Tuesday, April 24, 2018

1201 hearings, LA, streamlined video exemption

IN SUPPORT
Art Neill New Media Rights
Elizabeth Rosenblatt Organization for Transformative Works
Jack Lerner, Brian Tamsut, and Jovan C. Ardy UCI Intellectual Property, Arts, and
 Technology Clinic
Tisha Turk University of Minnesota, Morris
 IN OPPOSITION
Ben Sheffner Motion Picture Association of America, Inc.
 David J. Taylor DVD CCA and AACS LA
J. Matthew Williams Joint Creators II

Tisha Turk presented on problems with screen capture using Movavi, one of the programs that the opponents want people to use.  She showed stuttering, jerkiness, pausing in capture from Netlfix.  Results in nonstandard framesize, which causes technical problems with editing and export.  Capturing streaming is going to be more prone to glitches due to additional layer of difficulty of capture.  Many computers don’t have optical disc drives at this point so streaming might be the only option. 

Opponents: Screencap programs have settings that can be optimized.  Streaming: you don’t know what the internet connection was and whether that was the problem.  Was the codec lossy or lossless?  The lossy format will require a certain amount of compression. You can’t just sit down, use a screencap program for the first time, and get perfect results. The ones we have offered fairly compensate for every program.  Not familiar with Movavi.  Had to learn screen cap programs every three years now.  There are infinite numbers. Also much easier to learn than Handbrake and video editing. As a hobbyist, you can easily spend the time to learn how best to maximize the results. 

Jack Lerner: Two points: Morrissette noted in his statement, attached to Jt. Filmmakers—many sound difficulties with syncing, computer noise, stereo effects & other important parts of the sound that aren’t captured by screencapture.  Also, there is no such thing as lossless screencapture for Blu-Ray.  Maybe he’s referring to highest possible fidelity, but we have found nothing on the market that doesn’t drop frames and lead to stuttering and other problems.   

Betsy Rosenblatt: Movavi is among the popular screencap programs; there are several.  Does screencap require circumvention: nobody knows. Which is one of the issues with an exemption that deals with distinctions between types of programs.  Netflix: this stream was from Netflix, but we have numerous reports of people using screencap who end up with just a black screen.  There are certain sources from which screencap is simply inadequate.  As to whether screencap from streaming is different: it’s necessary to use streaming for some things for unique or timely sources.  To say that one could have an internet lag free screencap is true only for some materials. Resetting screen size was suggested as an option: results in difficulty editing but also loss of material on the sides of the screen—uses the aspect ratio of whatever computer you’re working on.  Professor Turk can speak to this w/other clips.  To the extent that the stutter was supposedly a result of internet lag: that was created in an LA home with high speed DSL; many people have worse.  Even in a perfect internet connection there is frame loss and blurring.

Opponents: the relevance of screencap at this point goes to whether the existing exemption beneficiaries have to make a good faith effort to use it to get the quality they need before moving ahead with circumvention. What’s the point of that if it may or may not be legal? The proponents have consistently questioned its legality, which is why it should be retained. [But that doesn’t explain why there should be a requirement to go to screencap first, especially given its questionable legality, or why the exemption should be written to distinguish between the two.]

CO: The proponents say it’s confusing.

Opponent exhibit: from a woman responsible for VOD output for Discovery.  Transcoded AVI to mp4.  [The unanswered questions here were how these clips in the opponents’ exhibits were created, and how long it took to get those clips to the condition that they could be imported and looked good.  All the opponents’ exhibits start with the clips as if that were simple, something that the opponents’ statement above indicates was probably not the case.]  Asked to determine if these clips would be usable as a deliverable for pro use, and the answer was no. But if a small clip was used in a larger project, providers would accept the whole project.  Using multiple sources with multiple frame rates is common. You use the frame rate that the majority of your clips use, and the hope is that the converted clips will look ok.  Apple is the pickiest of the providers, and has accepted some mixed cadences, just won’t accept a lot.  Inverse telecining: backwards conversion to return it to its remaining frame rate. As long as it comes out converted, and it’s a small portion of the project, it’s usable.

Opponent: screencap in lossless ODS format. Does drop frames.

CO: how is it lossless then?

Opponent: they call it that. [!! My advertising prof senses perk up.] It’s not frame for frame, but for a screencapture, it’s getting 9/10 of the frames, and there’s a lot of frames.  We submitted something different to her [the video maker] than to you b/c there was a learning curve in using the software.  It results in a huge file, but it is high quality—someone who works for Discovery has said this could be included in a final product for Apple.  A small piece, as w/exemptions, is perfectly fine.  Every work requires postproduction editing, and no one gets a perfect clip the first time.

CO: we did find in 2015 that screencap wasn’t enough.  That’s the baseline we’re working from.

Opponent: we’ve shown that screencap has improved enough to meet distribution standards. We aren’t dealing w/close analysis.  Any documentary film that uses an archived clip has to deal with this processing problem regardless of how acquired.

Turk: Codec is just the format in which something is encoded and decoded. Something can be coded in lossless format but all it encodes is what it’s fed—a stream that has dropped frames or is pixelated.

Neill: working with people on distribution contracts—practically, most of the folks getting a contract related to nonfiction, documentary, short films—these are small projects with modest budgets. If you’re told to return and recut the video and find the source material, that takes time and money and eats into subsistence return.  Upscaling isn’t sufficient; there’s Netflix standards on upscaling that reject it. Far-fetched to say that distributors are accepting this across the board. They will ask a filmmaker to go back.

CO: specific films?

Neill: reply comments have cites to client w/broadcaster who rejected clip that was screencaptured.

Lerner: Also, documentary evidence about problems other than framerate.  Taylor asserted that PBS and Netflix don’t matter, but they are very important for documentarians—the record referring to iTunes doesn’t cover PBS and Netflix, the key channel for documentarians, and our record shows that PBS and Netflix don’t like screencap. Our submission addresses ODS. It’s true that they accept 70s footage, but that’s because they understand there’s nothing else available. If you try to submit a modern screencap clip, that will be rejected.  Opponents have not submitted evidence of broadcast standards. Also worth noting that the clip narrator isn’t here to be asked questions.  [CO says that not all the people mentioned in submissions here.]

Rosenblatt: inconsistency in the arguments.  The argument that screencap is good enough for everything is fundamentally inconsistent with the argument that DRM is necessary to prevent piracy. We’re asking people who make art and commentary to sacrifice their vision; turning CO into art critics.

CO: not here to discuss whether DRM is valuable. [That’s true, but the impact of exemptions is very much at issue here, and the fact that it’s not preventing “piracy” is important.]

Opponent: we didn’t oppose renewal.  Expansion is on the table.  They’ve had a hard time establishing uses are noninfringing. Compare that w/the quality of screencap, what we saw was that the quality is pretty good, and that’s true w/experts too. Take that into account when weighing blurry issue of noninfringing status against ease of screencap.

CO: do you envision that the filmmaker has to actually get rejected to use the exemption?

Opponent: it’s good faith/common sense; doesn’t require rejection by the broadcaster. Requires sampling products on the market. If you’ve been rejected in the past or you compare their standards to what you can get, you don’t have to try again.

CO: so now the filmmaker rejected by the broadcaster can circumvent from now on?

