier and later works. GvO rejected the film analogy: O wasn’t going to expand from desktop to mobile; they’re different, noncompeting markets; G’s system is a complement and not a substitute. That’s of course equally true for books & movies: being an author doesn’t give you the ability to make a film.

Breaking the cycle: start to talk about how losing revenue will harm follow-on creator. The way to break the circularity is to look at empirics. We’ve gotten a little better at that over time—rapid rises/falls in revenue and their effects on creativity—they don’t seem to have any.

Rosen: Moral rights? [he doesn’t believe in them]

Khan: Berne requires them; the US says it complies with them largely through the economic rights.

A: [he doesn’t care] The derivative work right is limited by fair use in US law, and is incorporated into both of those treaties as far as the US is concerned—but we still need to know if it’s the right thing to do. Not convinced it’s the best thing to do for society to give her more money from Warhol.

Khan: we’d be saying she should have more control, not necessarily more money. [But control is now done with; we’re really talking about money, as is Goldsmith.]

Sheff: progressive taxation would deal with the backwards-bending supply curve. You could also fight the market structure that captures so much of the value before it ever reaches artists, which can also account from distorted incentives. Do we need fair use to do this, or can other reforms make the problem go away?

A: will take his chances persuading 5 Justices v trying to get progressive taxation passed; only handles part of the misfit b/t copyright and purpose.

Q: is it enough if my airbrushed photos have a different meaning/message to me than the untouched ones?

A: Advocating for Campbell’s standard, reasonably be perceived.

Betsy Rosenblatt, Putting the Fairness in Copyright Fair Use

Is fair use a social justice tool? When she says it is, gets response: often a tool for exploitation. Both of us are right, but how do we make my position more right? How do we shape fair use so that it is more favorable to social justice? criticism, commentary, talking back to dominant culture benefit from fair use; access to knowledge benefits social justice; but appropriation by dominant groups with impunity does not. We do intuit that the teen writing fan fiction is in a different place than Marvel; think about inherent, sometimes hidden hierarchies—appropriating medieval France is not the same thing as appropriating oppressed cultures.

Fair use sometimes favors underdogs, which gives hope for it as social justice tool. What would it take to help underdogs more?

Why do overdogs win? Courts are more likely to respond well to the transformativeness/recognize the transformative merits of work by famous people/people who are admired. Also, unlitigated cases and risk/uncertainty aversion: fair use is both predictable and uncertain, leading people w/more resources to be more bold about fair use, while others will be afraid of having to face litigation. And of course repeat players usually win. Fair use doctrine could better promote progress if it took party resources and cultural market share into account. Add relative power or resources to the list. We already treat hobbyists and students better than market participants; this would be consistent with market failure theories of fair use. Consistent w/theory behind reparations, as KJ Greene has suggested.

Covert socioeconomic engineering in © has been going on for generations, so why not make it overt?

Should the less privileged always win? No, but a little player’s use of a big player’s work is less likely to usurp the big player’s market than the reverse. And this won’t always be relevant—big fights big all the time, and little little.

Her test wouldn’t help Warhols and Richard Princes of world but would put them in context, and help artists who are just starting out; people who are learning to make derivative works and struggling to professionalize.

The haves may have invested time, money, and personality making something that the have-not just uses. We’d care if we thought this would deter haves from making stuff, but the marginal incentives for the already prosperous are limited. The marginal value of fair use to the have not is greater than the marginal value of not fair use is to the have. Jay-Z should have more rights to what he did earlier than what he did later.

Andrew Gilden: hierarchies should be connected to the purpose of fair use. A member of a marginalized group may not have a creative motivation for the use—difference b/t sampling b/c lack of resources to make own sounds and going to the Gagosian and making copies b/c I can.

Fromer: would this disrupt the predictability of looking at patterns in fair use cases? If you don’t know how power imbalances play into thinking, harder to predict, which is worse for people who can’t throw money at the problem.

