prescription and OTC products can directly compete; many non-FDCA-based claims survive

Scilex Pharmaceuticals Inc. v. Sanofi-Aventis U.S. LLC, 2021 WL 3417590, --- F.Supp.3d ----, 2021 WL 3417590, No. 21-cv-01280-JST (N.D. Cal. Aug. 5, 2021)

Scilex sells an FDA-approved, prescription-strength topical analgesic self-adhesive patch, ZTlido (lidocaine), which is allegedly often prescribed off-label, including for general neuropathic pain (e.g., back and spinal pain). It brought Lanham Act and California FAL/UCL claims over defendants’ allegedly false advertising of their respective OTC lidocaine patches.

Article III standing: Defendants argued that Scilex’s allegations of harm to its goodwill and lost profits were conclusory and that the parties don’t compete for the same customers. But defendants were plausibly direct competitors because they all “sell lidocaine patches that treat pain through the skin.”

“A party may prove its injury (1) by using lost sales data, that is ‘actual market experience and probable market behavior,’ or (2) ‘by creating a chain of inferences showing how defendant’s false advertising could harm plaintiff’s business.’ ” And direct competition plus materiality can create such a chain of inferences, as here. For competition, plaintiff alleged that “ZTlido is regularly prescribed for the off-label use of treating general neuropathic pain – the same purpose for which OTC lidocaine patches are marketed and used,” and the court noted that “the competition between prescription and OTC lidocaine patches is reflected in [defendant] Hisamitsu’s advertising itself, which draws direct comparisons between OTC and prescription patches.” In two blog posts, Hisamitsu asserts that the “4% of lidocaine” found in its patches “is close to the 5% lidocaine patch you would get with a prescription” and that the Hisamitsu patches “followed the same principles used for the Rx (5% Lidocaine) version .... The only change they made was to improve the price.” "[T]he extra steps necessary to acquire a prescription patch – including getting the prescription from a doctor – do not change the fact that Scilex and Defendants are competing for the same consumers.”

Likewise, Scilex adequately alleged that its injury was fairly traceable to its ads, despite defendants’ argument that there were other explanations for Scilex’s failure to gain market share and that there are other prescription lidocaine patch producers. Footnote: Even though ZTlido has only been approved by the FDA for relief of pain associated with post-herpetic neuralgia, a complication of shingles, off-label use is allegedly permissible, so its lost sales for off-label uses may be legitimately compensable. Scilex isn’t required to show that the ads were the only reason for reduced sales, so arguments about the crowded market weren’t helpful at this stage. The fact that defendants’ ads preceded ZTlido’s entry into the market doesn’t “foreclose the possibility” that the ads caused consumers to choose defendants’ OTC products when they had a choice.

Redressability: Defendants argued that there was no “substantial likelihood” that Scilex would gain the sales it claims to have lost if the challenged ads were enjoined, because Scilex “would still be legally precluded from advertising the ZTlido patch for any use other than the narrow indication allowed by [the] FDA.” But that’s not relevant to the lost profits argument, which is part of causation.

Statutory standing under the Lanham Act: You can guess how this will go; I don’t think putting this as an Article III standing challenge was helpful.

Must the plaintiff allege its own reliance to prevail on its UCL/FAL claims? Scilex was seeking only injunctive relief under the UCL/FAL. Although this judge had previously required such allegations, the court was now convinced that recent cases to the contrary were more persuasive: a non-consumer plaintiff has standing as long as the plaintiff alleges a sufficient causal connection between the falsity and its losses. In re Tobacco II did say “that ‘[t]here are doubtless many types of unfair business practices in which the concept of reliance ... has no application,’ ” and so injury “as a result of” the defendant’s conduct can be proved without showing that the plaintiff relied on the misrepresentation; Proposition 64’s aim of requiring actual injury isn’t served by barring competitor plaintiffs as a class.

Since FAL/UCL relief is equitable, plaintiffs also have to show that they lack adequate remedies at law, but this can mean injunctive relief when damages wouldn’t protect against future harm, so that’s ok too (at this stage at least).

On the merits: Defendants argued that the claim of implied FDA approval wasn’t cognizable because Scilex didn’t allege any affirmative representation of FDA approval or sponsorship, and there’s no private cause of action under the FDCA. This worked better: Mylan Laboratories, Inc. v. Matkari, 7 F.3d 1130 (4th Cir. 1993), held that implied misrepresentation-of-approval claims must fail because the act of placing a drug on the market with standard package inserts doesn’t falsely imply FDA approval. By contrast, JHP Pharmaceuticals, LLC v. Hospira, Inc., 52 F. Supp. 3d 992 (C.D. Cal. 2014), accepted allegations that defendants had put products on “industry ‘Price Lists,’ and that ‘buyers believe that all prescribed drugs identified on the Price Lists are ... FDA-approved.’ ” That was more than merely putting a product on the market. But Scilex didn’t allege similar actions, only that defendants claimed that their products “desensitize aggravated nerves” and targeted neck and back pain. It didn’t point “any reason that consumers would believe these statements imply FDA approval,” especially since the statements “seem to merely describe the effect of their products. ... More is required to imply FDA approval.”

Likewise, allegations about a “commercial containing [an] individual in [a] white lab coat, referred to as ‘Dr. Bob’ in a doctor’s office and labeled as ‘Bob Arnot, MD, Former Chief Medical Correspondent,’ recommending [Hisamitsu’s] product to apparent patient who asks what he should use for back pain” weren’t sufficient. Scilex didn’t explain why such an ad would lead consumers to believe that the product is FDA-approved or prescription-only. Scilex can’t use the Lanham Act to make defendants say on labels or in ads the specific uses the FDA has approved OTC lidocaine patches be used for.

Hisamitsu also argued that Scilex didn’t sufficiently allege how or why Hisamitsu’s statements – including “ ‘Maximum Strength,’ ‘Apply for 8 Hours,’ ‘Numbing Relief,’ ‘Blocks Pain Receptors,’ ‘Desensitizes Aggravated Nerves,’ ‘for temporary relief of pain ... back, neck, shoulders’ ” etc. – were false or misleading. Scilex alleged that these statements falsely “impl[y] that Defendants’ products completely block pain receptors, eliminate responses to painful stimuli, and provide a numbing sensation,” “impl[y] that Defendants’ products provide pain relief by desensitizing nerves and/or pain receptors,” and “impl[y] that Defendants’ products contain ingredients that target nerves.” Since Scilex alleged that lidocaine “is used to treat pain by depressing sensory receptors in the nerve endings in the skin, which prevents pain signals from reaching the brain,” it wasn’t clear why statements about the effects of lidocaine patches were misleading. It wasn’t enough that the FDA’s Tentative Final Monography for External Analgesic Drug Products for Over-the-Counter Human Use “declined to grant approval for external analgesic products to be permitted to state on product labels that these products ‘numb[ ]’ pain or ‘completely block[ ] pain receptors.’ ” If defendants were violating the FDCA/FDA regulations, that was a matter that couldn’t be resolved in a Lanham Act case.

Scilex successfully alleged that “MAXIMUM STRENGTH” “[f]alsely states that [the] product[ ] contain[s] and deliver[s] to the area of pain the maximum amount of lidocaine available in patch form” and “[m]isleadingly implies that [the] product[ ] [is] superior, or at least equivalent, in efficacy and results to prescription-strength lidocaine patch products.” Hisamitsu argued that, in the context of the entire package, there was a disclaimer that the tagline referred to products available without a prescription. The disclaimer was in small font on a separate panel; that certainly wasn’t enough to grant a motion to dismiss.

