Organization for Transformative Works submits comments on remix to PTO/NTIA

Or, what I did while not on summer vacation.  An extended discussion of why transformative, noncommercial works and cultures are valuable and deserve legal protection in the copyright regime. Conclusion:  "However the copyright reform project proceeds, it is vital that it not ignore the legitimate interests of the remixers who are working in every form of media. They are the future of our culture.  Artists, not lawyers, should determine the shape of works to come."

Research post available at University of Cambridge

Lionel Bently passes on the following: a 2 year research post studying questions of newspapers, digitisation and copyright, is available at the University of Cambridge. 

Surveys in defamation cases?

Eriq Gardner at THR Esq. rightly flags this tantalizing tidbit about Tom Cruise’s pending defamation lawsuit (okay, I have a very specific definition of tantalizing; don’t judge me).  Cruise conducted a survey to figure out how readers would interpret the claims at issue.  From the papers: 

Defendants are certainly free to argue that their cover headlines are mere 'opinions' of how Suri was feeling in the wake of her parents’ divorce. Plaintiff is likewise entitled to demonstrate that any reasonable reader would interpret Defendants’ headlines as conveying a verifiable statement of fact about Plaintiff’s conduct. Indeed, Plaintiff has already submitted survey evidence to Defendants showing that a majority of readers in fact interpreted the headlines 'Abandoned By Daddy' and 'Abandoned By Her Dad' as conveying the message that Plaintiff cut Suri out of his life altogether and on a permanent basis – i.e., that he had severed his relationship with her and they no longer had any contact whatsoever. Conversely, less than 4% of readers understood the covers to communicate anything about Suri’s feelings.

I've never heard of a survey in a defamation case before, but I suspect surveys in defamation cases will have the same problems of manipulability that they do in Lanham Act cases.  It’s an interesting (and likely expensive) development nonetheless.

November 21st: WIPO Dir. Gen. Gurry at GW Law - Lecture and Live Webcast

The George Washington University Law School Intellectual Property Law Program cordially invites you to attend a lecture by The Honorable Francis Gurry, Director General of the World Intellectual Property Organization

"Intellectual Property Policy in the International Economy" 

The role of intellectual property (IP) in the world we live in today – a digitized, interconnected world – is vastly different from the world in which the IP system has its roots.  The digitized, interconnected world creates vast benefits, but changes have come so fast that the legal infrastructure around IP struggles to keep up.  The role of the World Intellectual Property Organization (WIPO) is to work with its Member States to ensure that the system does keep up, and stays relevant. 

WIPO Director General Francis Gurry will provide an overview of the evolution of intellectual property and how WIPO’s work program identifies policy responses to fast-shifting IP landscape.  The Director General will discuss, inter alia,  WIPO’s recent accomplishments, such as treaties on the rights of audio-visual performers (2012) and access to copyrighted material for the visually impaired (2013), and future activities, such as a proposed design law treaty and protection for traditional knowledge. 

Thursday, November 21st, 6:00 p.m.

The George Washington University Law School

Faculty Conference Center

5th Floor Burns Building

716 20th Street, NW

Washington, DC

Reception to Follow

The lecture will also be live webcast at: http://video.law.gwu.edu:8080/ess/echo/presentation/f8652ca5-4138-41f4-a280-33976f37af90

Law in an Age of Disruptive Technology, Georgetown Law Journal Symposium

3D Printing 

Moderated by Rebecca Tushnet • Georgetown University Law Center

Deven R. Desai & Gerard N. Magliocca, Patents, Meet Napster:  3D Printing and the Digitization of Things

Deven Desai is a law professor at the Thomas Jefferson School of Law and just completed serving as the first Academic Research Counsel at Google, Inc. Gerard N. Magliocca, Professor of Law & Associate Dean for Research  at Indiana University School of Law.

Desai: Digitization: business and legal change together = disruption.  Already happened with copyright—moving into other areas.  Different possible futures: working with change or replaying the copyright wars.  Three levels of manufacturing: home, start-up, large factory.  Freedom to make anything you want at all those levels—at home, already using 3D printing to play with toys. But Mattel may not be thrilled when people reconfigure Barbie.  Rapid prototyping for startups: excess talent/crowdsourcing used to make/improve a car design. At the high end, GE Aviation bought a 3D printing company to make precision parts for jet engines.

Current setup is for tinkerers—open source, user friendly (for certain values of “users”) and prices are coming down fast.  Revolutionary products have a growth phase: if this is like early computers/early web, it’s tipping to where ordinary people can use it. $3500 printers; Staples has an intro one for $1200.  There was a moment when you’d run to Kinkos to print—UPS has a pilot program for 3D printers on the same model.

Lego spoon designed to connect with real Legos; auto parts; etc.  But there are plenty of hiccups both practical and legal. Designs copied may be covered by copyright or patent; designs could eventually be made at full scale.  Could even print food!  Or guns, as others have noted.  Guns are regulated in various ways—including by patent.  Current printed gun doesn’t last very long.  But it will keep improving.  That’s the challenge.

Magliocca: Patents: there will be a lot more infringement, particularly by homes/small businesses, when 3D printing rises. What should Congress do? Go down the copyright road, trying to shore up patent protection by increasing penalties for infringement/new causes of action/new remedies. This is probably what many in patent industries will lobby for. It was futile then and futile now, which doesn’t mean it won’t happen.  Congress could also do nothing, which would be better but still leaves luckless individuals sued for patent infringement, made examples of.  Chilling effect/unfair in light of overall nonenforcement.  Congress could also create an exemption for things that are printed by 3D printers for personal use.  An exemption could be substantive, or procedural (bar remedies against individuals).

DMCA notice and takedown: defense to intermediaries that take certain actions in response to complaints.  That would help address the home infringer as well. Also possibly an experimental use exception, though it’s construed too narrowly to help almost anyone now: Fed. Cir. could revise its interpretation (or be instructed to do so).