A: we can’t use the Warhol story as precedent for the flipped version of the Warhol story, and wouldn’t be able to in her story.

Q: road to justice is unlikely to be paved with more landlords, so wouldn’t look to ©.

A: I want redistribution too, but I’m at a © conference.

Q: timing—fixed at creation of first work—Jay Z has more copyright interests now in his early stuff than his late stuff? Why isn’t it assessed at the time of the accused use? This goes to predictability too.

Alex Roberts: a lot of these conversations could be about TM too, as well as ROP. OMG Girlz v. OMG Dolls in which the court’s order says “you can’t talk about cultural appropriation in my courtroom,” and granted a mistrial when some deposition testimony got in calling it racial appropriation. Is that relevant to your story?

A: not to adding another factor, but in the larger sense we should care who the parties are and not declaring mistrials if cultural appropriation is mentioned.

Said: nobody wants to talk about race in these cases—worry about backlash/appellate resistance. If the parties are going to prove up disadvantage, doesn’t that depend on who has the better lawyering? The Pepe the Frog guy didn’t mean to make a hate symbol. One story is fans simply engaging with the meme; the other story is misappropriation.

Consider fee-shifting and compare to civil rights statutes—one of the reasons fair use cases are the way they are is that Google has money to burn on fighting until they win. One-off defendants often can’t, and neither can one-off plaintiffs.

Charles Duan: GvO’s fourth factor language about public benefit/downstream benefits might help you. Consider also what’s done extrajudicially through Google, Amazon. We don’t have the opportunity to litigate the sort of rule you want. So how to get those systems in the direction you suggest?

WIPIP Concurrent Session #6 Copyright Theory

Justin Koo, Exporting Fair Use to Developing Copyright Systems

Difficult to grow when the law doesn’t have flexibility—across the Commonwealth Carribean. Either involuntarily imposed on us or adopted from UK w/o adaptation to local needs/lack of resources in former colonies. A relatively new willingness to litigate, but lack of awareness/understanding of copyright law in Carribean is a barrier. Discussion about moving from fair dealing to fair use hasn’t focused on developing countries/© systems in particular. Developing a jurisprudence: you need to implement an overall copyright policy—what is the purpose of ©? There needs to be a catalog of foundational case law identified—can’t just say “fair use”—even in the US, elements developed in the common law. This also involves using © rights in appropriate ways. Is a jury required to make the system work? [No!] Will importing fair use solve any problems? Worth elaborating.

Brauneis: The US took 100 years post-colony status to stop citing primarily British cases; the transition can take a while.

RT: Don’t need a jury (though there may be subtle effects on how judges behave because of the jury background); Google v. Oracle suggested fair use mostly wasn’t a jury question. Israel might also have some foundational cases to look for.

Naama Daniel, Lost in Transit – How Enforcement of Foreign Copyright Judgments Undermines the Right to Research

Copyright is territorial, but the internet is not; different scopes of protection.

Copyright owner has initiative, choice of forum, enforcement; researcher can at best get a no-infringement ruling. Enhanced by Equustek v. Google’s global injunction against Google requiring delisting a site worldwide. Courts have started to issue global injunctions, making the problem even more severe. Risk of strategic litigation; most restrictive jurisdiction prevails, leading to race to the bottom. Heated debate on countries about enforceability of IP judgments; kept out of int’l convention.

Is the right to research getting an unwanted transplant? Compare to foreign defamation and privacy judgments. Easier to get consensus on excluding those as representing national balancing; she thinks that the same should be true for IP.

Fromer: go bigger in protecting countries’ exceptions generally.

Silbey: surface the debate over what © is for: that privacy and defamation got excluded while IP was still being debated suggests a lack of consensus about what IP is for. Is © a personal dignity right or a property right? One suggests more about local values, perhaps, than the other.

Brauneis: Should repugnant to public policy be built into any result?

A: it already is, but has some problems detailed in the paper.