Scilex also successfully alleged that “apply for 8 hours’ ... [m]isleadingly implies that [Hisamitsu’s] product[ ] continuously adhere[s] to the body and continuously relieve[s] pain for the specified amount of time.” Hiramitsu argued that it didn’t make claims about how long the product adheres to the skin or if the strength of the product remains effective for all eight hours, and anyway Scilex didn’t allege materiality. Nope. Scilex plausibly alleged that “apply for 8 hours” misleads consumers to believe that the product will adhere to their skin and be effective for eight hours. It further alleged that consumers “have experienced considerable problems with patch adhesion and patch detachment prior to the 8 ... hours for which [Hisamitsu] claim[s] [its] patches adhere” and that if patches are “even partially detached, there may be uncertainty about ... the rate and extent of drug absorption.”

However, the court dismissed claims that a TV ad misleadingly implied that the parties’ products were equivalent in efficacy and that the parties’ products were interchangeable; there was no allegation that the TV ad made a comparison to prescription patches. Hisamitsu argued that its blog posts (that the product was “close to the 5% lidocaine patch you would get with a prescription” and that the product “followed the same principles used for the Rx (5% Lidocaine) version…. The only change they made was to improve the price so as to make the product more accessible to the general public”) weren’t misleading because they highlighted that there was less lidocaine and directed patients to consult a doctor before switching. “The Court first rejects Hisamitsu’s position that a consumer is not misled so long as they are directed to consult with a physician. Such a rule would allow any manner of misleading advertisement.” And the statements at issue clearly made superiority/equivalence claims. It was plausible that consumers would be misled to believe that Hisamitsu’s patch was interchangeable with or as effective as a prescription lidocaine patch.

Defendants argued that the claims were barred by laches, but the causes of action weren’t available before ZTlido entered the market in February 2018. Scilex sued less than three years later, within any applicable (borrowable) statute of limitations, so there was a strong presumption against laches.

IPSC Panel 12 – Identity, Data, and Privacy

Dustin Marlan, The Dystopian Right of Publicity

Privacy problems (surveillance) are often analogized to the dystopia of 1984; ROP problems stemming from infinite transferablility can be analogized to Brave New World (1932). A state of unfreedom that is apparently chosen and pleasurable (though enforced by drugs and conditioning). This is relevant to the extent that everyone has a ROP. ROP is also criticized when applied to use of celebrity personae in expressive works. Is that a preference for amusement over discourse? There are only about 18 celebrity personality cases/year. That’s not nothing and litigated cases aren’t everything, but wants to focus on publicity interests of average citizens: the pleasurable servitude problem. Risk of identity loss means that “everyone belongs to everyone else,” as the slogan used in Huxley’s book goes. Class action ROP lawsuits against social media: result was broader consents in TOS. Voluntary relinquishment of identity control in return for the benefits of social media. Commodification of identity as a prerequisite for social media access. Social, political problem; social networks get monopolies over human capital.

Proposal: clickthrough policies designed to educate the public, maybe choices. 1A shouldn’t be a barrier to regulation b/c the use for endorsement is commercial speech.

Rothman: Does not agree that ROP is the coined opposite of the right of privacy, nor that it should have a purely economic and commercial focus. See her book. Also in her count there are 100s of ROP cases/year—order of magnitude more.

RT: Suggestion: Read Ashley Mears, Very Important People, on pleasurable exploitation and its relation to commodification and anti-commodification norms. Doesn’t have policy discussion itself, but has implications for solutions where individual relations seem pleasurable. Discussion seems indifferent to hidden data use; endorsement is almost literally the tip of the iceberg of individual data use. Proposal seems pretty weak tea; disclosure won’t work if they can still condition access on agreement.

A: On disclosure: Wants to be realistic about what could happen.

Wu: seems more unwitting [without thinking about it one way or another] and unavoidable transfer than pleasurable transfer. But in context of social media, the pleasure is inextricable from the agreement [and it’s not surprising that the agreement would then be experienced as, at least, not a problem].

Bita Amani, Authoring Identity: Copyright, Privacy, and Commodity Dissonance in the Digital Age

Emerging threats to capacity for self-authorship seem greater than in the past—here, algorithmic errors may generate disruptions in identity construction. Personal experience with multiple Bita Amanis with related interests. This has led to problems both with health care (corrected), misattribution of credit (interviews), and database connections as if they were all the same author.

Why should we care? Misappropriation; interference w/connection b/t author and text. Moral rights as a solution? Not clear. Peter Doig, well-known artist: denied creating a particular work; the owner claimed it was Doig’s work, and had to defend his identity to assert it wasn’t his work. The plaintiff pointed to style indicia of it being his. (Doig won; it was another guy named Peter Doige.) Privacy may have untapped potential for dealing with these misattributions, especially false light. Even true facts can be actionable; defamation is not required for intrusion on privacy/public disclosure of embarrassing facts. (Comes out of case involving nasty divorce where one party posted videos involving the kids on YT.)

Victoria Schwartz, Joint Privacy

[picking up kid; interesting project using ideas of joint authorship as a lens on issues of privacy that arise when people create information (or even just have information, as w/DNA) together and so sharing one’s own information or life story necessarily implicates others.]

Uri Y. Hacohen, User-Generated Data Network Effects

Network effects are key to current tech companies, whether via reviews, userbase, or otherwise. AI increases the power of network effects—making Google’s predictive results better. Many problems, including price discrimination, manipulation. Possible changes: changing liability regime so that they are more liable depending on what they know (e.g. that the user is a child); simple payment requirements to pay for harm [Pigouvian tax, I think]; management rights for users. Does not want to break up (at least as first solution) b/c that just means more entities with the data creating privacy and security problems, but we may not have a choice.

Felix Wu: Amazon, Google, and FB actually had different core businesses and if they’re all gulping this data then we have oligopoly, not monopolies. Even in a world of perfect competition, wouldn’t they be competing for who can manipulate best?

A: for FB, more data = more problems; right now they aren’t sharing as much as they might.

Wu: Some would say that innovation from the scale isn’t worth it; give up the marginal benefits and limit the size.

IPSC Panel 9 – Crosscutting IP

Derek E. Bambauer, Everything You Want: The Paradox of Tailored IP Regimes

Customized IP has benefits (avoids lowest common denominator [or highest] problem), but also costs: manipulation to shift from one regime to another; colleciton of information by decisionmakers.

Standard debate assumes semi omniscience of designer neutrally concerned with social welfare. What if rules are largely written by the regulated parties? Bespoke systems are often underutilized by their own designers and outmoded. The paradox of getting your way and finding it unsatisfying.
Examples: Vessel Hull Design Protection Act. Industry pushed very hard against cheap copying, and yet as of 2019 there were only 538 registrations in 20 years versus hundreds of thousands of utility patents. Was more heavily used 1999-2003. It seems that boat designers/manufacturers used C&Ds under this regime, but there were 1100 utility patents on boat hulls and 20 design patents since 2013, which was the last boat hull registration. Sharp shift to regular regime. Fed. Cir. found in one key case that boat hulls didn’t infringe if the decks were different. Registration is fast—takes a month—versus patent, but term of protection is only 10 years.

Computer chips: Semiconductor mask works, 1984. Through 2012, only about 1000 registered. Technical reason: as chips have grown in size and specialization, reverse engineering is more expensive than designing them from scratch.

Audio Home recording Act: Excluded general purpose computers, so whoops. Diamond Rio case: excluded MP3 players. Customers didn’t like paying more for DAT; CDs won.

It’s hard to write and get passed exactly what you want—industry insiders may compete. Also, as a tailored regime begins to flow closer to a generalized regime, it falls down the gravity well of the general field and is overtaken. Maybe small changes are easier to pass.