That’s patent, but copyright is also implicated: you can make your own Harry Potter figurine. That’s not as dramatic given what we’ve already seen with copyright, mp3s and such.  But software copyrights used to make 3D printed objects are a potential issue.  Originality as an issue?   Is there merger between the idea of making an Easter Island head and what the program does (making an Easter Island head)?  People have very strong reactions to this question of merger.  Copyright doctrines may need to change.

Also, briefly, trade dress will also increase in infringement as people can make Coke bottles at home: implications for value of trade dress as marketing tool.  If people see bad-looking versions, do they attribute that to the brand (post-sale confusion)?  In a world of 3D printing, seeing something in someone’s house may not trigger any thought that it is attributable to the original TM owner.

Comments: Michael A. Carrier, Distinguished Professor, Rutgers School of Law

Innovation needs attention, not just “piracy.”  What does the law do facing new technology? His empirical survey of CEOs/VPs in music industry provides lessons for innovation in 3D.

Innovator’s dilemma: large well established companies are likely to pursue sustaining innovation—incremental improvements, tweaking the status quo and appealing to existing customers with short-term payoffs. Not interested in destructive innovation, radical breakthroughs that upset existing business models. Upstarts do that.  Music labels were victim of innovator’s dilemma—considered digital to be a passing fancy; focused on short term—executives worried about bonuses; 5 years from retirement and didn’t want to rock the boat.  Similar concerns: established companies have the most to lose from 3D.

Sky is falling: every time we see a new tech, it’s the end of the world as we know it.  Sheet music publishers hated player pianos. John Philip Sousa feared deterioration in American music from player piano; Jack Valenti of MPAA said the VCR was the Boston Strangler.  These were mistakes.  But new tech taking direct aim at existing business model provokes fear.  Maybe some fears are legit with guns, but expect the sky is falling narrative no matter what.

Napster as service: litigation empirically stifled innovation, caused venture capital to dry up. Napster allowed trading individual songs, which we now take for granted. That was no sure thing in 1998.  Executives: admitted they padded albums; Napster brought about a new way of consuming music that broke open the record label model, forcing them to embrace a new type of presentation to the public.  There are new possibilities 3D printing can bring about that could revolutionize consumption.

User innovation: Eric von Hippel has emphasized that users innovate in ways that contrast with manufacturers—users customize to their needs/desires; many manufacturer innovations fail, so coming from the users can be very valuable/exciting.  Rich literature there on which to draw.

Amateurs: last 15 years have shown that amateurs can do a lot they couldn’t do before at every stage of the creative process. Creation: GarageBand and iMovie.  Selection: no longer limited to music label’s A&R.  Still a role for that, but also for bottom-up.  Production and dissemination, likewise.

Why does innovation get lost by the wayside?  Innovation asymmetry: infringing uses are definable/threatening, take direct aim at copyright owners. Noninfringing uses are less tangible, not advanced by army of advocates, less obvious at onset of technology.  History of inventors who didn’t know how their products would be used: Alex. Graham Bell thought the phone would be used to broadcast news; Edison thought phonographs would record deathbed thoughts; railroads were supposed to serve canals; IBM thought there was a market for 10-15 computers. 

Lesson: Congress should stay out of the way; courts should err on side of allowing uses rather than trying to stamp out every instance of infringement, which won’t work anyway.

Michael Weinberg, Vice President, Public Knowledge,

3D printing takes people away from computer screens and back into the real world. Internet has trained a lot of people in how to think about IP. 20-30 years ago most people didn’t think about IP at all; then computers/internet happened and IP became more salient. The thing that will be striking in the physical world is that the world is full of things that have no owner, aren’t protected by IP.  Many things are, but the ratio is different.  For a lot of people, that takes a major readjustment of your worldview.  There are things that are freely copiable/integrable into another project.

When people realize that, many things happen. The free universal construction kit: designed to interconnect many toys, from Legos to Lincoln Logs.  Patented at one point, but patents expire.  Make 7/8 boxes of toys into one big box.  Why not?

Old sculptures in the public domain: they may feel more new/relevant than old books in the public domain—sculptures from 500 years ago do not date in the way that paintings and songs have.  The public domain of physical things feels different.  Metro. Museum of Art is scanning its collection, and people can mash it up: put your face on a sculpture. Slow process of realizing, not in a super activist way, that we can re/create culture. Innovation will be unanticipated.

Internet copyright conversation largely started from the assumption that the things at issue were protected by copyright.  Went to fair use, etc., but fundamental protectability was basically assumed from the start. 3D printing is different: we need to back up a step and ask about protectability.

Tushnet: I was struck by the paper’s descriptive claims: “Today, if you buy a doll, a Lego set, or a car, the ability to alter, tinker, or improve your purchase is low. 3D printing, however, opens the door to personal improvement. You still buy the doll or dollhouse; but once a child is bored, 3D printing allows you to design and create new heads, limbs, or furniture.”  I’d suggest more focus on affordances and how technology changes the salience and visibility of options: resculpting Barbie was always possible; you could always chop the doll’s hair off, make her new clothes, or even melt her limbs in the toaster; you could always build dollhouse furniture; we (lawyers) just didn’t notice it or think it was important for the law to grapple with the possibility. Same as fan fiction, fan art, Batman in the backyard.  (Mike Carrier: some amateurs made remix video throughout much of the 20^th century. We just didn’t know about it until the internet hit.)

Authors and commenters suggest that there’s a lot of untapped desire for customization:  the paper uses the example of sales of soda mixers.  Suggested explanation: people have different flavor preferences, and thus customization is of value to them.  My suggestion: this account may be enriched by a more social explanation—consider the history of cake mixes, where mixes without eggs sold well not just because they produced better cakes but also because they satisfied a need in some bakers to participate in the process.  Laura Shapiro, Something from the Oven: Reinventing Dinner in 1950s America.  What box cake makers did was convince women that the key participatory moment came with decorating the cake, customizing it, personalizing it.  3D printers, to the extent they catch on, may succeed not just by satisfying preferences but by creating and shaping preferences for how one’s possessions are configured.