Lisa Macklem, We Love What You’re Doing… Now Stop or We’ll Sue

Examples: Axanar; unofficial Bridgerton musical; Fleetwood Mac retweeted a video of a man using his skateboard to ride down highway drinking cranberry juice and playing “Dreams”; users managed backlash against Dungeons and Dragons planned rule changes requiring payment for things like podcasts.  When does fan creation cross a legal line, and when is that line a monetary one?

Early stage creators are often willing to collaborate/lack resources. Do fans have greater power as content owners vie for their attention and dollars? DnD fans spoke with $ by cancelling their subscriptions. Motivation for © owners to change how they view ownership? Is there real substitutability in home-grown stuff compared to professional content with special effects? Is fair use/fair dealing the answer? In Canada, the UGC exception is limited to things that don’t substitute. Paramount’s fan film guidelines for noncommerciality make it hard to fundraise to create good stuff.

Contract instead of ©? Micropayments? There’s something going on but looking for thoughts about legal responses.

Rosenblatt: consider implied license and laches. Most insidious about behavior you describe is precarity of fan endeavors after they’ve been downright encouraged to do these things by bringing them in, exploiting fan labor, then going after them when they’re successful.

Feist: won’t find much in free to play, which is really about antipiracy/controlling entry. But larger companies have guidelines for fans, mostly about commerciality/no spoilers.

Sarah Louise Bishop, Scenes a Faire, Novelty, and Genre

Before 2013, no court of appeals affirmed use of scene a faire on motion to dismiss, and since then it’s happened a fair amount: 45% in last 5 years. Should that be possible? Need to define what’s common or standard within the genre, but these dismissals are happening before discovery; 9^th Circuit used to say you couldn’t even do it on summary judgment unless it was uncontested. Why?

Internet = loss of access as a filter to get rid of marginal cases, so need other parts of the toolbox?

Twiqbal: judicial experience and common sense.

How do they do it? (1) vibes, aka judicial experience and common sense; (2) factual precedent; (3) judicial notice.

(1)  Is by far the most common. Either there are no citations or support at all or examples from own experience or that of clerk’s: Luke Skywalker, the Hobbits, and Buffy the Vampire Slayer as examples of reluctant heroes. They aren’t saying, as Gracen does, that your copyright is in the small variation you did from the trope and D didn’t copy that, just speaking broadly.

Maybe we should mind, because the result is that creators working in unfamiliar topics and genres are being held to a different standard. Can’t get them dismissed early. Courts did MTD in following genres: sci fi, horror, romance, spy films, vigilante theme, stories about Americans living in Paris, buddy cops.

Courts declined: colonial architexture, makeup art, waiver and release forms, telenovelas.

Third bucket: Ds who don’t even bother to try knowing judge won’t know enough to decide.

Potentially pernicious effects of cultural competency/homogeneity.

(2)  Citing factual precedents, which isn’t how this is supposed to work. Precedent is for rules, not facts. But courts treat scenes a faire as a legislative fact—a fact about the broader world that doesn’t change case to case. Don’t we want this? Uniformity, predictability, efficiency. But civil procedure scholars are very skeptical of this notion because of the risks of herding, lack of factual support for previous finding, ossification (facts about artistic genre change). 1950s books with both having a plot about a woman elected VP who becomes president when the male president dies. Court says that was a scene a faire given the premise of a woman president, given that no woman would ever be elected. And at MTD, risk of influence by biased submissions of more resourced repeat players who define the genre they’re in for their own benefit.

(3)  Judicial notice—rare; maybe inappropriate under FRE 201 which requires adjudicative facts “generally known” or “not subject to reasonable dispute.” Not for legislative facts.

These cases look like a novelty requirement: not new. As access declined, David Nimmer predicted, courts might turn access against Ps and say they need to prove up originality, turning it into covert novelty requirement.

Importance of genre: courts often quote “standard in the treatment of a given topic.” 7^th Cir. has its own formula: scenes a faire don’t serve to distinguish one work in a class from another.