Industries design for current needs and not for what it may evolve to because innovation is difficult to predict (like the future), especially if generated by upstart or edge firms or driven by wider tech changes. Even if we assumed incumbents have better info, their own internal pressures exist to align legal rules w/existing business models. Give and take of legislative process may be better when it harnesses information from more stakeholders than those who are generating the IP. Tailored regimes may also be tightly coupled and fragile—subject to disruption/irrelevance from one unfavorable judicial ruling, like boat hulls.

Generalized regimes are more adaptable, adjustable by more institutional stakeholders (judges, admin agencies, the bar). Overton window: you get your specialized regime; it’s difficult to revisit that after something changes because the legislature thinks it’s done. Copyright Term Extension Act: blatant rent extraction generates or increases opposition. When Big 3 automakers requested their own tailored design regime to exclude repair parts, Congress didn’t want that.

Bespoke regimes may divert innovation—music industry was successful in delaying and killing off DAT, but that allowed the rise of the CD, and MP3s, and then Napster and P2P.

IP industries have historically been terrible at prognostication, as w/the VCR. Maybe we should be less worried about attempts at incumbent protection/rent extraction via IP.

Even if my thesis is right, it will still be an irresistable lure/strong optimism bias, which will cause incumbents to concentrate on legislative activity instead of innovation under the standard IP system.

Jake Linford: are there overlaps with patents and boat hulls suggesting two bites at apple.

Bruce Boyden: another reason is that crafting a bespoke system takes years, making narrow legislation more likely to be out of date.

Mark McKenna: Another explanation was maybe these bespoke regimes weren’t addressing actual problems; overrepresentation of people w/specific litigation interests.

Betsy Rosenblatt: If they solve problems, general systems might be much better at solving specific problems and not advantaging opportunists—a narrow protection might be harder to manipulate.

RT: Before coming to a conclusion about comparative advantage, consider what creates trolls in more general system: different kinds of exploitability of larger systems. Consider compulsory licensing as a midway point here as well. Also, the history of DMCA was that 512 was the price (which the © industries thought was small) for 1201; 1201 turned out not to be worth it, which supports your argument, but also indicates that matters can be more complex if there is horsetrading across regimes. 

Mala Chatterjee, Understanding Intellectual Property: Expression, Function, and Individuation

© and patent differ in breadth and type of rights (copying requirement v. independent invention). Treated as distinct and scholars warn against overlapping rights. But what are the subject matters and how are they to be distinguished?

Argues that defining difference b/t creative works and inventions is the way in which they are individuated. Creative works are author-individuated while inventive works are structure-individuated. Two acts of authorship can’t result in the same creative work, only structurally identical works, while two acts of inventorship can result in the same invention.

An author who has made something has said something. Sets aside what counts as expressive work, but the defining feature of the category is speech. Expression is the kind of thing for which where it comes from makes a difference to what it is. Author’s work is uniquely hers even if others might also be connected to it and might make things that look alike. Pierre Menard; appropriation art where the point is that it is structurally identical to something else—Warhol’s Brillo Boxes and Pettibone’s Brillo Boxes, and this matters to their aesthetic properties.

Inventions are importantly different from creative works in being tools: instrumentally valuable for some specified end. This isn’t to say that it doesn’t matter at all who invents: it could be historically relevant that both Liebnitz and Newton invented calculus, but that doesn’t make calculus different.

Vindicates core features of the structure—originality as © requirement—must come from author, not must be novel. Independent creation is likewise justified. For patent, this makes sense of utility, novelty, and lack of independent creation defense. Ownership is of linguistic description of structural properties of invention.

For ©, standards of proof are wrong if they allow inference of copying from structural similarity alone; theory also refutes rejections of transformativeness where clear meaning to audiences is different even w/o structural change. Also relevant to some patent doctrines (sorry).

Jeremy Sheff: Paul Goldstein has told this story several times—quotes a colleague saying if Shakespeare had died as a child, we would never have had Hamlet, but if Newton had died as a child, we would still have calculus. He sees this as something about teleology of patent and ©: what they are and what ends they’re for. Do you care about ends?

A: don’t know what it means for design of legal systems unless paired with theory about aims of legal systems.

Linford: is this reputational? Richard Prince is understood to have a different meaning/authorship of his works because of his reputation. That might have implications for what counts as authorship in cases like Garcia. Is this bringing in concepts from TM/ROP about branding? Could a patent turn on the personality of the creator?

A: recognizing that creative works are more tied to authors generally than invention is. Need to look for authorial intent, but part of what tells us is whether that results in successful communication is context surrounding the actor. But not saying that authorial intent wholly constrains the work.

Mark McKenna: sounds like Abraham Drassinower’s theory—he says he’s explicating a view inherent in © as a system not a metaphysical view that there are things that are inventions out there in nature. Are you making an argument that these are not just legal constructs but things that are true about the world?

A: aligned with Drassinower but one important difference is that she is starting not just with legal system but with works and practices surrounding them and arguing that they are plausibly real things in the world.

Betsy Rosenblatt: pace Amy Adler, doesn’t your approach kill all of © if it’s about individuated expression? © is at odds with that at least for the sorts of works that are personally expressive. We don’t care about authenticity of an air conditioner manual, but it's still in ©. Also urge you to include recipient/dialogical creation of meaning, which helps you—an invention is structurally the same to every recipient and expression isn’t.

A: not quite all of ©, though it does suggest limits. 

Dilip Sharma, Arbitrability of Intellectual Property Disputes

Indian cases have long pendencies, making arbitration more attractive. WIPO offers mediation and arbitration services. Number is rising, and expected to rise in India. Court: Booz Allen v. Hamilton—only disputes involving rights in personam are arbitrable and IP isn’t. Delhi High Court also held that © infringement can only be dealt with by courts because the statutory remedies are all there is. But Eros v. Telemax allowed arbitration: law said that every © suit or civil proceeding should be instituted in a district court; but interpreting that to bar arbitration would be too broad where the IP dispute arises out of a commercial contract. Another case: patent disputes about infringement were not about in personam rights and were arbitrable.

Other nations: much more pro arbitration. Countries may require registration of arbitral award before it’s enforceable. India needs legislative support.

RT: Does India recognize UDRP results? It’s mandatory for registrants to agree. Possible model?

A: to the extent required by international rules, yes, but not much support.

Ana Alba: consider enforceability of international arbitrations—that is also required in some cases.

Mauritz Kop, Quantum Technology: Waiving or Pledging IP?

General principles of quantum mechanics: physics of very small + engineering. Superposition, entanglement, tunneling: defies laws of physics on the macro level. Applications: computing, communication, sensing, simulation, basic research, and AI. Not yet many use cases beyond cybersecurity, finance, and defense; consequences remain mostly unknown. Dual military/civilian uses are possible necessitating export controls and shared tech transfer policies. Foresees heavy regulation and chilled innovation given the very high risks. Key principle: equal access to benefits. Similar motivation to open COVID pledge, but key quantum tech is now controlled by a handful of multinationals, universities, and gov’ts. Could we temporarily override rights in quantum tech to repair market power problems?

Should build on adjacent fields like CRISPR, nanotech, which also require huge initial investment. Looking for mechanisms beyond social solidarity. Right now waiving IP would have no effect without sharing knowhow, since patents don’t disclose that right now; there is no skilled workforce available; clean rooms are very expensive. Pledging IP looks promising given the current limited number of stakeholders. Lack of consensus about whether a special regime is needed.