Opponent: that would be a common sense approach. Not sure if it was eligible under existing exemption.

[So why do you have to go through this rigamarole if you haven’t yet been rejected?  Good faith makes sense where situations may vary, but ODS is ODS; it won’t work differently from user to user.]

Opponent [Taylor]: didn’t mean to say PBS and Netflix didn’t count.  My discussion w/expert: she offered that in her experience, the most difficult company was iTunes.  Agrees w/Williamsn [opponent] about significance of screencap. It’s an alternative for those looking to expand the exemption. It continues to improve. [Then there’s no point in requiring people to use one rather than the other.  It just makes the exemption more confusing without having any more DRM-protecting or copyright-protecting benefit.]

CO: Question re previous exhibit from DC?

Rosenblatt: It depends entirely on what you’re doing.  People who want to make seamless stories from multiple sources have difficulty w/different frame sizes, frame rates. If you want to focus in  on something, you can’t do that dependably using something that will result in blurriness or loss of material.  We aren’t looking for proof that every use is fair, but for the significant possibility that fair use is deterred.

CO: are people confused about screencapture as an alternative?

Rosenblatt: Turk can address—but this is a law that addresses more what happens after you make a thing than before.  1845 people responded to our survey Q about what the DMCA was: 1400 hadn’t heard of it or didn’t know. Of the 440 who said they did know, only 67 mentioned anticircumvention, and 6 mentioned exemptions.  1/3 mentioned complicated, confusing, convoluted.  The people who knew about it said “I have little understanding do to the confusing and vague language.”  “scared the pants off of everyone in my middle school.” That’s the sort of user we’re dealing with. That may not address directly your Q but it speaks to our argument that people aren’t likely to seek out something that won’t work as well when there’s an option that works, from the consumer standpoint, and they won’t have to go through these multiple steps. They don’t understand why one means of achieving a fair use would be illegal and another wouldn’t be.

CO: Seems in tension w/saying there’s a chill on uses.

Rosenblatt: there is a chill when people know, though it’s fair to say there’s not as many of them.  A lot of the trouble comes when someone who isn’t chilled b/c they don’t know then has to interact w/ an institution like a school, traditional publisher, library, who won’t facilitate/adopt their work, or when responding to a takedown, or trying to get insured. That’s where the chill happens, not in the initial creativity but in the use of what you’ve made. Turns the law into a trap for unwary, makes fair uses more vulnerable to takedowns. When you encounter a gatekeeper, like iTunes, it can turn out what you’ve done is illegal even though it would have been legal if you used a different program.

CO: is it really just because people don’t know if they can use screencap or not?

Rosenblatt: a few levels of confusion. Screencap is one. They don’t know what noncommercial means: if it’s on YouTube.

CO: we’ve always contemplated YouTube in the exemption.  How is that confusing?  You asked for noncommercial.

Rosenblatt: Times have changed a bit regarding the way content is delivered in the sense that noncommerciality and whether someone is personally making money off their creation is just more complicated.  We are very much about noncommercial creation, but we’ve had people come to us increasingly confused about what noncommercial means.

CO: filmmaking and ebook aren’t limited by commerciality; should they be?

Rosenblatt: we don’t propose a change to that.

Opponents: we support simplification, but you can’t do it at the expense of following the law.  Even the proposed exemption is college-level understanding. It’s difficult to craft a legal rule that’s simpler.  Michael Donaldson has tried to simplify fair use: would your use be clear to the average viewer. If you apply that to most of the examples in the record, the fair use doesn’t come through b/c the point isn’t perceivable to the average viewer. That’s why you’ve drawn the lines where you have for filmmaking and ebook authorship. Axanar: use of Star Trek in a “fan” film—no payment there, and the court still said it wasn’t a fair use. The point of the work couldn’t readily be perceived.  [Not really a short exerpt there.]  There wasn’t enough evidence to do “primarily noncommercial” before [that’s a mischaracterization of the record; in that instance the CO indicated that “noncommercial” in its definition encompassed the videos we were talking about, such as videos that were made on commission]  the Dr. Seuss v. ComixMix: transformative purpose, the fourth factor still failed fair use as a matter of law b/c of potential harm to the market for derivative works even if they didn’t license mashups [again, that’s a misdescription of the case; the motion to dismiss on fair use as a matter of law failed, not the fair use defense]. The law doesn’t mandate the simplest exemption.  [Nor does it bar it.]

Turk: The remix community uses what works.  I was mystified that screencap came up at all.  The goal for a remix artist is to get good quality video into the computer. Didn’t understand why anyone would be asked to use something that doesn’t work as well.  Can’t you just know from past experience or other people’s experience that this typically doesn’t work, and that another thing works well, and participate in a community that gives advice about what works well?  Can’t we just say, if it’s fair use, get the video in a way that works for you and go?  I would never say don’t use screenap.  I wouldn’t do it. There might be cases where someone wants or needs it, but I’m interested in the end result.  Is the quality good enough that someone won’t just hit the back button?  Evidence is that if something looks amateurish people don’t watch it. 

CO: Remix and education: K-12 remix activities—screencap might be perfectly adequate?

Turk: It might be. Haven’t taught remix in those settings.  I come back to: don’t disallow it, but don’t impose it on people whose workflow or access to technology works better w/a different format.

Taylor: We endorse joint creators’ proposal for simplifying regulatory language. Improvement over actual statutory exemptions. Not very difficult to understand, once you start looking at it.  If it’s so confusing, could provide them some examples of what activities would look like.  You could provide them examples from this rulemaking.

Neill: We’re dealing w/ a subset of noninfringing uses. The analysis happens on each individual clip. That’s how a real fair use analysis happens, regardless of whether it’s a documentary or YT video or some other format.  Trying to avoid haplessly violating law when making video on day to day basis.  There’s lots of possible kinds of confusion. Looking back, we can see the evolution of filmmakers who do a variety of different formats—not just fictional, but documentary, and other types. People could turn around the next day and use a clip in a way that’s fair use and be excluded as they weren’t the day before. We’re trying to deal with gaps—examples of what’s ok won’t help if you’ve added all these additional layers of requirements.  Many times these requirements have never been developed/delineated in case law.

CO: we’re not looking to break new ground in case law.  [I think he was saying that the requirements that decrease the scope of exemptions haven’t been delineated in case law, because the requirements haven’t been requirements for making fair use.]

Lerner: 8 renewed exemptions have said that people need to use clips which apply to the proposal for expansion, as well as a number of examples for expansion, and the statute doesn’t require the limits that are on the current exemptions.  House Commerce Committee said that motion pictures could be an appropriate category for exemptions, and the report goes on to say that it wouldn’t be appropriate to go too narrow in the sense of Westerns, comedies, etc.

CO: how is all AV works limited?

Lerner: short portions.

CO: doesn’t go to class of works.

Lerner: motion pictures restricted in other ways, such as short portions/commentary, then you’d have an appropriately narrow class under the plain meaning of the statute and what Congress said in the legislative history.

We aren’t asking you to break new ground for these uses: short portions for criticism/commentary. Not controversial that many fanworks are criticism/commentary; the Register is on record as saying so.  Juxtapose in order to say something new. We’re not talking about a sequel but about a critique. Harry Potter; GWTW.

CO: Harry Potter wasn’t saying fan fiction was always fair use.