But you need to define genre or you just have a novelty requirement based on vibes. Ok with this? 10^th Cir said there was no requirement of actually having a genre for the doctrine to apply.

Fromer: scenes a faire roughly breaks into (1) depicting things about the world, like a frat party, (2) tropes internal to fictional worlds that people do—superhero depictions are standard; there is an in between where there’s a stereotypical depiction of college frats in movies. Different categories might make judicial notice easier. Also, note dynamic nature of category—experience of going to law school now is different than it was in Paper Chase.

Said: working on a taxonomy. Posner must be wrong about distinguishing a work because he’s combining it with substantial similarity. [but isn’t it a way of assessing substantial similarity? If the only similarities are at the level of trope, it’s not substantially similar in protected expression].

RT: My priors: Substantial similarity is junk and these techniques develop to clean up some of its junkiness instead of using derivative works properly. So, b/c a programmer can’t get this, a sci fi film has to go to discovery when you couldn’t imagine facts that would change your finding? Seems to benefit no one. Why not targeted discovery/expert instead? And a woman president is still a scene a faire—what’s wrong with a one way ratchet? Idea/expression; I agree with 10^th Circuit that an idea can generate its own scenes a faire: once you think about recreating dinosaurs from fossilized DNA, it is obvious that no story about that ends with the dinosaurs not escaping and everything being fine]

WIPIP Concurrent Session #5 Copyright & Culture

Akshat Agrawal, Copyright's distortive effects

Copyright directs investment to excludable assets. But socially valuable innovations can be difficult to marketize/commodify. Music sampling: the tapestry/raw materials of early hip-hop practice make those kinds of works works assets that can’t attract investment. Reproduction right expanded to cover fragments. In response, courts have identified more unprotectable things—arpeggios, etc. are scenes a faire. But that disadvantages certain genres. Indian classical music: Raga system is the basic framework for composition and improvisation. Various possibilities exist but with inherent elemental similarity; overall aesthetic experience is different yet similar to others. Characteristic phrases have to be present in all compositions in a given Raga; desirably perceivable similarity b/c that’s how the vocalist and audience gets a grip on what they’re hearing. But then that inherent elemental similarity can’t be appropriated—less excludable, less attractive to investors. This then affects popular tastes and shapes cultural identities.

Response: structurally scale down rights; while reducing the value an owner can extract out of a single excludable work, it expands the kinds of expressions that can be invested in—breadth increases, which decreases cultural bias. Restrict derivative right to adaptations/forms of representations that change medium, not works in same primary market.

Lunney: you pitch it as about lack of appropriability but then it’s about cutting back on rights: reform the intro?

Hughes: if publisher can’t get sequel rights, then it will insist on getting the film rights and impoverish authors.

Brauneis: the initial author would still have an advantage in writing the sequel—this is an empirical question.

Q: why should we care who the landlord is?

Carys Craig, Copyright & Gender: Philosophy, Proof & Praxis

Book chapter: research agenda for feminist copyright. Romantic authorship: feminist scholars critically assess role of originality in © and image of authorship as a solitary, isolated male genius detached from his community and the background of the art in which he works (Shelley Wright). Gendering of genius. Inequality is a cause and consequence of exclusion of women.

If copyright reflects a fundamentally masculinist philosophy of selfhood, one might hypothesize that copyright’s effects are also gendered, and systematically disadvantage women.

The limited research we have supports this conclusion. Evidence shows greater tendency to infringe among men; women are less likely to “break rules.” Why? Are there gender differences in how people understand the morality? Women may feel it’s more legitimate to share with friends than with strangers online. Gender & © in the Filk Community: women were more concerned with unattributed uses, and thought © was really about attribution; less concerned if attribution was given. Pro female writers earn significantly less than male counterparts, so © incentives are less. Gender gap also apparent in the © register.

So: women’s activities more likely to be chilled by real or perceived © restrictoins, and less likely to enjoy © benefits as authors and owners, and earn less when they own ©. And women are less likely to question ©’s legitimacy.