Related: the descriptive claim is that consumer can now decide what Lego looks like: the related question will be what kind of licenses will be available.  Rather than just licensing their own files, I expect copyright and trademark owners will wish to get control of files created by others, using their claimed rights as leverage to do so.  Compare Amazon Kindle Worlds: an attempt to move noncommercial production into the commercial world through licensing—no consistently and overtly asserted oversight of the actual production, but attempts to collect money at the point of distribution (which could be, here, the distribution of designs). 

Also, authors note that consumers may seek more assurance that they’re getting the “real” thing, whatever that means, and not something printed out at home by the seller.  Consider then the potential of ID numbers and objects that phone home not (solely) to control the purchaser in the seller-purchaser dyad, but to authenticate the purchaser to third parties.  We are status-seeking animals; people may be willing to surrender personal information if it means that their friends can verify that their Gucci is real by scanning the QR code.

As for proposed DMCA analogue for 3D printing patent/TM claims: Not so sure that authors are right that the DMCA notice and takedown scheme is agreed to be working “reasonably well”; there are plenty of howls about it, which is part of how we got SOPA/PIPA and the content industries are not done yet.

Desai: DMCA is problematic, but what are the alternatives?

Carrier: notice and takedown is a lot better than the possible alternatives.  It at least is geared to the specific copyrighted work at issue, with a process available for dispute. Going beyond to places like SOPA/PIPA and TPP where we’re willing to punish any tech that enables/facilitates infringements or aids and abets liability (TPP). That can take down just about everything without much notice.

Weinberg: is printing practicing the patent?  Even if so, it’s not infringement to host the description of practicing the patent.  Liability should not necessarily be assumed.

Carrier: music file is instantaneous, but here there is more work involved in actual printing. Extra friction slows things down compared to music files.

Magliocca: at what point does the scale become so great that action is reqiured. You could make your own gun at home now with the know-how, but not that many people do.  (Weinberg: more people do it with lathes & milling than you think.  One feature of these debates is that you discover many many communities of practice doing stuff already—the ATF even has a regulatory framework; it was a solved policy problem in many ways.)  Ok, not enough people do to trigger a general regulatory response.

You can make a Coke label with a color copier.  It’s not a difference in kind, but a difference in degree.

RT: this gets to licensing as a solution: if you make universal licensing possible, then the content owner can say that no legal reform is necessary; if you don’t have a license, your website should shut down.

Desai: note that even streaming is a possibility: licensors could stream files to printers and contractually bar copying/alteration.

Weinberg: music licensing people react to the idea that people won’t need licenses for 3D printing by saying “look, we’ll license everything—we’ll put a package together.”

Desai: we are trying to create spaces where individuals are protected.  Thingiverse and Makerbot have weird notice and takedown policies—trying to act in good faith but not get crushed. Clearer statement/legal recognition.  If the VCR has substantial noninfringing uses, so do these.

Audience Q: shift in copyright from possession to use. People don’t care as much about owning tracks if they can always listen to it.  Is that transferable to 3D printing, which is at its core is about possession?

Carrier: Music is different because of the repeated play.

Weinberg: Ownership and control of physical object in way you don’t have with iTunes track. Reverse engineering is becoming increasingly simple. So even if you can’t hack the stream, you could copy the object. How effective is the license then?

RT: People rent cars and houses.  Why not watches?

Weinberg: why would the owner ever come after you at the end?

RT: well, enforcement ability changes—could bar you from selling on eBay.  Sometimes the claims made—we’ll protect individuals but discipline institutions—seem to work against the alleged transformative potential of the technology itself.

Q: what about a private use exception?  If yard sales won’t ever be covered, is there extra value?

Magliocca: it could be mostly symbolic: showing that this is okay.  Copyright litigation against individuals didn’t seem to do much in the end, though innovation was inhibited in terms of investment/risk averse entities.  Could be fighting some chilling effect. For those unlucky few who are found out, could change things.  The remedies are pretty severe here.

Carrier: the remedy is a central part. Copyright’s statutory damages are a really big deal. 

Weinberg: legitimizing the market: selling to individuals becomes possible. 

RT: notice that one of the paper’s proposals wouldn’t do that by barring individual liability but still allowing them to infringe.

Q: what about protecting creators? The panel seems in agreement, but many people aren’t interested in innovating, they just want to copy.

Weinberg: creators do already have rights in the present system. They can be enforced now. The lesson of the last two decades is that you can sue particularly bad actors, but your best solution is to make access to legitimate works really simple.  There is a role for infringement lawsuits, but economically the better way to use your resources to police your rights and maximize your revenue is to think about distributing as easily as possible.

Carrier: scale.  If your sculpture is copied by one person at home, that’s a very different effect than someone copying it to sell on the market.  Innovation is the best way to deal with infringement; if you made a better product, people wouldn’t be interested in the pirate copy.  People want relationships with artists.

Magliocca: 3D printers are not replicators. They have limits on size, materials, and skill. They will continue to improve, but there’s a way to go. There’s always a war within consumers between desire for customization/free stuff and their laziness. Download from the company’s website is simpler than having to find it somewhere else and risk the file being wonky.  Authenticity (whatever that means) means something to many people.

Q: people printing toys that aren’t safe for children/could have hazardous parts or materials. Innovation may be wonderful, but what do we do with that kind of shifting of risk/liability?

Magliocca: product liability for homemade/manufactured goods—at one level, there ought to be no difference if a defectively designed product injures someone. But should homemade toys come with warnings? We expect more of commercial manufacturers.  Exposing more people, including children, to risk.  There may be visible examples where things go wrong—need to look both at designs and materials.

Desai: Etsy—people have come to understand that handcrafts are different than mass-produced items.  Laziness factor—where brands/TMs come into it. Mattel might change its business, so it can supply materials as well as designs, and provide security in that way.