Sheff: questions about resource limits being more important than IP

Rosenblatt: given those resource requirements, maybe history of nuclear regulation is more important than history of AI regulation

IPSC Panel 5 – Copyright, Distribution, and Access

Jacob Victor, Copyright’s Law of Dissemination: trying to disaggregate dissemination from use of a work in new creativity/e.g., transformative fair use. Focus: liability exceptions and regulatory regimes that facilitate large scale distribution of works by direct distributors or via platforms that enable or enhance public consumption/enjoyment of those works. Statutory carveouts: broadcast radio of sound recordings; publication for print disabled, §108 library exceptions. Judicial: Google Books/utility expanding fair use; Sony v. Universal safe harbor; first sale; operating outside ©’s exclusive rights (Aereo) [largely failed]; admin state—compulsory licenses, recording device levy; other: ASCAP/BMI consent decree; DMCA safe harbors; Section 1201 exceptions.

Trends and patterns: whether a use is compensated or uncompensated. Starting w/uncompensated radio broadcast for sound recordings/OSP safe harbor; compulsory fee for §114 uses; ASCAP/BMI consent decrees—one question is whether the license will actually be paid per the statute or whether it will backstop private negotiations. Digital TV: operating outside © failed, and Aereo also failed to get a §119 compulsory cable license.

Conventional wisdom: Incoherent mess; regimes generally unrelated to each other, primarily products of industry lobbying, little meaningful institutional design, anachronistic like jukebox compulsory licensing fees. Political economy is helpful, but if we look at actual operation, there are subtle patterns of latent normativity. (1) Dealing with transaction cost problems (though thinks that’s likely overstated); (2) ©’s inherent distributional inefficiencies; (3) market power barriers to innovation in dissemination—removing bottlenecks based on market power; (4) non-efficiency considerations—libraries, disability rights, distributive justice. (2)-(4) are all within the conventional incentives/access tradeoff lens.

Not claiming it’s fully coherent, but it’s not just a sui generis response to a single industry’s market failure. Frame can help diagnose problems with current system like complexity, inconsistency (lack of a terrestrial broadcast sound recording performance right), failure to keep up with tech change (Aereo maybe should have been eligible for a cable-like compulsory license), poor institutional design (Music Modernization Act tweaks but does not fundamentally change complex system).

Sheff: why is coherence an aim? If we are pursuing goals that conflict, we might have to pick which is more important in a given context.

A: Because there’s already a pull for coherence; we can make it better by being more explicit

Lisa Macklem: consider how courts often land on wrong analogies for new tech. Also purpose as a consideration in finding infringement.

A: Fair use has been a good example of courts moving beyond static statutory language for new tech, but they may defer to Congress when Congress didn’t imagine what happened. 

Bita Amani and Mark Swartz, Cultivating Copyright Custodians for the Digital Age: Law, Libraries, and the Public Interest in Lending

Pandemic + important Canadian SCt case on education and © motivated this discussion of rapid acceleration of library efforts and ability to offer digital materials. Pandemic: students who had ordered books weren’t able to get them; some were overseas. There was pushback to coordinated call for libraries to use exceptions and limitations, but these were important for users—emergency access through Internet Archive and HathiTrust; fair dealing scans for patrons; generally able to meet info needs more or less.

CCH decision, 2004: fair dealing is a user right; only if a library doesn’t make out fair dealing does it need the library exemption. Fair dealing test: needs an allowable purpose; if allowable, consider purpose, character, amount, nature of work, available alternatives, and effect of dealing on the work.

Canadian fair dealing: preservation isn’t listed as a fair dealing purpose, but library exception allows maintenance or management copying for the permanent collection. Underutilized because of risk tolerances. Exception doesn’t apply where an appropriate copy is commercially available in medium/quality appropriate for the relevant purposes (but that limit doesn’t apply if the copying is for record keeping purposes, insurance/police investigations, or for restoration). But the law does apply to at-risk rare or unpublished originals, or for change to an alternative format if the original (or tech required to use the original) is obsolete or is becoming obsolete—and need to use something via the internet may qualify for this exception.

Libraries need not rely exclusively on this exception for their patrons because fair dealing is available too. Format-shifting is important, but libraries have now transitioned to licensing born-digital items and bundled deals dominated by large publishers. This is the oncoming crisis. Libraries should own eBooks so they don’t risk losing access or control over the information they can provide to patrons.

Contracts should not be permitted to override exceptions and limitations. NY and MD have new laws: publishers who offer ebooks to public have to offer licenses to libraries on reasonable terms. UK campaign to investigate academic ebook market is a similar push. Amazon is changing its tune, and may sell to libraries soon. But we need changes to Canadian law to ensure that contracts can’t override fair dealing and TPMs can’t be used to prevent fair dealing. Libraries also have to assert format-shifting and controlled digital lending rights. Explore digital exhaustion for libraries. Libraries have to assert roles as custodians of information and providers of access.

Linford: Physical space limited what libraries could keep in their holdings in the past; how does that bear on these changes?

Swartz: these are different problems. The physical space problem has solutions for academic libraries: offsite storage, collection management to ensure it represents needs of users. But the library owns that content and is able to exercise user rights/exhaustion/first sale. The digital world has switched to the library as temporary waystation not under its control, paying yearly to offer the same materials.

Amani: pandemic illustrates the problem: they were unable to get publishers to respond to give patrons access to materials that the library physically had but could not get into patrons’ hands physically. 

Kylie Pappalardo, Copyright licensing and distribution in Australia’s screen industries

Pop. Approx. 26 million; until 2015, mostly free to air TV, two public service broadcasters, three commercial channels, one cable subscription service. So what is available to the Australian public? Significant overlap in availability of top films (blockbusters) 2010-2015 in Australia and US, but also significant numbers that are only available in one place or another, especially in 2017, where 40% of whole were available to both. By 2021, there were more films overall and more convergence. Many gaps in the long tail in the US, not just in Australia—all time box office films, almost half not available in the US. There’s not much overlap in the repertoires of the three different streaming services (Netflix, Prime Video, one other)—true in the US too even with many more providers.

Contrast to music: near complete overlap in US/Australia availability, and also more significant overlap in Tidal, Spotify, and Deezer coverage (main Aus. services).

Research agenda: why isn’t screen content as widely available as music? Could it be? Can costs/logistics of screen production and distribution which are connected by complicated contracts be reconciled with public goal of broad, affordable, and sustained availability? Can we reimagine a copyright system that is more distributively equitable and efficient?

Macklem: regulations of mandated local content may also make a difference—and tax credits for production in the country have made a difference in Canada.

A: In Australia, there are quotas on free-to-air content but not on streaming services; there are tax credits; leads to complicated questions about how to count something as Australian—is the Marvel film that films on the coast really an Australian film? 

D.R. Jones, Under the Umbrella: Assessing Recent Court Decisions that Promote Public Access to the Law

The key principle: law must be available, and people need access to it. Before Fed Register and CFR, people didn’t always know the law. Two cases went to SCt before it was known that the provision at issue didn’t exist. Making available but only in a place that’s difficult to access is not enough. Recent cases: GA v. PRO; ASTM v. PRO (DC Cir.), and Int’l Code Council v. UpCodes (SDNY).

GA v. PRO: SCt focused on authorship: creation by officials means not authored by © claimant. Doesn’t cover all situations. What about model codes/standards drafted by private organizations then adopted into law? UpCodes said GA v. PRO didn’t apply because of the limited authorship test used by the SCt, but there are other ways to support the principle of access to the law. Thorough decision: access to law prevails over interests of © holder; posting the law as law is allowed.

Risks: almost back to where we were before the Fed. Reg. Issues finding standards in print and online. State case: P lost a counterclaim b/c no one could find the standard; Indiana SCt discusses in 2017 difficulties in accessing a standard.

Linford: then how should we subsidize the creation of law?

A: Access to law is the key value here (so, some other way).