WIPO thinks women just need to be better educated and equipped to exploit their rights—that’s a misdiagnosis of the problem, which is not with women and their copyright knowledge but with the copyright system. Success of solutions depends on rethinking foundations.

One part of project: whether evidence gathering is even sound methodology for critical feminists when we respond to calls to prove the obvious; proving negatives, measuring what hasn’t been said and what might be said in a different world as an inherently critical project.

Said: Framing it as “the woman question” is rhetorically tricky and still positions women as the problem—why not “the copyright question: woman edition”?

A: That’s where © is: it says the system is neutral and you just need to get over it. It’s a place to start, but we of course need to recognize why we don’t want to ask the woman question at the end. There are so many axes and hierarchies that there’s no way to ask one question about a marginalized category and come up with a consistent answer.

Hughes: increasing registrations for women at the © office compared to other metrics where women are disadvantaged—ownership of stock, real property, presence on corporate boards, patent ownership which then translates to being in a startup. I could think that copyright is relatively neutral in an incredibly sexist society.

Q: can there be a feminist landlordism?

A: more concerned with participation, accessibility, circulation, but the © system is part of that; not interested in getting more women to register ©.

Lunney: benefits of © system may also include consumption of © works: attending theater, buying albums, books. Agrees that data can only show what is, not what could have been or what should be.

Mailyn Fidler, Cross-Racial Copyright Litigation in Music: Only a Paper Moon?

Have Black musicians been able to use copyright litigation to push back against cross-racial appropriation (Three Boys), is it equal (Campbell v. Acuff-Rose), or is it worse? Who sues who? Who wins? Looking at post-1978, 9^th, 2d, and 6^th Cir (Motown) and SCt; copying and use without license. First part of the project is from the 80s. A lot of cases were ASCAP/royalty cases against discos/jukeboxes, which was not super relevant.

Identifying race of plaintiffs: didn’t prove that difficult; most figures are public. Small numbers; Black plaintiffs are largely elite musicians. P wins overall 71% of the time and Black Ps won 100%; they might be bringing rock solid cases and it’s not favoritism but careful selection of cases. May also resolve through settlement.

Qs: should she start earlier? How should she count duplicates/follow-on litigation, e.g. additional Chiffons cases brought in aftermath of Chiffons case.

Many cases were brought by record labels suing on behalf of Black musicians. [what does that mean?]

Next steps: do these trends hold up? What does the 6^th Circuit look like? What goes on in settlement?

Gena Feist: you might look at whether they were added to the master ownership/composition ownership as a way of detecting settlement. [other suggestions: news reports, Billboard]

Q: just because the music was by a Black musician doesn’t mean that it’s a Black musician who gets paid when a case about that music is resolved in the P’s favor. [this was my question above]

Hughes: should code compositions and sound recordings separately. Can contact living people—lawyers on settlements may be still alive.

A: but the difficulty is knowing what disputes were resolved by settlement w/o a public record.

Buccafusco: Qualitative research, like Silbey does, could be helpful here b/c we don’t have access to base rate info; there’s a nice sample here though that you could go deep into.

Said: ownership records; interview a few repeat players.

Leah Chan Grinvald: history of exploitative transfers also factors in here.

Cathay Y. N. Smith, Cancelling Dr Seuss

Estate stopped publishing six books because they perpetuated harmful racial stereotypes of POC. Public reaction was swift and divided. Over the years, authors and publishers have different responses to problematic material in children’s books—pulled books, altered language, even rewritten plots or dance sequences. Wants to document and explain some of the changes publishers have made, in books, films, and dramatic works. Not focusing on creators. Explore the moral and legal implications, as well as policy considerations.

In all of Seuss’s children’s books, 2% featured POC, all men, no speaking roles. Stereotypical depictions and descriptions, e.g. “all wear their eyes at a slant,” “A Chinaman who eats with sticks.” Black characters are shirtless, wearing hairstyles that match the animals they’re with.