Carrier: deal with it ex post rather than possibility of harm. Find the market failure and deal with it then, otherwise we’ll never know what we’re missing.

Weinberg: Nora Engstrom of Stanford wrote a great paper on these issues.

Bernt Hugenholtz on Flexing Authors' Rights

American University Washington College of Law Program on Information Justice and Intellectual Property, The 2nd Annual Peter Jaszi Distinguished Lecture:

Professor Bernt Hugenholtz - Flexing Authors' Rights

Many countries lack fair use or fair dealing.  Adopters include Korea, Israel.  Authors’ rights countries without fair use can be very restrictive: can’t show copyrighted content in powerpoints at a public lecture—educational freedoms tend to be old-fashioned and highly restrictive.  Briefly showing in news reports images from an art exhibition—endless cases about this in France.  French right of quotation only covers fragments, which can’t be done with art.  Using short clips in documentaries is also a problem.  Documentary: not reporting the news; not quoting—falls in between exceptions.  Posting remixes on social media.  Parody of children’s character: successfully sued in Netherlands. Digitizing/indexing content for data mining/operating search engines: No exceptions in Europe come even close.  Google has seen increasing number of court cases, some of which it’s lost in parts of Europe, particularly Belgium and France. Shazam music recognition software: not allowed. Lack of flexibility in exceptions.

Fair dealing is much more limited than fair use.  Exhaustive/closed list, but with some flexibility around the edges depending on the country.  France has a very small list.  Others have more, but the list is still closed.  Quotation, news reporting, some private uses, some library uses.  Info Society Directive enumerated 21 types of limits/exceptions members may have in national law, mandating only one. Doesn’t allow anything beyond the list—anything not foreseen in 2001.  Search engines aren’t on the list.

Why no fair use? Civil law tradition.  Judge should only apply codified law.  Also, author’s rights offers different rationale than copyright system. Strongly favors authors over users. Exceptions are to be narrowly construed. There are also worries that flexibility would decrease certainty—open the floodgates.  Fear of US legal imperialism, too.  Do not underestimate this sensitivity.  There are also people who argue that international law does not allow fair use—conflict with Berne/TRIPS.

Do recognize increased need for flexibility in Europe.  Legislator can’t possibly respond adequately to fast pace of change; codifying everything precisely is outdated or ineffective. We must anticipate change that we cannot predict by providing for more abstract, flexible, and open norms.  European law requires two levels of change, national and directive—very slow response time.

Looking at traditional arguments against flexibility:  not a new problem for civil law, which elsewhere has abandoned the idea of pure codification.  The essential elements of civil law today involve a handful of general principles including fairness and reasonableness.  Balancing property rights with other rights, freedoms.

Certainty: fair use isn’t as wild and unpredictable as its critics here and in Europe claim. There is a coherence—Lee, Samuelson, Netanel have written about this. Conversely, civil law countries without flexibility, in desperation, resort to all sorts of doctrines outside of copyright trying to save the day—so much for predictability. German SCt 2010, Google Image Search/thumbnails: Perfect 10 without the naughty bits. Cook up a theory of implied consent, if you don’t use robots.txt.  Reasonable, but would have been much better if the result could be reached by applying copyright norms properly.  Rigidness therefore undermines certainty. 

Those who don’t like more flexibility often refer to the three-step test.  But that can be turned around: three-step test prevents opening the floodgates.

Not arguing for full US transplant; that rarely works.  Flexibility is different. Even Info Society directive, with its closed list, says flexibility is important—and many of the items on the closed list are actually rather open-ended. Quotation exception: for purposes “such as criticism,” which leaves lots of room to maneuver.  France interprets this restrictively, but Sweden interprets it broadly—comes close to a fair use rule for quotation to the extent necessary for the purpose, in accordance with proper uses.  Another exception: “incidental inclusion of a work or other subject-matter in other material.” Could use for documentarians.  “Caricature, parody or pastiche”—not even the French can define pastiche; could call user-generated content pastiche—again, room for maneuver.

What about the 3-step test? Flexible norms can be reasonably predictable, not all encompassing, and not unduly harm authors/rightholders.  No one has ever complained to the WTO about the US fair use rule—so why are we worrying? Promising developments, though mostly from civil law countries—Ireland recommended fair use; Australia is in a debate over fair use now.

What kind of flexibilities could work in an authors’ rights system?  More room to move inside existing limitations—Dutch copyright commission has proposed this.  UGC could be seen as quotation—just call it that!

More principled approach, flexibility alongside circumscribed limitations—an open norm complementing existing set of limitations.  Korea: a civil law country. 2011 revision introduced such a rule. Ireland is contemplating it.

European Copyright Code: proposed by academics: uses comparable to enumerated uses should be allowed subject to the 3-step test. This model would work very well in authors’ rights countries and common law jurisdictions too.

Who cares?  Chilling effects on institutional users, innovators, authors. Increasing gap between social norms and law undermines social legitimacy of copyright.

Q: what about moral rights? Are they a barrier?

A: No.  Relatively unimportant to exceptions/limitations. Already in European laws—could make norms subject to respect for moral rights. Political level, there is an argument: the absence of moral rights in the US is a constant source of irritation in trans-Atlantic relations.

Q: sometimes institutions in the US aren’t flexible either.

A: certainly need for norms of fairness between authors and intermediaries: the US could learn a lot from Europe there—Germany, France, Belgium, Spain have rules protecting authors against overbroad transfers.

Q: true no one has sued us under the WTO, but the US isn’t known for complying with the WTO anyway; would they bother?  Would other European countries accept Euro. loosening?

A: not sure that it’s even possible for one European country to use the WTO against another.  But a US rightsholder might theoretically sue.  Doesn’t see it happening, given the de facto precedent and the history of the 3-step test, purposefully constructed to embrace all existing exceptions/limitations, including fair use, since the thought had occurred that someday the US might join.