 Liam Sunner, How the European Union’s obligation to include and incorporate human rights as part of its external relations and trade of intellectual property, implies the inclusion of the Convention on the Rights of Persons with Disabilities within this obligation 

EU initiative to mainstream consideration of human rights in “all areas of its external action without exception.” But the EU doesn’t necessarily have much power to back up its commitments. Marrakesh Treaty: can be traced to Art. 30(3) Convention on Rights of Persons with Disabilities, which requires parties to ensure that IP rights aren’t unreasonable or discriminatory barriers to access to cultural materials by persons w/disabilities. Marrakesh identifies a clear human rights violation and provides explicit mechanisms for addressing it. In human rights terms, addresses disability rights, right to education, right to participate in cultural life. CRPD defines education very broadly.

CJEU asked: does Marrakesh fall w/in common commercial policy? Have to examine both treaty purpose and treaty content to see if it’s an EU competence. Concluded that access was not within common commercial policy so EU didn’t have exclusive competence to enter into the treaty for the countries.

EU has had direct impact on IP chapters and copyright exceptions/limitations in trade agreements.

Felix Wu: what is the ultimate practical significance of whether these treaties/conventions are incorporated into EU law? Given the member states we have, what would change? Is there a realistic prospect that member states wouldn’t sign?

A: depends on the member states. In practice, there could be political constraints on accepting human rights constraints from treaties, or practical limits.

Wu: are your arguments limited to access for disability purposes or do they extend to access rights generally?

A: the latter—Marrakesh is an example.

IPSC: Copyright & Trademark

Panel 2 – Copyright Enforcement:

Faye Fangfei Wang, Resolving Copyright-related Cases Over the Internet with the Assistance of Artificial  Intelligence in Europe

Automated notice and takedown/Content ID with appeal mechanism as an example of how the new European rules are supposed to work. Automated mechanisms are supposed to be used for identification but not legal assessment. Conflict over whether this is a general monitoring obligation. Proposed Artificial Intelligence Act requires assessment of AI to ensure that it doesn’t distort behavior or cause physical or psychological harm: this interacts with the © regime. Identifying audio/video is a challenging task where there are changes in speed, background noise, etc. Use as part of a lecture, video game being played, etc. Risk assessment/risk scale should be part of the integration—degree of confidence in detection should matter to treatment.

Cathay Smith: Do you foresee a point in time at which an AI might be able to make a fair use/fair dealing decision in the moment? Consider example of police officers playing music to deter online posting of video of their actions—exploiting the automated systems.

A: not ready yet. But fair use/dealing typically involves reproduction of a limited portion, and AI could calculate portion. This may be one factor. Identifying reason for reproduction may be far harder for an AI—commentary or just attractiveness.

RT: “Limited portion” is more true with video and songs, less true with photography. The European regime doesn’t seem to have given any thought to how this will work with photography; does AI make distinctions? Also interested in reactions to German implementation proposals which seem to have some thresholds attached, not just sliding scale.

A: Content ID is video and audio; AI may be able to match pictures.

Elizabeth Townsend Gard, Creativity in the Shadow of the Case Act

Podcast for creators focused on quilting and copyright; online copyright camp for creators, mostly women—educating creators on nuances is empowering and they spread the world. Disrupted by CASE Act. Reviewing the comments on CASE Act: the comments were focused on procedure. EFF doesn’t want fair use cases in the system; MPAA does. Comments demand ease and accessibility but the discovery rules are insanely complex, which is a concern. There is fear and threats surrounding opting out on both sides. Librarians are threatening people: you might have bigger fees; some tell patrons not to opt out. Should there be public lists of institutions that plan to opt out so that people don’t waste the fees on filing? There’s no conversation about creativity. CASE Act is detracting from education about the fundamental principles of copyright.

In comments: Songwriters say that they can’t afford to file cases if there will be opt-outs, despite their activism in pushing for CASE in the first place. Science Fiction authors: won’t be useful for SWFA. The creators themselves are saying it’s not for them. Big corporations say they’ll opt out; libraries the same. Then who is this for?

How do you separate TM and ©? The disputes often overlap. The CASE Act doesn’t seem to help.

RT: Who is it for? I think it’s for photographers. I wonder what it would be like if it had been written just for photographic works.

A: Is hearing other creators say “it’s my time for revenge!” and also people worried about liability so they may not opt out. It’s the uncertainty that is so difficult.

Dmitry Karshtedt: Overlap with constitutional issues in patent: resolution of claims in administrative proceeding. The policy issues you raise are different but perhaps there’s an interaction with the constitutional issues.

A: The comments raise the constitutional issues. It wasn’t really fully baked when it passed and the fact it went through Dec. 20 as part of the Covid package created problems. Putting David Carson, with a track record with the Office, in charge suggests they really want it to work, but it’s still half-baked in terms of implementation details.

Dmitry Karshtedt and Sean Pager, Volition and Intent in the Law of Direct Copyright Infringement

Patent and © treat these areas very differently. Advent of new tech changed focus from direct to indirect, and back to direct again. Congress amended the statute to ensure that retransmissions of cable would be public performance; then the issues shifted to copying. Netcom raised the problem of volition for copying for online servers. Aereo brought direct infringement back into focus where Netcom had seemed to settle the issue; put pressure on the line between direct and indirect liability. Netcom said that volition was lacking when the user was the one who made the copy and the service was a passive conduit and could not be directly liable though indirect liability was possible in theory; it was almost a moral distinction. Aereo complicates that. Cable-likeness established its direct liability. It’s unclear if there’s a direct infringer, which matters because there can’t be indirect liability without someone else directly liable. Loosely similar to divided infringement in patent law where no one person infringes but their conduct together does.

Confusion: 9^th Circuit thinks that volition is still an element; SDNY courts have held in the embedding context that volition is not an element after Aereo and embedding can be infringing display.

Scalia’s dissent was focused on Aereo’s lack of curation, but they don’t think that matters. Indirect liability depends on the associated circumstances. If you set up a webcam in a coffee shop, and someone happens to sing a song that gets transmitted, you are responsible for the resulting public performance even if you lack knowledge that it happened. Thus, even if the majority’s cable-likeness test is unsatisfying, Aereo’s setup was directly responsible for the public performance, which justifies liability in this case. Cablevision has a much more elegant analysis: asks whether contribution to creation of infringing copy is so great that it warrants direct liability even though another party has made the copy. For Aereo, only the tech entity is responsible for the public performance. Both majority and dissent in Aereo agree that on-demand providers perform. SDNY opinion on display gets to the same result through proximate causation, which they don’t think is right—causal responsibility is different.

The way forward: a causal responsibility approach to direct liability. Rooted in moral philosophy, criminal/tort law about innocent instrumentalities.

Aereo doesn’t have a purely passive role; functions automatically at behest of user. Aereo could be said to be supplying a product, but Aereo has the ability to control. Simplistic to say that only button-pusher can be a direct infringer. Did the defendant play a substantial enough role in the user’s acts to become causally responsible? Did defendant control the circumstances in which the user performed the acts in question? Aereo transmit content on demand, and the user triggers that by pushing a button. In the aggregate, this is infringing public performance because Aereo is causally responsible.

So we think that public display SDNY results are correct because D are causally responsible. But Usenet simply provides access, which is not enough for causal responsibility, so 9^th Cir. Giganews can be right too (Perfect 10?).

Matt Sag: intent?

A: intent exists as an element but not w/r/t specific works, just general intent that there will be a performance. If your whole service is designed so that content can be transmitted to people, then hard to deny knowledge that it will get transmitted. [That sounds a lot like indirect liability to me. The underlying idea is that all or most of what gets transmitted will infringe, and that’s a standard indirect question.]