Lerner: Sure, but many are, and that’s the proposition that isn’t controversial given the record and the case law. 

CO: [adopts wrong characterization of Dr. Seuss v. Comicmix as definitively not fair use] Give us specific guidance—where do we draw the line?  [Short portions, criticism or commentary] How do we protect only the fair uses.

Lerner: criticism or commentary/new meaning and expression.

CO: Dr. Seuss says it’s not just transformativeness but also no effect on derivative market. And why should we drop noncommerciality? SCt has said that the effect on the market is key. We also have to look at commercial effects. How can we provide enough guidance? 

Lerner: first of all, if someone crosses the line, there’s still a remedy for copyright infringement—you provide enough guidance that way.  [Why does the CO need to provide any guidance in the exemption on what is noninfringing other than the statute does?]

CO: we don’t want infringing uses, so how do we provide guidance so they don’t cross that line? [I thought this was a proceeding about anticircumvention, not designed to expand or contract fair use?]

Lerner: short portions makes a real dent. It won’t match perfectly but that’s ok b/c there’s a remedy for infringement.  This is a phantom threat—if someone is going to infringe, and they’ve ripped to commit infringement they’re claiming criticism and commentary, you have statutory damages for that.

Williams: CO began by denying exemptions for fair use for AV works. Then the CO decided it would specify certain categories of users, it could get there.  [Fortunately we’ve learned since then a bit more about what works and what doesn’t.] When you disregard current boundaries that effort falls apart. Fair use isn’t an appropriate category. TVEyes: transformativeness doesn’t moot the fourth factor.  [Though the short portions thing, as with every other case they’ve mentioned, distinguishes that inasmuch as TVEyes offered people everything.]  Often hard to perceive the parody/transformation in fanworks; use full songs [of what relevance is that to the clips?].  What’s the potential harm to copyrighted works? The fact that there are licensing options for fictional filmmakers and ebook authors!  [That always have anti-disparagement clauses.]  Wouldn’t say it’s never fair use to make criticism and comment generally, that’s a harder sell than criticism and comment of the work directly. Many of these examples don’t comment on the work itself.

CO: is it appropriate/necessary to clarify existing exemptions? If there are examples of things that should be included but aren’t.  [Prosecution/defense uses are a big deal here.]

Rosenblatt: one of the chief confusions is that people are confused about whether they fit into the type of creator category that distinguishes between existing exemptions. We aren’t here to litigate remix video but to talk about where other things might fit in, like multimedia ebooks, and uses that attorneys might make in litigation [yes!].  Documentary about a guy who’s exonerated by footage showing that they were at a baseball game.  Makeup tutorials juxtaposing a face to a clip from a movie. YT reviews of movies. Where do things fit in?  Makeup tutorial is criticism/commentary, short portion etc. Audio only uses of AV works—podcasters who want to rip to get high quality audio b/c listeners expect that.

CO: wants examples of ebooks/podcasts.

Rosenblatt: can follow up w/submission.  Also there are lots of people who have questions: Quora: is it illegal to use audio trailer in my podcast?  Answers are all over the map. Audacity forums where people say, I need to rip to get high quality audio, b/c Audacity won’t let me use it w/o high quality.  I have examples of these questions—could also make a follow up submission.

You could also have like Canada’s UGC provision does, uses that don’t usurp the market.

CO: could we exclude users instead?  Uses that fall to the infringing side.

Rosenblatt: we’re not arguing to eliminate use, just user categorization questions.

CO: you’re not talking about filmmakers. Collapsing all of that. Is there a way to identify problematic use, gray area use?  [Shouldn’t the gray areas be left for litigation, so as not to expand or contract the scope of fair use?]

Rosenblatt: short clips.

CO: no one’s asked to remove that.  [Yes, that’s the point.]

Rosenblatt: that’s enough.

CO: the opponents say it isn’t.  [Why are we required to defer to them and not to the other evidence in the record about the tiny size and contractual restrictions of the licensing market, which by the way is not a “clip” licensing market but a general licensing market, versus the size and variety of the clip uses out there?]

Rosenblatt: educational/derivative uses are hard to separate—a lot of derivative uses are educational. Doesn’t feel comfortable speaking to opponents’ proposed language.

Neill: Williams skipped over the harm to © works from clarifying the language.  There isn’t any. What is the harm that’s on the record after so many proceedings?

Sheffner: Proponents say there’s no viable licensing market.  He says there is. 

CO: in 2015 rulemaking, the Register found that licensing wasn’t viable. Speak to why it has changed. And to which uses there is a viable market, e.g. comment and criticism.

Sheffner: MPAA represents 6 major movie studios, with different divisions (movie, TV, news).  Clip licensing is sometimes centralized and sometimes not.  Different philosophies and business practices, can only speak in aggregate. Overall, every studio licenses clips. They have websites with info about this. In most cases it can be done online through forms, email, phone.  There was an old FAQ that said only a fax, but looking more comprehensively there’s actually phone or email. 

CO: requests ignored, low dollar value/smaller uses?

Sheffner: asked all 6 studios to address.  B2B only licensing? None of the companies outright refused individual licenses, but vast majority was B2B, because they have the wherewithal to engage in the project.  Nonetheless, they do receive individual requests.  Significant portion: individual can’t afford price of license. That doesn’t mean there’s no viable market.  Bel Air houses: most people can’t afford homes there, but there’s a viable real estate market.  [If only copyrights were intangible and nonexhaustible, unlike real estate.]

CO: licensing to remix artists?  Multimedia ebooks.

Sheffner: there is licensing. Hard to generalize about criteria for licensing. None of them absolutely barred licensing in those areas.  [Google Books case on factor 4 is v. good on this—has to be significant as an impact.]

CO: is it frequent?

Sheffner: can’t say that in those specific categories.  Ebooks is a nascent market—there have been licenses. There’s some experimentation. The licensing websites invite inquiries from “all” uses—there’s no prohibition. Relatively unusual for there to be individual licenses, but not unusual for there to be remix videos posted to YT.  The content ID system identifies them and monetizes them. Those aren’t licensed but are [he didn’t finish the sentence because he can’t without doing something that his clients really won’t want him to do].  [Does Content ID distinguish circumvention from noncircumvention? How did the uploaders get the footage?  Does that mean the circumvention used to create the footage was not unauthorized under Sheffner’s interpretation?]

CO: is it fair to say that’s an alternative to licensing b/c you still make money?

Sheffner: it’s a nontraditional kind of license.

CO: is it really a license?

Sheffner: there’s a license agreement w/YT.  [That’s about the footage, not the circumvention.  That doesn’t provide the footage which is the precondition to make the video, as a real license might.]  Tolerated even if infringing b/c enforcement cost too high.  New business model where the work is identified and a license is granted to YT to allow that use even if it otherwise might have been infringing.  [Which suggests that circumvention has no adverse impact at all.]  Several thousand clip licenses per year, but not much ability to give a breakdown fiction/nonfiction/education.  Can’t indicate monetary value, but licenses exist in each category.

CO: nondisparagement clause?

Sheffner: can’t answer whether that would have prevented licensing record examples from proponents. These have been discussed in previous cycles; there’s no change in the record.

CO: we’re being asked to consider different types of uses.

Sheffner: this isn’t really an issue about 1201, but contractual issue.