Maxim suffers from max delay

Alpha Media Group, Inc. v. Corad Healthcare, Inc., No. 13 Civ. 5438, 2013 WL 5912227 (S.D.N.Y. Nov. 4, 2013)

AMG, which publishes Maxim magazine, sought to enjoin Corad from marketing a Maxim antiperspirant.  Maxim is the core of a “lifestyle” brand featuring travel and entertainment. The mark has been licensed for a number of “lifestyle goods” such as playing cards, restaurants and bars, nightclubs, beauty contests, beer mugs, and bottle openers.  Maxim most commonly displays its name in red, capital letters; AMG has seven MAXIM trademark registrations.

Corad’s antiperspirants treat hyperhidrosis (excessive sweating).   It’s used the Maxim mark since 2001, registered for unscented antiperspirants in 2003.  Since 2003, it’s sold unscented roll-on and wipes in blue boxes with MAXIM in white, capital letters and a photo of a man and a woman, along with a caduceus and notes that it is “prescription strength” and “doctor recommended.” Since 2006, it’s sold unscented wipes for regular skin in a black box with MAXIM in red, capital letters. This box includes four pictograms “denoting travel, golf, exercise, and gym.”  (I.e., activities one might want to do without sweating excessively.)  Corel’s scented wipes are sold in a package with an ® marking, even though that product is outside the registration; Corel agreed to move that marking.

AMG intended to license MAXIM for body sprays, perfumes, and colognes. Though it was aware of Corad’s use of the Maxim mark, it only learned of Corad’s current packaging when it prepared to launch its own line of scented products, and also only recently learned that Corad was marketing a scented Maxim antiperspirant. 

AMG argued that Corad’s packaging “no longer reflects a medical product, but instead is impermissibly evocative of Maxim magazine’s lifestyle brand by using red letters on a black background, a photo of a couple, and the pictograms.”  It also argued that use of the ® constituted false advertising.  Ten weeks after learning about Corad’s packaging and scented product, it sued.
The court declined to grant a preliminary injunction, for want of irreparable harm.  After eBay and Salinger, a court can’t simply adopt categorical rules or presume that a party has met an element of the injunction standard, revising the previous law that preliminary injunctions should usually issue when the court finds likely confusion.  AMG’s assertion that Corad’s products cause consumer confusion and cause AMG to lose control of its reputation was “bare bones and conclusory,” and insufficient under Salinger.  It’s still true that likely success often foretells a finding of irreparable harm, but AMG provided “no reason to believe irreparable harm will in fact occur.”

And there was good reason to believe the contrary.  “Corad does very little marketing and directs its products at a small consumer segment. There can be no irreparable harm when very few consumers are likely to encounter Corad’s products, even assuming they do create a likelihood of confusion as to their origin.”  AMG itself, with its “strong interest” in tracking the use of “Maxim,” didn’t learn about the packaging for years after its first use. AMG itself argued that Corad didn’t conduct any advertising that AMG would have reason to see and didn’t have much in the way of sales or distribution.  “While these arguments may help negate a laches defense, they also diminish any possible inference of irreparable harm.”

AMG also itself told the PTO in its application to register the mark for scented products that  Corad’s product “is not a perfume but a product which is sold to a small group of people who have an excess sweating condition” and that “Corad’s products are sold almost exclusively through websites that it owns or operates.”  AMG argued that its plans to license a fragranced product now produced irreparable harm.  “But AMG’s own plans will not increase the visibility of Corad’s non-prescription medical products, marketed to a niche group of consumers.”

Corad’s multi-year use also negated any presumption of irreparable harm because “any harm caused by Corad’s packaging has likely already been inflicted.”  The elements of which AMG complained had been in use since 2003 for sensitive skin and 2006 for regular skin.  So far, AMG still had control of its reputation, and there was no reason to believe they’d caused confusion.  “It is difficult to see how AMG would now suffer irreparable harm if they remain on the market for the comparatively short time it will take to resolve this matter.”

Chat rooms in history

The Boston Globe's 1960s Confidential Chat has it all, from pseudonyms to flame wars about women who worked outside the home v. women who didn't.  The more things change ...

Full-Time Homemaker No Longer Justified?: Confidential Chat, Boston Globe, Feb 11, 1964.

Can't use your phone on your Delta flight? Blame trademark licensing!

Slate reports on the fact that many Delta-branded planes aren't really Delta planes, but operated by lower-paid carriers, and thus not yet allowed to let passengers keep their electronic devices on during takeoff and landing.  This pattern is likely to be repeated with other carriers.  As the article points out, passengers are likely to blame the flight attendants, not the practice of outsourcing, and that's a shame.

HAMP-ed up UCL claim resurrected on appeal

Lueras v. BAC Home Loans Servicing, LP, 2013 WL 5848859, No. G046799, --- Cal.Rptr.3d ---- (Ct. App. Oct. 31, 2013)

The new frontier: mortgage-related claims brought under consumer protection laws.  A divided court of appeals reversed the dismissal of Lueras’ negligence, breach of contract, fraud, and unfair practice claims against Bank of America and ReconTrust.  The key fact alleged was that,

a mere 13 days before Bank of America foreclosed on Lueras’s home, Bank of America falsely represented in writing to Lueras that no foreclosure sale would occur while Lueras was being considered for “other foreclosure avoidance programs.” In so doing, Bank of America expressly and in writing informed Lueras he “will not lose [his] home during this review period.” A Bank of America representative also informed Lueras the pending foreclosure sale would be postponed. Nevertheless, days later, Bank of America foreclosed on Lueras’s home.

The story is familiar and frustrating: Lueras refinanced a $385,000 loan in 2007, then suffered financial hardship and requested a HAMP modification in 2009, but Bank of America offered him instead Fannie Mae’s HomeSaver Forbearance program.  Bank of America’s letter said: “Under the HomeSaver Forbearance program, we are working with Fannie Mae, a government-sponsored enterprise, to reduce your mortgage payment by up to 50% for up to 6 months while we work with you to find a long-term solution.”  Thus, Lueras entered into a forbearance agreement and made the monthly payment for 10 months, but—contrary to the promises it made—Bank of America didn’t work with him to identify feasible foreclosure prevention alternatives. 