RT: (1) Perfect 10? (2) Haven’t you just shoved the Aereo question into the phrase “in the aggregate” because the right is public performance, not performance, so we have to decide what counts as a performance to the public, so that you’re assuming the conclusion? Compare Dropbox which happens to back up multiple copies of The Big Lebowski, each downloaded by a different iTunes user that has legitimately paid to do so?

A: it’s a different kind of intent. In the public performance cases you do have to answer the aggregate question, which goes back to the transmit clause which defines public as including different places and different times. The mens rea is not whether the underlying work is ©d but whether a performance will occur. [What distinguishes that from a copy shop?]

A: the copy shop has set up technology that allows the user to make a copy, who is causally responsible. But the webcam creates a transmission that would otherwise not exist.

Bruce Boyden: proportion of infringing uses can’t be the distinction; even if it’s substantially certain that infringement will occur, you can’t be sure which or when. It has to be about whether the overall purpose is ok. The purpose of the copy shop is to allow copying of things, some of which will infringe; the purpose of Aereo is to retransmit network signals, where it’s not a matter of uncertainty about what will be retransmitted.

A: important to consider equities between user and technological provider. The user in the copy shop has to take a book to the copy shop and make a choice about what to copy, whereas the user of Aereo will not be liable on their own because they aren’t making a public performance. [This seems to assume the conclusion: there must be liability for one party, as opposed to the conduct being legal in its entirety.] Maybe we’re going back to Breyer’s functional analysis, but for cases like Polyvore it may provide a more satisfying analysis.

Sag: is this principle or policy?

A: trying to start from first principles. The waiter who delivers the poison is less causally responsible than the person who creates the poisonous drink. [I think this embeds the conclusion of whether there was poison in the drink in the analysis of who is responsible for delivering the poison. If it’s not public performance/display, then it’s just a drink, not a poisonous drink.] Being a button pusher is not the sine qua non of liability, though maybe indirect liability gets to the question easier.

 TM:

Mark A. Lemley and Mark P. McKenna, Trademark Spaces

There is a space on a product where TMs go—on the back of a computer in the center, as a logo on clothing. But others are harder. Stitching on pockets? Sometimes hard to tell whether something is a design or a brand. Seabrook Farms: design elements around a name/logo are not marks. By contrast, Georgi vodka case says that a big O can count as a TM and may be inherently distinctive even though it circles a logo; maybe it’s part of the logo itself. Other packaging elements can serve as middle elements, like color on packaging/multiple colors on packaging. Finally, Tom Lee’s fabulous empirical studies: when you put something in the “TM space” on a box of cookies, many people will perceive it as a TM even with a generic term.

Courts and the TTAB are evaluating branding at step zero for both products and packaging, without taking evidence, often without knowing they’re doing it, based largely on intuitive sense of whether consumers are likely to view an image as serving a tm function. Much of that intuition stems from TM spaces. TM owners can create new spaces, conditioning user response, but doing so requires more than secondary meaning for one mark—Louboutin’s red soles don’t mean that any color sole automatically functions as a TM. TTAB and courts should make findings on TM spaces; we should require secondary meaning as a default outside an established TM space. Even if you are in a TM space, you still need to show distinctiveness. Cts/TTAB should make broader findings about whether a space is a TM space generally. W/understanding of inherent distinctiveness as a place, makes it easier to require secondary meaning as a default in places outside the TM spaces. But putting generic word in TM space shouldn’t generate ownership of that generic word. If in a TM space, do normal Two Pesos analysis; if not in a TM space, secondary meaning required regardless of whether inherent distinctiveness might be possible in another space.

Linford: what do you do about the fact that TM owners are now willing to slap logos everywhere, e.g. on race cars. [I will note that’s not everywhere generally; it is everywhere on race cars, and that might matter! Betsy Rosenblatt has a similar response: that may ID what is actually an ad space not an ordinary product, and racecars and sports jerseys are now equivalent to billboards]

McKenna: some TMs may only work as marks because their placement is rare. [tragedy of the commons!]

Jeanne Fromer: Brunetti’s lawyer had a discussion of collar marks.

Lemley: Lululemon registration case is a really interesting example: moving a logo outside of a Tm space so it looks like a stylized thing on a jacket may not move the meaning.

RT: (1) Booking may make your recommendations of limits (when FUDGE COVERED COOKIES is in the TM space it’s still generic) impossible because restrictions will always be on scope of rights not existence of the mark in the first place. (2) Interaction with Grace McLaughlin’s article on marks in the TM space that fail to function nonetheless. (3) Descriptiveness refusals in ITU cases— Eastman Kodak v. Bell & Howell versus the 1/64^th Mattel case—provide useful analysis.

Lemley: on (1), yeah that’s a problem; maybe everything is malleable and TM is whatever you say loudly enough is a mark. 

Jennifer E. Rothman, Navigating the Identity Thicket: Trademark's Lost Theory of Personality, The Right of Publicity, and Preemption

The interface b/t TM and ROP is a mess—Joseph Abboud case isn’t just a fair use case; court avoids the question of whether he could transfer his ROP by holding he didn’t, and the court found no false endorsement, but those questions don’t go away b/c one court dodges them. People are starting to claim these kinds of things more commonly. Not always owned by same P—high profile cases involving chefs who purportedly transferred both TM and ROP to another and then transferee claims that they can’t use their own names on their own restaurants. Happened with a wood-fired pellet company too.

Hubert Hansen IP Trust v. Coca-Cola led to $10 million jury award, more than what Michael Jordan got; CC owned Hansen’s Soda founded by Hubert Hansen (d. 1951 when postmortem rights didn’t exist). Grandkids sued for ROP violation.  Even assuming that Hansen’s family succeeded to postmortem rights, how to reconcile that with CC’s ownership of the TMs? CC’s ability to use photos of him, references to his life story? If CC owns all the IP except the ROP, what does that mean for the successors? Can they start their own juice business and use his name in advertising?

Conflict preemption as a possibility. Claim: federal TM has as one objective protecting autonomy-based and dignity-based personality interests, along with the others that are more commonly referenced. (1) Natural/sacred right to one’s name; (2) limits on using another person’s identity; (3) limits on transferability of personal marks; (4) limits on abandonment. These doctrines are largely intact from the 1800s even if we have forgotten why they exist.

Implications: we should further restrict alienability of personal marks (distinguish de jure and de facto marks—can’t always separate identity from person—Ford Motor Co.—we might initially have thought Ford integral to the corporation, but now we know it’s distinct); we should continue robust latitude to use one’s own name/identity after transfers of marks; shores up TM’s negative spaces by permitting confusion when we tell the truth/provide information about self; and finally explains TM’s expansionist impulses and provides a means of limiting them when only corporations and not natural persons are involved.

Implications: Hansen: CC has the rights to do what it did, but Hansen heirs have rights to use name in juice though maybe not as marks.

Abboud: if didn’t transfer ROP, has a lot of flexibility to do what he wants.

Two bad options: ROP swallows up TM to become mutant TM law, or if we don’t have that, we have TM law that vastly overlooks and shuts down legitimate personality-based interests often asserted as ROP but also are adequately protected under TM properly understood.

McKenna: historically names wouldn’t have been (technical) TMs; this would have been unfair competition law. Limits on the remedies in these cases would have been true in any unfair competition case. All of unfair competition got assimilated into TM; all the remedial modesty went away. Is there anything special about names or is it just a consequence of the collapse of all unfair competition law into TM? It’s fine to say that names should be pulled back out for specific reasons, but why it happened may matter.

A: paper covers differences in context of personal marks.