CO: but it bears on whether this is an alternative to circumvention, if the use is prohibited under contract. [and on fair use!]

Sheffner: not much record evidence of these clauses, which are vestiges, having substantial impact on ability to make fair uses. [because fair users don’t license their clips ….]

CO: what effect is changing the exemption likely to have on the market for © works?

Sheffner: clip licensing is a real market.  [what effect is non-screencap circumvention likely to have on that market?]  It’s significant though not dominant—people have jobs doing licensing.  Fair use looks at the aggregate effect on the market of this kind of activity.  [Fair use activity.] It absolutely would. Clip licensing revenue would dry up if all clip uses were allowed.

CO: we’re talking about arguably fair use for purposes of comment and criticism.  Proponents say that if a use is fair there’s no right to payment. 

Sheffner: 1201 itself require that you look at, even if the uses are fair, would allowing the exception cause substantial harm to the market. [Really?  That’s not how I’ve understood the statute—it’s the legitimate market for copyrighted works, not the market for extortion based on technology. The statute wasn’t supposed to eliminate fair use or enable it to be switched to fared use.]  Look at the aggregate effect on new business models. 

CO: but also one of your new models is YT, which is not the traditional way [where you don’t need DRM].  Do you have an idea which makes more?  Or a percentage?  [Considered that way, since YT is a billion-dollar market, I’m thinking that individual clip licensing is probably smaller.]

Sheffner: The more people can break DRM, the less effective it is and the less willing studios will be to use new business models.  [v. screencap?]

Normalization of ripping is dangerous [v. screencap?]  Exemptions need to remain narrow and focused. Broader and less focused they are, the more it becomes nonspecialized and word gets out.  [His assertion is not really evidence of that; indeed, the record evidence is all to the contrary.  I wonder what the APA standard on this is?]  Exemption shouldn’t swallow the rule.  Difficult to quantify.

Neill: In past proceedings, piracy has come up. We haven’t seen any direct evidence why an educator, artist, or filmmaker’s use of a short clip will create piracy.  If you focus on the harm, the Joint Creators make money off of even infringing uses through YT; no one here is talking about infringing uses.  The question is: unidentified harm that is unsubstantiated from people making noninfringing uses. If any harm exists, it’s the inability to get a license from noninfringing uses –which is not a harm.

CO: we also have to consider the adverse effect on the market for derivative works/licensing.

Neill: I’ve worked with folks who have both licensed and unlicensed clips. When a use should be licensed, that happens. Those licensing markets are available to folks who want to make otherwise infringing uses; we shouldn’t be concerned about licensing otherwise noninfringing uses.  When we look at our streamlined proposal, there are specific limits.  As far as slippery slope, our language is linguistically almost identical to past exemptions but for the user language and the access control language—it’s been 9 years.  No evidence offered of some vast slippery slope.

Williams: no studio policy against individual uses.  Sites in the record don’t ask you to verify that you’re a registered corporation.  Dr. Seuss says that even if a plaintiff doesn’t have evidence it’s entered the mashup market, it’s potential if has licensed other uses [Again, misdescription: there, the plaintiff alleged that it collaborated with other rights owners, such as Jim Henson to do a Muppet-Seuss crossover; that doesn’t mean that “mashup” in general is a standard or likely to be developed derivative market, or more relevantly that criticism and commentary are legitimate markets].

CO: can individuals get clips that aren’t on the website?

Williams: yes, you can make contact with the studio. Whether each studio would agree to find the clip you want, he can’t say.  There are also ebook examples: enhanced Harry Potter series, enhanced GoT series. They don’t necessarily use clips from motion pictures, but you could easily imagine them doing clips from the motion pictures. Enhanced Roots with archival footage of author interviews. Making of Indiana Jones: full of stills, and those are always licensed [not true for academic work; see also the Grateful Dead/Dorling Kindersley case] and they have the right to choose who they want to partner with.

With Content ID, not speaking on behalf of studios, they are licenses to YT, not to the individual end users. Whether that’s monetized or not we can’t say across the board. They choose monetization, monitoring, and blocking, subject to user responses.  Agreements are highly confidential, but the fact that program has been made available to address © concerns about mass number of users; there are tons of other websites that don’t provide that kind of response system [and how many views has the Pope?].  Thousands per year of licenses v. thousands per week on YT: doesn’t mean there’s no harm or that the studios aren’t trying to enter the market.  Piracy: my clients don’t have a straight line of sight into who claims the exemptions, who might have gotten a license. Cesar Chavez film: some licensed, some not; no insight into whether there would have been a license w/o the exemption. Nondisparagement clauses: they were in the record last time.  All the things requested last time are requested again, so that hasn’t changed.  Filmmakers: there’s not any examples clearly prohibited by the nondisparagement clause [and if you were the person making that decision, and not making it in the context of this proceeding, that would be more relevant evidence, but you’ve specifically disclaimed the ability to speak for any given studio.]

Not saying that you have to look at factor four even if the use is fair, but if there are some things that are probably fair and others that probably aren’t, you have to see if the spillover from an exemption will cause harm to a market.

Lerner: Universal clips website requires users not to disparage, criticize, belittle, parody, or negatively comment on. This is the sword of Damocles that can be asserted at any time even after licensing.  Telling that Sheffner compared licensing to one of the most exclusive housing markets in the US.  There is a licensing market, but it’s not available to everyone.  Some of our clients use it but most can’t afford it.  A lot of what’s going on is fair use, and 1201 is holding us back.  How much money have studios lost due to existing exemptions? No record evidence. Only harm they’ve articulated is a threat of a marginal number of fair uses that turn out not to be fair. Sometimes rightsholders just say no: MPAA member itself had to make fair use of the Steve Jobs Apple TV ad.  Sometimes they don’t call back: personal experience w/ a number of clients.  Orphan works problem.  People can’t afford licenses.  Dr. Seuss notwithstanding, a sufficiently transformative use doesn’t require a license.  Campbell v. Acuff-Rose found fair use possible despite negotiations about license that broke ground.

MPAA’s proposed language doesn’t change anything.

Taylor: possibly give us an opportunity to review any language before publication: would help in efforts to resolve/simplify.  Current exemption has misidentified AACS as Advanced Access Control System, when it’s Advanced Access Content System.  If we’d been allowed to comment, we could have corrected it.

CO: if you were to make a vid equivalent in the ebook world, would you be editing the clip itself?  Tandy said that remix artists could want to make ebooks. Current video exemption involves a lot of clip editing—would that be true in an  ebook as well, or would it be unaltered clips + writing?

Turk: not sure.

Rosenblatt: the answer is yes, sometimes those ebooks would need or want to alter the images themselves or the sound.  Examples focus in on particular part, or split-screen where they are remixing the video as well as juxtaposing.

Lerner: the video exemptions are the only exemptions that mandate specific technologies. That’s one reason we’ve asked for a tech-neutral exemption: we benefit from seeing what has changed over time, as w/DVD, Blu-Ray, etc.  AACS2.0 is no different functionally from the other mechanisms.

Opponent: AACS2.0 is completely different. This proceeding has given new formats an opportunity to grow before an exemption is granted.  [v. screencap?]

Monday, April 23, 2018

Merchandising right violation?