Charlie & the Chocolate Factory: Originally described Oompa-Loompas as African pygmies; eventually changed to white and then orange.

Richard Scarry has changed over time too. Some changes are made by heirs—Dr. Doolittle changed storyline involving “Prince Bumpo” asking to lighten his skin. Nancy Drew—plotlines where POC are very stereotypical or Nancy relies on stereotypes to solve cases.

Films are also pulled/changed: Disney’s Song of the South. Pippi Longstocking removed certain words and scene where she pulls at her eyes while singing a mock “Chinese” song. Sometimes add content warnings instead of edits.

Ballet/musical theater: The Nutcracker dances have been changed—rechoreographed Chinese Tea Dance to remove yellowface/stereotyped movement and be more authentic. Peter Pan: removing Tiger Song (?).

Complications: what is being cancelled/updated: “classic” works for children; copyrighted v. public domain. Why? Who is doing it? Follow-on creator, author, heirs? Forcing a © owner to publish something they no longer agree with could be a problem, but so could exposing children to content they’re not capable of fully understanding. Racial stereotypes in children’s works can reinforce internalized racism, sexism, and white supremacy. But should we airbrush/whitewash history?

Is publicly cancelling a work abandonment? Would it allow fair use? Denying injunctive relief may support the public interest, TD Bank v. Hill, 3d Cir.

In many cases, works edited rather than withdrawn. Should © owner be able to prevent access to older versions? Can third parties edit for offensiveness? Editing works as creating copyrightable derivatives, from just removing a word (the word) in Huckleberry Finn to recreating illustrations.

Q: compare to moves to remove books that feature transgender people.

Lunney: consider first sale/exhaustion: more control over songs/movies that are streamed.

Alex Roberts: Trans artist removing every mention of JKR from HP books and then rebinding them—interesting version.

Laura Heymann: Cancel is a fraught term for this—suggest something else. Consider fair use distinction between someone criticizing Cat in the Hat by showing pictures/quotes versus editing it to change the tropes: the former seems easier than the latter.

Said: descriptively, encourage you to think about absence versus presence, but stereotyped. What are the politics of publication? Why are authors of color not getting to be “classics”? Do we really make the Tea Dance more “authentic” by having a Chinese choreographer? The ballet is capturing a moment of Orientalism—what is it we’re trying to do and why would that be better than Tchaikovsky’s version—how do we know that one choreographer can stand in for all things China and that we aren’t just tokenizing?

Aman Gebru, Communal Authorship

© does well with solo and team authored works, but not communally authorized works, which creates confusion and gets in the way of expression; some actors benefit unfairly, capturing value that isn’t theirs. Team-authored works: dramatic, musical, audiovisual. Joint authorship elements of intent to merge and collaboration apply easily; governed by contracts, industry custom, and institutions.

Hackathons/communal authorship: large scale, informal creative collaborations involving numerosity (usually larger than team-authored works), informality (decentralized) and temporality (contributions at different times). Examples: hackathons, memes, and traditional cultural expressions. Most hackathon agreeements don’t address IP rights that could arise in the event. The solution they’re working on is not shared in most cases, so it would be hard to find intent to merge.

The meme: distinct social object from the underlying picture or any instantiation of it. No formal relationship between various “authors.” Derivative work? Fair use?

TCEs: The Lion Sleeps Tonight/story about Disney settling with Solomon Linda’s family/actual origins of melody seem to be further back in time.
Curtin: hackathons are very different in temporality and formality from your other examples. Would free software communities be a better model?

Ochoa: why not consider wikis?

Buccafusco: why need clarity?

A: Meme litigation goes on now. But maybe the anarchist “no one owns anything” is the best outcome.

WIPIP Concurrent Session #4: Digital Copyright

 [I missed a super interesting AI talk then went to meet a student]

Sean Pager & Eric Priest, The Cost of Music: Has Digitization Made Copyright Obsolete?