Victoria Schwartz: Negative v. positive rights: ability to tell one’s own story versus the ability to block others from telling a related story—may deserve different treatment. Name versus other aspects of identity may also change the analysis. Could CC really tell Hansen’s life story in its ads? Is that the same as using his name?

RT: consider literature on ideological drift/preservation through transformation—right now you seem to be resting a lot on “we used to do it this way.” But it would be actively shocking if 1800s judges understood how celebrity and market dynamics worked now. These doctrines crumbled at the edges for reasons that seemed good to their proponents; I think you should confront more directly that it’s not obvious why 1800s cases would be right now.

A: Thinks there is a normative case for separating out personality interests and will defend that directly.

Felix Wu: names v. other things?

A: interesting changes in this over time/different cases—signature/likeness may not transfer with transfer of name because more connected to moral interests.

From the archives: knitalikes

Found going through old knitting magazines, a version of the "splurge or steal?" fashion spread for knitters: "Which One Is the Calvin?" Text: If you love the high style of designer originals but hate the high costs, this is the sweater set for you! The crisp cable detailing that decorates the genuine Calvin Klein is faithfully re-created in our version. The delightful difference: You knit [Family Circle's] twosome ... for just $47, instead of spending $340 to buy the real set. So which one is the Calvin? You'll have to look closely--only the price tags give them away. [the magazine goes on to say that the one below is the Family Circle version.]

The kicker: Calvin Klein also authorized knitting patterns. Does that matter?

Honey Badger Don't Care (4th of July edition)

 Seen on the street:

An Antitrust Framework for False Advertising, out now

Michael A. Carrier & Rebecca Tushnet, An Antitrust Framework for False Advertising, 106 Iowa L. Rev. 1841 (2021)

From the introduction:

 

Federal law presumes that false advertising harms competition. Federal law also presumes that false advertising is harmless or even helpful to competition. Contradiction is not unknown to the law, of course. This contradiction, though, is acute. For not only are both the regimes at issue designed to protect competition, but they are both enforced by the same agency: the Federal Trade Commission (“FTC”), which targets “unfair competition” through antitrust and consumer protection enforcement.

Anticompetitive conduct, the focus of antitrust law, increases price and reduces quality. False advertising, the focus of much consumer protection law, deceives consumers and distorts markets. Both types of conduct harm consumers. Despite this overlap, nearly all courts have dismissed private antitrust claims based on false advertising. They have concluded that the conduct cannot violate antitrust law. Or they have presumed that the harm is de minimis. This makes no sense. As the Supreme Court has long established, “false or misleading advertising has an anticompetitive effect.”

Courts’ concerns stem from the reasonable notion that not every instance of false advertising violates antitrust law. And (usually implicitly) they have worried about applying antitrust’s robust remedies of treble damages and attorneys’ fees. These courts fear that antitrust liability will disincentivize companies from engaging in advertising that is merely questionable and that might provide useful information to some consumers. But false advertising law preserves a robust space for puffery and debatable opinions; overdeterrence concerns don’t justify analysis that is inconsistent with both the economics and psychology of advertising and that, at a minimum, essentially makes it impossible to bring a successful antitrust case based on false advertising. Nor do the Lanham Act’s remedies for false advertising fully address harms to competition. Reasoning that conduct that is already illegal on other grounds need not concern antitrust law ignores the multiple other contexts in which breaches of non-antitrust laws are considered to be potential antitrust violations.

We begin by introducing the laws of antitrust and false advertising, explaining the regimes’ objectives and methods. We then survey the antitrust caselaw, critiquing three approaches courts considering false advertising claims have taken. Finally, we introduce our antitrust framework for false advertising claims. At the heart of the framework is a presumption that monopolists engaging in false advertising violate antitrust law, with that presumption rebuttable if the defendant can show that the false advertising was ineffective. The framework also applies to cases of attempted monopolization by incorporating factors (falsity, materiality, and harm) inherent in false advertising law, along with competition-centered issues on targeting new market entrants and entrenching barriers to entry. To illustrate how our framework should work, we apply it to an important area: advertising for biosimilars, which are pharmaceutical products with a substantial and growing role in treating numerous diseases.

False advertising that exacerbates monopoly power has been dismissed by antitrust law for too long. This Essay seeks to resolve the contradiction in the law by showing how false advertising threatens the proper functioning of markets.

Reading list: Discrimination is Unfair: Interpreting UDA(A)P to Prohibit Discrimination

Stephen Hayes & Kali Schellenberg, Discrimination is "Unfair": Interpreting UDA(A)P to Prohibit Discrimination

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3832022

This Article explores a theory that discrimination is a type of “unfair” practice covered by federal and state laws prohibiting unfair, deceptive (and sometimes abusive) acts and practices (“UDA(A)Ps”). An “unfair” practice is defined by statute as something “(1) likely to cause substantial injury to consumers; (2) which is not reasonably avoidable; and (3) that is not outweighed by countervailing benefits to consumers or competition.” Discrimination fits neatly within this statutory language, and its incorporation as an unfair practice is consistent with the purposes and traditional guardrails around application of UDA(A)P law, as well as general principles in civil rights jurisprudence

 

Applying the “unfairness-discrimination” theory would fill important gaps in the existing patchwork of antidiscrimination laws, which currently leave large swaths of the economy unregulated and unprotected from a variety of discriminatory practices, including those with a disparate impact. By taking seriously the plain language of UDA(A)P law, federal entities like the CFPB and FTC, state attorneys general and agencies, and in some cases private individuals, could make great strides towards ensuring that entire markets and industries are not free to discriminate.

Reading list: The Kids Don’t Stand a Chance: Unfair and Deceptive Advertising in Children’s Apps

 Mary Kate Fernandez,  The Kids Don’t Stand a Chance: Unfair and Deceptive Advertising in Children’s Apps, 66 Loy. L. Rev. 211 (2020)

Intro: 

The University of Michigan released a startling study (“the Michigan Study”) in October 2018 which unveiled that “manipulative and disruptive” advertisements are deceptively built into phone applications (“apps”) designed for children. The results of this study led members of the United States Senate and several public interest groups to petition the Federal Trade Commission (“FTC”) to investigate apps marketed specifically to children. The current federal administrative regime for regulating deceptive advertising targeted at children, however, falls far short of what is necessary to enable the FTC or any other federal agency to respond to the revelations in the Michigan Study with meaningful protections for children.

A striking passage on host selling:

This advertising practice, illegal during children’s television programming, is fundamentally unfair to child consumers. Yet, multiple apps designed for children heavily employ host-selling.

 For example, in PAW Patrol: Air and Sea Adventures, the commercial characters are not only the object of gameplay but also have interactions with the user. Characters make faces indicating feelings of disappointment when the user does not click on locked items that require payment. App characters also show disapproval when the player is unable to accomplish a certain mission because he did not make a required purchase. The Michigan Study stated that such tactics “could be characterized as social pressure or validation” and “may also lead children to feel an emotionally charged need to make purchases.” In Doctor Kids, the main character bursts into tears if the player does not make an inapp  purchase. In Barbie Magical Fashion, Barbie narrates and specifically encourages users to use “locked” items that require making a purchase. 

Most problematic of the host-selling examples was Strawberry Shortcake Puppy Palace. In this app, Strawberry Shortcake instructs users to choose a puppy to play with, but only one out of eight puppies can be played with for free. Every other puppy is locked. If the child selects a locked puppy, Strawberry Shortcake says, “Oops. To play with [name of puppy], you’ll need to get the puppy pack. Or you can unlock everything and get the best deal.” Throughout the game, Strawberry Shortcake has thought bubbles. Some tell the user that the puppy is sad, and the user should give the puppy what it wants. But oftentimes the item that the puppy “wants” is locked, and when the child selects it, Strawberry Shortcake tells the child to buy “the activities pack to keep the puppy happy.”