Meanwhile, Lueras submitted all required information to determine whether he qualified for a HAMP modification. While he was waiting, the trustee ReconTrust served him with a notice of default.  Only once this notice was recorded did Bank of America begin to explore alternatives to foreclosure.  Lueras enlisted the California AG, which agreed to monitor and assist with the modification process.  He was served with a notice of trustee’s sale with a scheduled sale date of Feb. 22, 2011; it was rescheduled four times, to May 18, 2011.

Bank of America allegedly eventually determined Lueras was HAMP-eligible and made an oral modification offer, which Lueras accepted.  But a May 5 letter told Lueras he wasn’t eligible.  The letter said that Bank of America was reviewing Lueras’s financial information “to determine if there are other options available to you” and that Bank of America “will contact you within 10 days to let you know what other options are available to you and the next steps you need to take.” The May 5 letter also stated: “If a foreclosure sale of your home is currently pending and on hold, that hold will continue and remain in effect while you are considered for other foreclosure avoidance programs.” While advising Lueras not to ignore any foreclosure notices, the letter stated, “you will not lose your home during this review period.”

Lueras immediately contacted Bank of America, which told him that the letter was sent by a third party in error, and that he’d been approved for a reduced interest rate subject to Fannie Mae’s approval.  A May 6 letter said that Bank of America was reviewing his financial documents, with one of three possible responses: (1) notification he had been approved for a trial period plan under HAMP, (2) notification he was not eligible for a HAMP loan modification, or (3) more information was needed to make a decision. Again, he immediately contacted Bank of America, but was told that the letter was erroneous because his application had already “been approved” by Bank of America. Bank of America told Lueras that the trustee’s sale rescheduled for May 18, 2011 would be reset, pending approval by Fannie Mae.   

Lueras made many attempts to contact Fannie Mae, Bank of America, and the AG during May 2011, but never received any further response. HAMP’s guidelines require servicers to wait 30 days after denying a HAMP modification before foreclosing, allowing an appeal.  On May 18, the AG’s office told Lueras that the foreclosure sale would happen on that day; minutes later, his home was sold.  The sale was ultimately rescinded.

The court first held that Bank of America and ReconTrust didn’t have a duty of care to offer a loan modification or offer alternatives to foreclosure.  However, “a lender does owe a duty to a borrower to not make material misrepresentations about the status of an application for a loan modification or about the date, time, or status of a foreclosure sale.”  Thus, Lueras could potentially amend his complaint to state a claim for negligent misrepresentation of fact. 

The court reached similar results on breach of contract.  Though Bank of America never signed the forbearance agreement, it was still bound because it accepted payments during the deferral period and was entitled to receive a $200 incentive fee “upon successful reporting to Fannie Mae of the initiation of a HomeSaver Forbearance plan and the collection of one payment under the forbearance plan.” (Though an agreement modifying a note and deed of trust is subject to the statute of frauds, the agreement here stated: “No Modification. I understand that the Agreement is not a forgiveness of payments on my Loan or a modification of the Loan Documents.”)  The agreement did require Bank of America to work with Lueras in good faith to identify foreclosure prevention alternatives within six months.  Thus, Lueras could also amend his complaint to allege that Bank of America’s failure to act breached its duty.

Bank of America argued that Lueras failed to allege damages.  Payments he made during the deferral period weren’t contractual damages because they would have been owed under the mortgage in the absence of the forbearance agreement. But he might be able to allege some other damages from the failure to work with him in good faith.

California’s mortgage-specific law was no help because it only provided the remedy of a one-time postponement of foreclosure where the lender didn’t look for foreclosure alternatives in time.

Fraud: As with the contract damages, Lueras’ continued payments on the loan didn’t constitute detrimental reliance.  Nor did the money, time and effort he wasted on compiling over a hundred pages of documents while attempting to modify the loan, which was de minimis.  But he might be able to amend the complaint to allege detrimental reliance, even if the trustee’s sale was ultimately rescinded.

UCL violations: Bank of America argued that Lueras hadn’t lost money or property as a result of its actions, because he’d been in default for years before suing and his monthly payment under the forbearance agreement was less than his monthly payment under the mortgage.  But the allegation that his home was sold at foreclosure was sufficient economic injury: “Sale of a home through a foreclosure sale is certainly a deprivation of property to which a plaintiff has a cognizable claim.”  He might also be able to amend the complaint to allege that his injury was “caused by” BoA’s allegedly unlawful, unfair, or fraudulent conduct.  After all, BoA told him that any pending foreclosure sale would be “on hold,” that the May letters were sent in error, and that he’d been approved for a modification.  Also, Lueras might be able to allege that BoA didn’t work with him in good faith to evaluate and try to identify and implement a permanent solution, as a consequence of which he lost his home through foreclosure.  Although it was his default that triggered the foreclosure proceedings, BoA’s subsequent misrepresentations/failure to work with him in good faith might also have caused the foreclosure sale.

Unfair/unlawful/fraudulent practices: The court held that some of the alleged conduct could not violate the UCL, to the extent that Lueras alleged that BoA promised him a solution: “Nothing in the Forbearance Agreement would mislead a borrower into believing Bank of America would always determine or identify a permanent solution to ‘save’ the borrower’s home.”  However, “[i]t is fraudulent or unfair for a lender to proceed with foreclosure after informing a borrower he or she has been approved for a loan modification, or telling the borrower he or she will be contacted about other options and the borrower’s home will not be foreclosed on in the meantime, as represented in the May 5 letter. It is fraudulent or unfair for a lender to misrepresent the status or date of a foreclosure sale.” Lueras could also allege that BoA violated its duty to act in good faith.