Do DIY productions chart? Very few. It is a fallacy to equate tools with capabilities—interviews w/professional producers, engineers, and label executives. Tools don’t make high quality recordings, any more than great equipment can create a great tennis player or carpenter. Average DIY musicians can’t do this without years of practice; learning mixing techniques might not be the best use of their time. Interviewees said there was some democratization from cheap, accessible digital recording tech. Home recording production quality is usually poor; usually you can only rescue them to make them listenable. Artistic/tech skill remains critical to production/recording/mixing, largely unaffected by technological advances, and tech hasn’t markedly reduced the time/cost associated with many recording tasks.

RT: I hear Jessica Silbey’s work with photographers—10 years ago. What we do has value. Sure, says the market, but I’ll take a little less quality for a lot less $. Maybe the consumer base will stave this off for music since the market is different/less focused on advertisers.

Silbey: Yes, photographers say it takes just as much time, and sifting through the images takes time. © wasn’t necessarily an investment recoupment mechanism for them—so consider what folks are saying about the role of © in their lives. Photographers=demonstrated that they are artists, not the way they made their $, which was through contracts.

A: rejects the premise—people in the industry may not be aware of how © functions to structure the industry. Asking people about how © works for them doesn’t get at the fundamentals of what © is doing. But there are significant differences b/t music and photos [said every industry ever right before it was rolled over]—people want adulation and admiration of listeners, and so they want a slight edge, which makes a huge difference. Even “middle class” performers benefit from professional assistance.

Lemley: is this the wrong question? Airgigs: I can hire someone to do complete editing/mixing/mastering for $300—$500-700 for the best engineers in Nashville. Haven’t we moved from the world where you had to buy a limo and hire a chauffeur to the world of Uber—where the pros are gig-based and cheap?

A: Sure, you don’t need a label and can do a la carte. Maybe it’s good enough in many cases. But that’s not much different from what the costs used to be, and the time adds up. You want a producer, a mixer, probably an engineer. Other setup costs. Bottom line: paying for these services makes a difference.

A: depends very much on genre: much cheaper to do hip-hop now. And they may even want a lo-fi sound. But live musicians will cost $30-40 thousand, and that’s if you’re not using a star producer but an indie.

James Stramm, Complementary Scarcity and the Other Post-Piracy Path

Video games, larger than movie industry and North American sports industry combined. Revenue isn’t driven by surveillance but by microtransactions/free to play games. Widespread piracy corroded the traditional model—pirated PC games were 4x authentic copies in UK in 2010. They tried doubling down, including legislation, litigation, and DRM; that iddn’t work. Legacy media adopted surveillance capitalims—Spotify, Netflix, compete with piracy by pricing closer to marginal cost/all you can eat. Data becomes a competitive necessity.

Microsoft and Sony have done subscription models, but mostly video games did other things. Streaming 100 gig game on early 2010s internet wasn’t workable for many, particularly when milliseconds of lag can affect enjoyment.

Partly DRM: gamers wary of DRM for many failed implementations.

Free to play; pay to win—popular in mobile, but also used in console games. Generally disliked by gamers; cosmetic microtransactions like skins. Certain elements questioned as predatory/dark patterns; loot boxes.

Offering complements is a way to find things that are easier to make artificially scarce, and consumers buy them and subsidize the primary good.

Compared to the deadweight loss in conventional IP, access is enhanced, but the extent depends on the type of microtransactions: pay to win are only marginally access enhancing—sell the blade, not the razor. But cosmetic microtransactions are access-enhancing.

Market distortion: does complementary scarcity only work for multiplayer games? To what extent are network effects/market concentration necessary for this to work? Does it trade off with innovation?

This isn’t really negative space—it’s just reacting to piracy. Low enforcement environments can still lead to welfare-enhancing outcomes. Subscription models may appeal for single-player games, but you need market power/large catalog; fragmentation makes the appeal to users go down.

Gena Feist: Sometimes these market configurations are just different worlds, not necessarily better or worse.