In the footsteps (so to speak) of Boston Athletic Association v. Sullivan, 867 F.2d 22 (1st Cir. 1989), how should we analyze these T-shirts, sold at Boston's Logan Airport around the time of the Boston Marathon?

Wednesday, April 18, 2018

Leval on fair use


At a talk today (should be posted in about a week), Judge Leval gave a beautiful explanation of why good faith/bad faith shouldn’t matter to fair use. Boiled down and stripped of its eloquence: (1) A publisher should be able to examine the relevant works side by side and determine whether the use is fair, without investigating the good faith of the second author/the means by which the second author acquired access to the first work. (2) The inquiry should be done on the pleadings/summary judgment, and considering good faith makes that difficult.  (3) The ultimate interest in fair use is the public’s, and if the public is entitled to the new work/new use and benefits from it there’s no reason that the defendant’s means of access should matter.

Judge Leval also insisted that the fourth fair use factor was the key, even more than factor one, and that therefore the result in TVEyes was correct.  I wish he had addressed the record evidence in that case that Fox didn’t license everything—it put video it was later embarrassed by in the Memory Hole.  That seems to me quite relevant even from a market-focused perspective, especially since people looking at news shortly after broadcast, when they’re scanning for topics, can’t be sure what moments will later be awkward for Fox to acknowledge.

Monday, April 16, 2018

allowing TM to be used to describe a different entity could be literally false lawyer advertising


Rosenbaum & Associates, P.C. v. Morgan & Morgan, 2018 WL 1768050, No. 17-4250 (E.D. Pa. Apr. 12, 2018)

Rosenbaum sued various Morgan defendants for false advertising of personal injury lawyering services in Philadelphia.  Defendants started advertising Morgan & Morgan’s personal injury services in the Philadelphia market in December 2015, though no attorneys worked on personal injury matters for a Morgan & Morgan entity in a Philadelphia office. “At some point, an entity called Morgan & Morgan Philadelphia opened an office in Philadelphia but Morgan & Morgan PA denies it has an office in Philadelphia.”  In January 2017, Morgan & Morgan PA hired a relatively inexperienced Pennsylvania attorney as the only attorney in its Philadelphia office, but this allegedly merely occurred “to perpetuate the charade [all Morgan & Morgan entities] are handling personal injury claims for clients in the Philadelphia market.”

The disclaimer “it is not a referral service” was allegedly false or misleading because the Morgan & Morgan entities, in reality, refer all or nearly all of cases from Philadelphia clients to other law firms.  Billboard claims stating that “Morgan & Morgan” has “Offices Philadelphia” were allegedly false because Morgan & Morgan PA denies having an office in Philadelphia and instead states the separate entity Morgan & Morgan Philadelphia owns the Philadelphia office. Similarly, internet advertising that “ ‘[Morgan & Morgan’s] attorneys in our Philadelphia office handle cases in the following practice areas,’ referring to various types [of] personal injury claims, and identifying [Morgan & Morgan] as ‘Personal Injury Lawyers in Philadelphia’ ” were allegedly false for the same reasons.

The Morgan & Morgan entities and attorneys allegedly never intend to represent personal injury clients in the Philadelphia area but refers “all or substantially all” potential clients who contact Morgan & Morgan to another law firm for a referral fee.  The statements "I'm your lawyer,” “We’re all here for you,” and “You don’t pay us unless we’re successful” were sufficiently alleged to be literally false because Morgan & Morgan PA attorneys never represent, never are there for, or never are successful for Philadelphia based clients.

After discovery, Rosenbaum alleged additional statements are false or misleading and also sues other Morgan & Morgan entities and individuals.  The court refused “to examine each statement in a vacuum and strike Rosenbaum’s allegations about certain statements because those statements are not misleading in isolation…. The full factual record of summary judgement is the time to examine each advertisement in context and determine whether they are false or misleading instead of examining the statements in isolation based solely on allegations.”

Morgan & Morgan PA moved to dismiss as to new claims, arguing that billboards advertising “Morgan & Morgan Offices Philadelphia” weren’t literally false because “Morgan & Morgan” isn’t “Morgan & Morgan PA.”  The court disagreed; Rosenbaum alleged that the billboards in the Philadelphia area were literally false when they used the trade name “Morgan & Morgan” through the trademark owned by Morgan & Morgan Global to advertise an office in Philadelphia when Morgan & Morgan Global and Morgan & Morgan PA deny having an office in Philadelphia.

As for which defendants were responsible, Morgan & Morgan Global allegedly permitted its trademark “Morgan & Morgan” to be used in billboard ads stating Morgan & Morgan has an office in Philadelphia when allegedly neither Morgan & Morgan Global nor Morgan & Morgan PA had an office in Philadelphia. Allowing the trademark to be used in an ad with a literally false statement was sufficient to state a claim.

TM scholars' roundtable, part 5


Session 3: The Implications of Tam (and Brunetti)

What are the implications of the Tam Court’s First Amendment analysis for other subsections of Lanham Act Section 2?  What are the implications beyond Section 2?  For example, is dilution protection now vulnerable?  Did Brunetti correctly apply Tam?

Introduction:   Lisa Ramsey
Source-ID function v. other functions; the Court has to decide whether Slants is commercial/noncommercial, and expressive component is noncommercial; as to the commercial, Central Hudson would apply. If your mark is only conveying source ID information, Central Hudson applies.  Regulating expressive component, then strict scrutiny required.

But expressive and commercial are not mutually exclusive.  Descriptive terms can be both.  Comparative advertising can be both. 

Registrations can also chill speech. The Court needed to weigh the harm from registration and denial, but the Court didn’t do so.  Still, can apply the analysis to registrations: a registration for pink buildings can chill others’ use of pink on buildings.

Vague TM laws: infringement, dilution, secondary meaning.

Court rejected theories that would take TM/registration out of the scope of the 1A: government speech.  Could have made a categorical exclusion, but it didn’t do that.

Viewpoint v. content based. Is that distinction made because of the viewpoint of the lawmakers who enacted the laws?  Protecting against confusion isn’t disapproval of the content of the mark itself.  But other cases like Reed say that you don’t look at what the law’s motive was, but rather what the law does—it targets particular content and is thus content based.  You have to compare the speech of the P and the speech of the D.  The remedies target content.

Important to get this right.  There’s a debate about whether © is content based; it is.

Level of scrutiny: Court doesn’t decide what kind of constitutional test should apply in the TM context. Alito + 3 says won’t decide whether TM also regulates noncommercial speech; doesn’t even pass Central Hudson scrutiny. Process: identify substantial gov’t interests at stake, and determines whether laws directly further those interests, and then figure out what’s the harm to free speech. Thomas says strict scrutiny even if it’s commercial; etc. – strong signals.

Rebecca Tushnet: with Ramsey present I don’t have to be the optimistic advocate for working the law pure, so I can be the cynic.  Should Tam be understood as death blow for dilution/tarnishment and more?  Tarnishment seems obviously gone.

Incoherence in Alvarez about whether dilution is even distinguishable from confusion for constitutional purposes/lack of disavowal of USOC v. SFAA.  Can the legislature make wholesale decisions about confusion or must it work retail?  The various parts of section 2 very much depend on that if the interest at stake is only consumer understanding/confusion—e.g., prohibition on  registration of flags & insignia.