The dissent would have found, among other things, that Lueras lacked standing for a UCL claim, since he couldn’t have lost money or property when he was in default.  “Rather, he has experienced an incredible windfall. Lueras has avoided foreclosure on the Property even though he has not made any payment on the Loan since July 2010.”  Also, the dissent would have held, Lueras couldn’t show reliance on any of the May statements since all his actions/inactions took place before then.

Misleading health insurance letters?

Report on letters discouraging consumers from investigating cheaper alternatives and subsidies here at Talking Points Memo.  Exercise for the reader: what's the potential for Lanham Act and state consumer protection law claims (in states that don't exclude insurance from the coverage of their unfair practices/consumer protection statutes)?

No class action against payment processor for multiple sites

Yordy v. Plimus, Inc., No. C12-0229, 2013 WL 5832225 (N.D. Cal. Oct. 29, 2013)

Yordy went to  TheNovelNetwork.com, which allegedly promised her unlimited downloads of bestselling eBooks for a one-time $49.99 fee, which she paid, only to discover that the website didn’t offer the promised books for download, but rather only had links to eBooks that were already available elsewhere on the internet for free (some in violation of copyright law).  That site was allegedly one of 19 such “Unlimited Download Websites” that utilized the same fraudulent advertising scheme. She alleged that Plimus controlled this scheme and profited by taking a percentage of each one-time fee as a payment processing fee. She brought the usual California claims.  Plimus denied that it was involved in the design or implementation of the marketing and advetising, but was just a processor.

The court denied Yordy’s motion for class certification.  It first rejected Plimus’s argument that the class was unascertainable because the court would have to determine if each individual had been exposed to the allegedly false advertising.  But the alleged misrepresentations here were not “communicated only to select individuals, but to the public at large on the face of the UDWs.”  Screenshots showed these and similar statements: “Members have unlimited access, no restrictions,” and “MILLIONS of titles available!”  The websites included images of popular (and in fact unavailable) titles such as Lord of the Rings and The Da Vinci Code. All putative class members were exposed to this allegedly false advertising, so no individualized inquiry would be required to determine class membership.  Numerosity was also satisfied.

The problem was commonality.  Yordy argued that the common questions were: (1) whether Plimus is liable for facilitating and promoting the UDWs, and (2) whether Plimus had knowledge of the fraudulent nature of the UDWs.  But questions weren’t enough; Yordy needed to show “the capacity of a classwide proceeding to generate common answers.”  She didn’t.  After the court requested Yordy to identify evidence linking Plimus to the UDWs’ advertising, she identified communications between Plimus and only one UDW.  Consumer complaints received by Plimus didn’t demonstrate that it was involved in advertising or promotion.  (Why not contributory liability?  That would seem possible on a classwide basis.)  “While Yordy need not prove Plimus’s involvement with all the UDWs’ misrepresentations at this stage, she must present sufficient evidence to satisfy the Court that the putative class has common claims.”  She didn’t.

Typicality was also absent, for similar reasons.  Yordy failed to show that Plimus’s involvement in the UDW she visited was similar to its involvement with the 18 UDWs she didn’t visit.  Though the misrepresentations may have been similar, there was no evidence that Plimus’s conduct in bringing about those misrepresentations was similar.  “The Court is cognizant of not reaching too far into the merits in requiring Yordy to prove Plimus’s involvement in advertising, but, as with commonality, Yordy must at least establish that Plimus’s involvement in each UDW was substantially similar such that Yordy’s claims against Plimus relating to TheNovelNetwork.com are representative.”  Also, without commonality and typicality, there couldn’t be adequacy.

Peter Jaszi Lecture: Bernt Hugenholtz on Flexing Authors' Rights

American University Washington College of Law Program on Information Justice and Intellectual Property  Presents The 2nd Annual Peter Jaszi Distinguished Lecture: Professor Bernt Hugenholtz - Flexing Authors' Rights   November 7, 2013 | Room 603 5:30 Reception | 6:15 Lecture | 7:30 Dinner Reception American University Washington College of Law For registration, CLE and live/on-demand webcast: http://www.pijip.org/events/2013jaszilecture/

 

Prof. Hugenholtz: Flexing Authors' Rights   The global future of cultural institutions, information industries, and individual creative work hinges, in part, on present decisions about the scope and character of copyright exceptions and limitations. Almost everyone agrees that modern copyright law needs to be flexible in order to accommodate rapid technological change and evolving media uses. In the United States fair use is the flexible instrument of choice. Author's rights systems in Europe are generally deemed to be less flexible and less tolerant to open-ended limitations and exceptions. But are they really?    This lecture makes the case that (1) author’s rights systems can be made as flexible as common law copyright systems, and (2) that the existing EU legal framework does not preclude the development of flexible norms at the national level.

Professor Bernt Hugenholtz   Bernt Hugenholtz is Professor of law and Director of the Institute for Information Law (IViR) at the University of Amsterdam. He is also a professor at the University of Bergen (Norway), and regularly teaches at the Munich Intellectual Property Law Center (Munich), Monash University (Melbourne) and Charles University (Prague). He is the co-author, with Prof. Paul Goldstein (Stanford University), of International Copyright. Principles, Law, and Practice (Oxford University Press, 3nd ed. 2012), and has written extensively on a range of copyright-related issues. He has acted as an advisor to the World Intellectual Property Organization, the European Commission, the European Parliament and the Netherlands Ministry of Justice. Prof. Hugenholtz is widely regarded as the foremost expert on copyright in the EU. He was a member of the Drafting Committee of the Wittem Project, a collaboration between copyright scholars across Europe that produced the ground-breaking model "European Copyright Code" in 2010. With Ian Hargreaves, he authored the 2013 Lisbon Council policy brief on "Copyright Reform for Growth and Jobs: Modernising the European CopyrightFramework." Recent publications are available at http://www.ivir.nl/staff/hugenholtz.html.