Misinformation, Disinformation, and Media Literacy in a Less-Centralized Social Media Universe

Knight First Amendment Institute, Reimagine the Internet 

Great panel today; more to come the rest of the week and they will shortly post the video. 

Francesca Tripodi (UNC) shared her amazing research about how conservatives use textual interpretation techniques to interpret information and reject journalistic interventions. Conservatives then use and trust Google’s top results, believing that Google top results reflect reality, which seems a bit contradictory to me. The problem is that our keywords are ideological, so Google searches confirm one’s worldview: searching for “illegal aliens” gets you right-wing sites that confirm what they already believe, while “undocumented workers” produces very different results. And it’s not just Google—DuckDuckGo is better for your privacy but returns the same type of results based on ideological keywords. Google suggestions create the possibility of parallel internets that are invisible to outsiders. “Data void”: limited/no content is available, so it’s easy to coordinate around keywords to guarantee that future searches are directed to content that includes these terms—this is what happened to “crisis actor.” Search engines are not designed to guide us through existential crises or challenge our beliefs—the notion of relevance is subjective and idiosyncratic as well as unstable and exploitable. Knowing/understanding audience concerns and amplifying key phrases allows conservative media to drive users to search where their beliefs will be reinforced. Like Council of Conservative Citizens reaching Dylann Root in his searches for black on white crime. They encourage viewers to “do the research” while highlighting phrases that lead to the preferred sources. So Google started autofilling “Russian collusion” with “delusion,” a phrase promoted by Roger Stone. In impeachment proceedings, Rep. Nunes used his opening remarks to repeat a few names/phrases and tell us that we should be paying attention to those—which, when searched in Google, linked to Fox, Daily Caller, and even more right-wing sources. Urged constituents to do their own research. Nelly Ohr: a perfect data void/litmus test. She used to work for Fusion GPS and is part of a conspiracy theory about Russia investigation—the search exists in a vacuum and was curated by conservatives as a dogwhistle about election fraud.

What can we do? How can Google fix this? It’s important to stop thinking about a fix and focusing on Google. Misinformation is not a bug in the code but a sociological issue. The only way to circumvent misinformation traps is knowing the kinds of Qs people seek answers to, knowing how they interpret information, and knowing how political actors exploit those things. [Easy-peasy!]

Barbara Fister, Gustavus Adolphus College: In practice, students are treated as information consumers who need to be educated to examine claims. At universities, they are often treated as needing help finding information in the walled garden of the library, focusing on information that will help them satisfy professors. Libraries have felt compelled to emulate Google and create single-search boxes. But the results don’t help you navigate the results, so it’s no wonder that students come up with workarounds. Students have trouble getting themselves situated. They adopt a strategy and stick to it; look for “safe” sources; often don’t really care about the topic because it’s been assigned. Follow the news, but don’t trust it; don’t think college does much to prepare them to ask questions of their own. Feel both indignation and resignation about algorithmic systems invading their privacy. Students feel that they’re in a very different place than professors; they’re used to different sources. “We grew up with untrustworthy sources and it’s drilled into us you need to do the research because it can’t be trusted.” Students are already being taught “media literacy” but more of the same won’t necessarily help, because people who believe misinformation are actually quite “media literate” in that they understand how these systems work and are good at manipulating them. Qanons understand how media/info systems work; they interpret media messages critically; they feel passion for discovery and enjoy the research b/c they feel like they’re saving the world. Alternate authority structure: trust yourself and trust Trump/“the Plan.”

What is to be done? Deep-seated epistemological differences: if we can’t agree on how we know what’s true, hard to see common ground. So what’s next? Recognize the importance of learning to trust, not just to be skeptical; get at why to trust rather than what to trust—saying “peer-reviewed research” doesn’t help; explore underlying values of knowledge systems, institutions, and practices such as journalism’s values; frame learning about info systems as education for democracy: you have a role to play; you should have an ethics of what it is that you will share. Peer-to-peer learning: students are learning from each other how to protect privacy etc. Students are concerned about their grandparents and about their younger siblings—interested in helping other age groups understand information.

Ethan Zuckerman, moderator.

Fister: Further reading: Information Literacy in the Age of Algorithms—what students are interested in that doesn’t come up in class: knowing that Google works by using the words we use rather than as a neutral broker would be very important! Alison J. Head (January 5, 2016), Staying smart: How today’s graduates continue to learn once they complete college; Project Information Literacy Research Institute, Alison J. Head, John Wihbey, P. Takis Metaxas, Margy MacMillan, and Dan Cohen (October 16, 2018), How Students Engage with News: Five Takeaways for Educators, Journalists, and Librarians, Project Information Literacy Research Institute.

Tripodi: People would say “I don’t trust the news” and she’d ask where they got candidate info; they say “Google,” without acknowledging that Google is an aggregator of news/taking content directly from Wikipedia. We’re not in a new time of epistemological fissures or polarization—we have always been in a place of big differences in how we seek truth, what are sources of knowledge, how we validate knowledge. What’s changed: we can connect from further away and we have an immediate ability to determine what we think is right. Focus on keywords is something that work on filter bubbles hasn’t yet considered—it’s not the tech that keeps us in the filter bubbles; we are the starting point for that closure.

Zuckerman: the people who find hate speech on YouTube are the people with hateful racial attitudes—so the polarization argument may not work the way we thought.

Fister: the power to amplify and segment market messages is way more pronounced now. But it was deliberate fissure with the rise of Fox News, talk radio. Amplified by platforms that like this content b/c controversy drives attention. Far right white supremacists have always been good at tech—used film early, used radio; they are persuasion machines designed to sell stuff. They are earning money while using the platforms, which has changed the velocity/amplitude of the most hateful speech.

Tripodi: There may be ways to figure out the keywords that resonate with people’s deep stories, to find the data voids, by doing more ethnographic work. The narrative that conservatism is being silenced: trying to reshape objectivity as “equal balance.” Rebranding of objective to mean “both sides.” If your return doesn’t show equal weight, it’s somehow flawed/biased/manipulated [at least if your side isn’t dominant]—that’s leveraged in the rightwing media ecosystem to say “don’t use these platforms, use these curated platforms that won’t ‘suppress’ you.” That’s complicating notions of media literacy, which sometimes uses “look for both sides” as an indicator of bias. Propaganda campaigns are now leveraging the idea of “lateral reading”—looking for relevant phrases around the target of interest in a new window—these systems are being deliberately exploited. Thinking about keyword curation may help: you could put a bunch of “Nelly Ohr” all over mainstream coverage of the impeachment. Old fashioned SEO manipulation in a new light.

Fister: discussion of the tautology underneath this: you trust the sources you trust b/c you trust them. People create self-reinforcing webs of trust by consulting multiple sources of the same bent. Students are also interested in talking about how algorithms work, including for sentencing people to prison; tie that to traditional values/understanding of how we make knowledge.

Tripodi: in response to comment on similar dynamic on doctor/patient relations: when people search “autism treatment” they are more likely to see non-evidence-based treatments, because doctors with evidence-based treatments are not using YouTube. Has a student who is trying to create a lexicon for doctors to tell people “research these treatments”—you can’t tell them not to search, but you can give them phrases that will return good quality content. Also important to make good quality content for evidence-based treatments. People are looking on YT; have to be there.

Zuckerman: that requires auditing the platform; YT is not that hard to audit, but FB is when it directs you to content.

 

Today's IP artifact: Cuervo bottle with dripping red wax seal

 This decision remains one of my least favorite, but perhaps I will nonetheless get a bottle of Maker's Mark to pose beside it.