Separately, could dilution survive b/c confusion isn’t the only interest the gov’t is allowed to protect?  The appeal of a property concept (and its interaction w/a registration system—here is perhaps the weak point from the perspective of the libertarian-esque Justices; the rights created by registration are very clearly additions to the common law background and thus not “natural” in the way that rights stemming from use are).

Registration system as a whole and Central Hudson: the only interests that a registration system more directly advances than common law are (1) treaty compliance and (2) notice/administrative convenience functions. 

Tam allows you to avoid all this with viewpoint analysis, but Brunetti does not because it decides that scandalousness is content based, which is bass-ackwards given that scandalousness is far more obviously viewpoint based than disparagement, which applied to disparagement from the viewpoint of any targeted group.  I don’t think that “being mean” is a viewpoint (though those who know me might disagree).

Linford: On the treaty point, Eldred & Golan might allow the Court to say that Congress gets to make decisions in light of treaty obligations.  Maybe arguments are stronger for dilution/tarnishment, but their decision to wave off treaty issues in those © cases might signal a willingness to do the same.

McKenna: TM law is so coherent compared to 1A law.  What are the legitimate interests protected by TM? We are probably going to see cts assert that protection of property rights is a legit gov’t interest/water down scrutiny. But if that’s the case, then we lose Rogers, all the expressive use considerations—there’s no 1A need b/c those doctrines are meant to protect 1A interests.  It’s hard to conceive a way to understand these cases that doesn’t do sweeping things w/in TM unless we start making a bunch of distinctions w/o a difference. E.g., Tam: why doesn’t the Court approach this as a gov’t program; Alito says “those gov’t programs from previous cases are all about cash” (which isn’t true) but even if it were true why would it make a constitutional difference?

Dinwoodie: even more skeptical.  The doctrine seems like a mess, but wholesale/retail framing is useful.  He takes the property point distinguishing enforcement from registration, but is it a get out of jail free card?  Still need to look at less restrictive means.   TM does a lot of different things—industrial policy, etc.—Breyer gloms onto source identification, but were they invited to think about other things? 

Litman: SG raised the issue of Congress trying not to give imprimatur/anti-discrimination norms.

Dinwoodie: the problem w/those rationales is that they run into instinctive speech responses: you can’t suppress just b/c you don’t like.  But there might be issues about other things like notice and treaty compliance. 

Grynberg: Tam oral argument, the focus was on source identification—he wrote about why disparaging terms are inherently less likely to identify source [though that gets us back to wholesale/retail].

Burrell: In Brunetti: why was the court so desparate to get its hands on the 1A issues? Most systems wouldn’t have called FUCT scandalousness.

RT: (1) to get affirmed; (2) because vagueness is the other half of the 1A vise and so many other fuck-type marks had been rejected.

Dinwoodie: how much room is left open for a prophylactic approach?  Gov’t program type conceptualization of what TM is about that would prevent ongoing litigation of any TM issue from a 1A lens.

RT: I talk about that in my Tam paper a bit—given the interest in having a registration and infringement system, the costs are worth bearing.  [It may be that examination on absolute grounds is constitutionally required here; we couldn’t just register w/o examination and grant the rights we do.  But see ITUs.]

Ramsey: focus on regulation of commercial speech and misleadingness.  Gov’t has interest in fighting fraud, and also in promoting fair competition (including use of nonmisleading terms).  Any registration laws that promote competition (functionality, genericness, exclusions of nondistinctive symbols) will be ok, and facilitating truthful source ID is also ok.  Tam says gov’t interest in deterring offensive speech is not sufficient.  Not just protection of property rights, but property rights in language. There’s a difference b/t cars and colors.

Dinwoodie: EU allows property rights even upon application. [Asks about my speculation that under Central Hudson substantive examination might be required; though treaties leave us a lot of flexibility, the narrowest implementation of our treaty obligations easily allows substantive examination.]

McG: why wouldn’t non-examination and challenge post issuance be good enough to satisfy the 1A?

RT: compare to obscenity: it’s the closest analogy I can think of, though still distant—a licensing regime where you absolutely can’t put the burden on the affected parties to make a challenge. This is a regulatory regime very different from most others we’ve seen challenged.

Grynberg: property/TM conflation has been making a mess for a long time.  What’s different now? Why would that endanger Rogers?  [Because of Michelob Oily.]  As long as we maintain a commercial/noncommercial distinction …

McK: the significance of commercial/noncommercial is in obvious flux. [And obvious contradiction among types of law: © commercial is not 1A commercial.]

Realistically, there isn’t going to be significant will to challenge the whole registration system.  And so where it will play out is enforcement. The Court ignored an obvious issue: enforcement is prohibition of speech directly; denying registration is a much subtler impediment.  Surely our current functionality doctrines are not the least restrictive means for dealing w/functionality.  How do we decide whether a particular provision is necessary to promote competition, at which level of generality?  It’s a silly Q.

When you look at enforcement, a lot of times the P is objecting not entirely because of confusion but b/c of use on goods/in ways the P doesn’t like. That’s expressive at least in part.

Dinwoodie: compare to European concept of advertising function, whatever that is, versus source identifying function.

Linford: Sorrell v. INS: speech the state can’t regulate—how far are we from having no distinction b/t commercial and noncommercial speech?  Similar to Citizens United.  Would that have an impact in © and TM or would they handwave on a property basis? Maybe harder to handwave in TM than in ©.  Harper & Row addresses 1A some and still gives Ford a right of first entrance to the market despite speech rights. Campbell = release valve.  If you look at statutory offramps for noncommercial use and commentary, and the fact that we’ve doctrinally imported them into standard TM analysis, a court could limit Tam & Brunetti in the same way Eldred/Golan did—we can have our cake & eat it too.  Would that survive if we really do see shaving of the commercial/noncommercial distinction to nothing?

Diamond: speak more about blurring.

RT: Brunetti says there’s no gov’t interest in promoting some marks over others.  There’s also a Q of what blurring really is/what the harm might be, especially to famous marks.  Also, City of Cincinnati v. Discovery Networks: given the exemptions, the remaining coverage is limited and that small contribution to the overall harm means that the regulation flunks Central Hudson.

Beebe: Rogers step 0: is it an artistic work?  That seems to pick up all the commercial/noncommercial stuff.

Ramsey: consider a nonprofit using a mark to fundraise—that’s more of a TM/commercial use. But offering religious services—e.g., a breakaway congregation—seems so noncommercial that it should be protected.  For some marks it depends so much on context, and so some challenges can be facial while others can be as applied.

Eric Goldman: Denying benefits based on someone’s speech always seemed like an easy case of unconstitutionality to him.  Does think that enforcement is a different question.  Denying © registration to Democrats would also be a problem.  [But that’s not what disparagement was: it denied registrations that disparaged Democrats, Republicans, or nonvoters—and allowed Democrats any registrations except those that disparaged, as others were also denied.  But I understand I’ve lost that debate; the question is what else is viewpoint-based.  Tam is not much help in determining what the next viewpoint-based regulation will be.]