 

The Peter Jaszi Distinguished Lecture in Intellectual Property   The Program on Information Justice and Intellectual Property's Distinguished Lecture on Intellectual Property Law is named in recognition of the extraordinary ongoing contributions of Professor Peter Jaszi to the study of intellectual property at American University Washington College of Law and in the world at large, and in particular for his lasting contributions to the elevation of the public interest in intellectual property discourse.   Support the Lecture: Supporters may make a pledge at wcl.american.edu/go/give, and designate their gift to the lecture by using the “Other” field. Checks mailed to the Development Office should include “Peter Jaszi Lecture” in the memo line.

Soul man is sad man

Moore v. Weinstein Co., LLC, No.12-5715 (6th Cir. Oct. 31, 2013)

Sam Moore, half of the music duo Sam & Dave sued a number of defendants related to the 2008 fim Soul Man and its accompanying soundtrack.  The court of appeals affirmed the district court’s rejection of all his trademark, right of publicity, and related claims.

Sam & Dave’s 1967 album, Sam & Dave Soul Men included the hit single “Soul Man,” for which Moore won a Grammy.  They broke up and reunited in the early 1980s; Prater passed away.  Moore continued performing using variations on “Sam Moore ‘The Legendary Soul Man,’” and his promoters now call him the “Legendary Soul Man.”  Sam & Dave were inducted into the Rock & Roll Hall of Fame in 1992.

In the movie Soul Man, the two main characters are 2/3 of a 1960s soul trio, Marcus Hooks and the Real Deal.  The third member leaves the group and has a solo career, while the two continue as a duo, then spit up, then reunite for a memorial for the third.  On a cross-country trip, they perform Sam & Dave’s song “Hold On, I’m Comin’.”  Moore argued that they portrayed Sam & Dave.  The soundtrack, “Soul Men The Original Motion Picture Soundtrack,” included no Sam & Dave songs.

Moore sued for infringement of his trademarks in “Soul Men,” “Soul Man,” “The Legendary Soul Man,” “The Original Soul Man,” and “The Original Soul Men,” the 1967 album “Sam & Dave Soul Men,” and  a 2008 documentary DVD, titled “The Original Soul Men Sam & Dave.”

The appellate court just adopted the district court’s reasoning granting summary judgment on Moore’s Lanham Act and state unfair competition claims, and only engaged in its own analysis of the publicity, state law trademark, and consumer protection claims.

Under the Restatement, the right of publicity doesn’t cover “use of a person’s identity in . . . entertainment, works of fiction or nonfiction, or in advertising that is incidental to such uses,” including “dissemination of an unauthorized print or broadcast biography,” or the “[u]se of another’s identity in a novel, play or motion picture.”  Also (and of course we’re not clear on how this relates to the Restatement), the First Amendment means we use transformative use as per Comedy III.  “[W]e weigh the appropriated likeness against the appropriating work’s expressiveness, evaluating ‘whether a product containing a celebrity’s likeness is so transformed that it has become primarily the defendant’s own expression rather than the celebrity’s likeness,’” which means “‘something other than the likeness of the celebrity.’”   Such “transformed” works (also?) lie beyond the right of publicity’s reach.  A successful publicity claim requires the challenged work to lack creative components of the defendant’s own.  Moore’s claim is weaker than Tiger Woods’ in ETW, given the general protection for movies, and the movie “[w]ithout a doubt” added significant expressive elements to any use of Moore’s identity.

Moore argued that there was no protection for the ad insert featuring his image packaged with the soundtrack’s CD and DVDs.  To promote other CDs and DVDs whose rights were owned by the company that produced the soundtrack, several pages of the insert—called “THE ORIGINAL SOUL MEN ARE AT STAX”—reprinted cover art from various Stax Records albums, including Otis Redding, Isaac Hayes and others.  Another insert page, “Essential Viewing for your Soul,” featured the images of three DVDs’ cover art, including “The Stax/Volt Revue Live in Norway 1967.” That displayed the names and images of the performers in that 1967 show, including “Double Dynamite!! Sam and Dave.”  However, Moore didn’t dispute that the company owned the (copy)rights to promote the video depicting a concert in which he performed.  Given this consent, there was no infringement of the right of publicity.  Plus, the insert title page “clearly refers to the numerous soul albums depicted therein,” of which the concert cover was but one. There was no evidence that the title page caused confusion, and “[r]ead in context” no reasonable juror would mistake this reference for Sam & Dave, or find Sam & Dave “reasonably identifiable” from the reference, even though the soundtrack was marketed to fans of a variety of soul artists.

Moore also sued for state trademark dilution.  Setting choice of law issues aside because the two relevant state laws were identical, both Tennessee and Arizona require famousness, and Moore couldn’t satisfy that element, given that he failed on his federal dilution claim.  Indeed, the only Tennessee factor not present in the Lanham Act was the nature and extent of use of same or similar mark by third parties, which weighed against Moore. The district court found at least 34 other albums currently available that either consist of or incorporate “soul men” or “soul man.”  Moore might be well-known, but the test considers the mark, not the person.

The state consumer protection claims also failed.  Moore alleged that defendants caused a likelihood of confusion about whether he sponsored the movie and soundtrack.  But the Lanham Act analysis covered this.  Under Rogers v. Grimaldi, the First Amendment precluded such a claim, and Moore’s “competing titles” claim also failed to show a likelihood of confusion.  He also alleged that defendants made false/misleading statements about his affiliation or association with the movie.  But he never provided evidence that Tennessee consumers were injured or deceived, as required.

Teaching children to see like a state

My second-grade son came home with the following schoolwork last week:

"Numbers that Name You: There are lots of numbers that label, count, measure, or order information just about you. For example, you have a birthday and an address. Do you have an ID number for a club you belong to? What's your shoe size? Think about all the numbers that name you. Write these numbers in the person shape.... Find out what a social security number is. Do you have one? Why is this an important number?"

It's easy to mock theory for having jargon.  But if this is anything other than interpellating the child as subject of the modern surveillance state in the form of data, let me know.