Bill McGeveran: Note that cases raising these issues will be thin on the ground—most dilution claims aren’t litigated and most dilution cases aren’t litigated alone but rather have confusion claims.  TM owners would have to be willing to press their luck.  [LV, I’m looking at you.]  Continued invocation in C&D letters might look better. Cts have a long list of avoidance doctrines, e.g., finding dilution unlikely or a 43(c) defense succeeding.  Won’t have to make other moves w/in 1A doctrine that would be bad.  Harm = vestigial doctrine w/ zombie life in C&Ds.  Remember that parodists no longer lose.  Radiance v. NAACP district court opinion v. appellate opinion—the former looks like a case from the 80s. Judges in the last 20 years want to look like defenders of free speech. These cases about registration may continue to have real-world effects in the registration system, and it’s conceivable they could break out into infringement but thinks the likelihood is really low.

Dinwoodie: motion practice to isolate constitutional issue?

McGeveran: in almost any scenario the nonconstitutional issues would be available on the motion too.  Section 2 bars don’t take away from the core function of TM as judges see it.  To invalidate dilution, a judge would have to take away a piece of TM rather than expanding TM protection as w/invalidating a §2 bar. 

McK: but you’d be supporting the speech of someone else.

McG: whereas allowing registrations increases the scope of TM.  Prediction: it’s a big ask to tell a judge to get rid of a congressionally enacted protection.

Dinwoodie: you could get a dilution claim for an opposition—the Coach case.

McG: thinks that’s more likely.

Grynberg: consider impersonation—could we have a specific claim for impersonating an entity even in a nonprofit context—impersonation as defamation or other harm?

RT: Eugene Volokh has a great paper about, among other things, using defamation to deal w/impersonation cases. Consider also the treatment of false advertising cases alleging false patent claims: courts have imposed a higher intent requirement than ordinary Lanham Act cases; we could do something similar with political/religious cases like United We Stand or religious schism cases, requiring actual confusion (the problem remaining being that they won’t have deceptive intent insofar as they will believe they’re the real thing, and this is a real conflict that we will have to resolve).

Bently: EU takes the position that denying registration puts very little burden on speech, and if there’s some legitimate interest in preventing commercialization of the sign, that’s good enough.

RT: but aren’t those two things the same? If there’s no burden, then there’s no deterrence of commercialization—those are commensurate.

Bently: yes, but we’re ok with that—similar things in patent law. Some is about artificial incentives—we don’t want extra incentives to do undesirable things but we won’t prevent them if they’re truly committed.

Dinwoodie: European/British approach: we have no problem making gov’t judgments of what’s un/desirable where US would leave it to the market.

Burrell: Australia’s scandalous marks provision has been almost entirely hollowed out. Where he sees that as undesirable—case last year where Commonwealth Games Committee appropriated a term from the local indigenous language, while building a stadium in the middle of traditional land.  TM Office says it doesn’t matter b/c we’re banning some terms & reserving rights for indigenous rights/important people.  The Office is pushing the line: if we don’t like it, just ban the use, which absolves us of any responsibility. He’d prefer an intermediate category w/o ban but no registration either.

Friday, April 13, 2018

TM scholars' roundtable, part 4


Session 2, Cont’d

Mid-Point Discussants:                      
Mike Grynberg
Belmora may do very little.  But: Belmora may be bad if it discards important checks, one of which might be territoriality.  Another idea: arguably undermines systematicity of TM, its existence as an autonomous body of law that courts apply. Casually discarding territoriality is problematic in itself and also in understanding what TM is—Jeremy Waldron on the importance of being able to see how a change ripples through a system.  Belmora undermines the idea that consequences flow from not having a TM/not having a registration.  We don’t know what happens when 32 and 43(a) are not equivalent [and I would argue that there’s a hydraulic push—TM owners then claim that they shouldn’t be worse off b/c they don’t have a TM, so 32 has to be at least as broad as 43(a)].  By throwing more up for grabs in inchoate unfair competition, that undermines pro-D thinking in TM law that hasn’t been systematized, such as the 7th Circuit style/plausibility analysis.  Tabari: 9th Circuit talks about what people expect when they see TMs in domain names.  Handwaving about consumer sophistication—but will Belmora allow a second bite at the apple in terms of unfairness claims.  MTM: court says no one thinks there’s a connection w/Amazon b/c of Amazon search results, but would Belmora undermine that by allowing a rump unfair competition claim.

Finally, Belmora exacerbates the problem of TM scope.

Jeanne Fromer: trade secret might provide some insights about unfair competition and its path.  TC starts out as common law in the courts; turns into a multifactor test in Restatement, and then gets codified in a way that offers guidance about what us be found. Uniform Trade Secret Act is more regimented than 43(a), though “improper means” creates uncertainty.

Belmora: the more it’s not applied, the more it will not be applied. Possible to push back on how this is a very limited exception [thinking here of INS v. AP].  Backdoor protection of TM-excluded matter: do we want to understand UC as a matter of not wanting to go beyond TM’s internal limitations, or is it just that TM stops and some other regime starts?  We have ways of thinking about doctrinal overlaps in other areas, such as TM/patent, trade secret/patent.  One of her worries about Belmora: remedies. When TM wouldn’t give a remedy, shouldn’t give that remedy through UC. That might be one way to think about the interface.

McKenna: what’s unusual about Belmora v. old style cases: the latter were things that couldn’t be marks b/c of their nature. That was a recognition that they weren’t susceptible of ownership.  We basically said hands off those things as such, even though they might have caused some confusion. Belmora’s not like that: Flanax can be and is a mark, it’s just not owned by the entity asserting rights in the mark.  You can’t avoid the ownership Q in that case; it’s not about using the TM component v. the nonTM component. You have to confront whether UC will provide a remedy not b/c TM law is silent but b/c TM law has affirmatively said there’s no right.

Fears Lanham Act language that will be cited is that sentence that says that 43 doesn’t require a mark used in the US.  W/o discussion of the reason that someone doesn’t have TM rights.

Dinwoodie: is TM law silent about genericity?  He thinks that’s affirmative too.

McKenna: Generic is a tough one.  Takes the point.  How you understand what the decision is—but still Belmora is about some content unambiguously w/in the scope of TM.  Could be used to argue that, if you have a fanciful mark and no likely confusion, a remedy is still available.

Dogan: Antitrust as a road not taken: choosing between balancing pro and anticompetitive aspects of behavior v. using subjective motivation of the actor.  If a product “improvement” has anticompetitive effects w/o being a better product, there’s no social value. Implicitly, Belmora etc. are courts saying “you’re not necessarily violating rights but going further means you’re not engaging in behavior w/any social value.”  Tea Rose/Rectanus also looks at good faith/reason for adoption; protects the innocent.

McGeveran: reminder that court in Blinded Veterans talks about how the remedy could include requiring a different name as long as “blinded” and “veterans” are part of it.  Allows D to appeal fairly to the desire of the public to aid blinded veterans—the policy reasons why genericness exists.  But still talks about the goodwill P has built up, when generic terms maybe shouldn’t have goodwill b/c they’re not marks.  [McKenna says that’s not necessarily true b/c generic terms could have minority secondary meaning for a subset. Not a mark is not the same thing as lacks source-designating meaning.]

Bone: wants to say that it’s still all TM; where a term has secondary meaning for only a minority of consumers, it’s still a mark and it’s still owned but the remedies change. The cost of separation is that all the remedial flexibility goes to UC, and the breadth of remedy may be unwarranted for every TM instance.  If you said it was all one big thing, called TM for argument’s sake, then you have a series of competing policies to look for a remedy in a given case.  Maybe you have rules of thumb, but at least it’s being done in the same box.

McKenna: haven’t you just mooted the point of validity analysis?

Bone: no, b/c at some point it will make sense for policy reasons that the costs of tinkering w/remedy are greater than benefits in avoiding consumer confusion and you should just have a no-remedy.

McKenna: so you always have a valid mark?

Bone: until the very endpoint where no relief is available—where there is no entitlement to relief, there’s no mark.  Or we could say you still have a mark, but no remedy.  The former communicates freedom to use more clearly. [This really has no room for registration, does it?]

Ramsey: chilling effect of demand letters, but that’s all about notice.

Dinwoodie: you’re making normative choices about security/predictability.

Bone: I’m just not separating into 2 boxes.

Sheff: non-consumer welfare/efficiency based perspectives: Blinded Veterans presents a bit of a problem b/c we have a conflict b/t access to generic concepts and consumer confusion.  That’s a distribution problem, not an efficiency problem, and consumer welfare can’t answer the question of what we should do. We could look at it as a Kaldor-Hicks problem—could try to compensate losers for what they lose from the result we arrive at.  Or we could look at who is good and who is bad—relationships among producers, not just relationships b/t consumers and producers. TM and especially UC should be understood as being (also) about relationships b/t producers and what they owe each other. One reaction is to say that confused consumers will just have to learn; they aren’t thinking about it in the way they should be, and that’s a moral judgment. Or we could consider them vulnerable and in need of protection, and those of us who can tell the difference will just have to accommodate them by giving up the non source identifying meaning to protect those who do see it as source identification. Or we could try to accommodate both to the extent we can. On the producer side, there has to be independent normative content to figure out what producers owe each other. Belmora: easier case that the D is doing something wrong, which doesn’t have to be filtered through what Belmora is doing to consumers.  If we thought more about duties, we might have an easier time thinking about Belmora, though maybe it just collapses into naked misappropriation reasoning.

Burrell: Unconvinced that remedy is problem in Belmora.  Bodybuilding company wants to register Superman for bodybuilding products in Australia; DC opposition initially rejected b/c has no blanket rights in Superman, but when the product is released has a big stylized S on it.  Bad faith is clear and the mark is cancelled on appeal; barring all uses of Superman by this bad faith actor is not a problem, though he understands the problem with slippery slopes/courts losing sight of the nuance.

McKenna: if evidence of bad faith is just that they’re using a mark that’s owned by someone else, that’s still a problem.

McGeveran: presumably there is a robust UC claim, in false advertising or otherwise, if Belmora falsely pretended to be a headache drug that was unavailable in the US.  Having said that, why do we get in a twist if the nature of the bad faith deception has to do with misleading around source? 

RT: because bad faith isn’t an element of false advertising and shouldn’t be.

McKenna: the content of the false statement about the drug ingredient isn’t ownable by anyone else.  But if you admit that there is the possibility of ownership and that ownership has territorial boundaries, we’re artificially dividing up the world.

McGeveran: but what if Unilever, which produces Nuprin, sues instead? Surely we don’t think their false advertising claim is a problem.

Sheff: who is the victim and what is the evidence?  Either the consumer is the victim and the harm to the mfgr is the evidence, or vice versa.

Litman: but that’s not what the 4th Circuit said. It said that if you sue under 43(a) we don’t pay any attention to longstanding rules b/c this section doesn’t mention them. Erosion of territoriality and the idea of evading pesky doctrinal limitations by switching sections. 

Sheff: if the victim is people in the US, that’s a false advertising harm. If the victim is in Mexico but the evidence is in the US, maybe not. 

Dinwoodie: no reason to think that UC claims should be territorial—10bis indicates that the standard is an international one.

TM Scholars' roundtable, part 3


Session 2:  The Policy and Doctrine of Unfair Competition Claims

Introduction:  Jake Linford: Hoping for a sharper line b/t UC and TM, much as we have a relatively sharp statutory line b/t TM infringement and dilution to the extent we can define dilution.  Can you sensibly plead all 3 causes of action. If you think Kellogg/Blinded Veterans is the right kind of UC w/a limited remedy (ct said unnecessary in Kellogg—Ginsburg points out in BV that the dct should consider whether that’s necessary). A release valve for the hydraulic pressure where there is confusion, and remedies are then cabined. We don’t have that world.

Belmora seems ok from a consumer protection perspective, though it pushes hard on territoriality.  [The existence of a false advertising claim, with its stronger limits on what is actionable in the form of commercial advertising/promotion and materiality, is also important here.]  Checking judges’ work and Beebe on factors: not every multifactor test does balancing for us, and LOC test doesn’t.  On the Q of release valves: Belmora opens some room for arguments that haven’t succeeded and some that have, e.g. DC Comics v. Daily Planet—an unfair competition/free riding claim.  Limited remedy against a bike lock manufacturer or a TV program.  [But the remedy granted these days isn’t limited.]

Belmora’s subsequent use: restatement that 43 claims are supposed to look like 32 claims, but appears to help people get past the motion to dismiss stage.

Jessica Litman: Lanham Act drafters assumed unreflectively that unregistered TMs would continue to be actionable as they had been before the Act, rather than changing what they meant; that’s why they included nationwide priority and incontestability, as a bribe, b/c registration wasn’t required.  Unfair competition crept in late, in 44(h), b/c Congress believed we’d signed a treaty requiring it.  44(i) extended that protection to US citizens at the last minute b/c it was unfair to protect only foreigners. When Congress was passing the statute, it didn’t think of 43(a) as the source of protection for unregistered marks or unfair competition. Envisioned as early as 1920 as a distinct provision about intentionally deceptive marketing rather than as a home for unregistered mark infringement. Less about passing off and more about marking cotton as wool.

We are all vulnerable to the delusion that the law we first learned makes more sense than the law as it has later developed.  Litman was in law school b/t Inwood and Two Pesos.  In the 1980s, the legal system was the system McKenna suggested was sensible: 32 was registered marks w/presumptions of validity and ownership; had started to recognize common law TM infringement under 43(a), but then you had to prove ownership, distinctiveness, secondary meaning (even for inherently distinctive marks), geographic and temporal priority. Before false advertising got complicated (literal falsity/implicit falsity) it was just independently actionable deceptive marketing. The standing requirements were loose—if you could plausibly allege damage from the false marketing, lack of direct competition wasn’t a standing problem.  Two Pesos mucked it all up.  Then false advertising developed epicycles and complications.  But if you look at 43(a) through that lens—2 distinctly different things actionable—then Belmora is surely wrong as a matter of common law TM infringement but it is really understandable as false advertising, intentional deception of consumers.  More useful to understand Belmora as a species of false representation law than a massive expansion of common law TM infringement law destroying territoriality.  Which raises questions about the appropriate remedy: remedy based on the word Flanax would be a TM remedy.

McKenna: but if the remedy against the word comes from (and against) someone who owns TM rights in the word, then it’s a TM back door.

Litman: intentional deceptive marketing. [Though intent is currently not a requirement for Lanham Act false advertising liability.]

Discussant:                  Barton Beebe 
Belmora was shocking at first, then got used to it, then became shocking again primarily b/c of its rejection of simple territoriality.  A global Tea Rose/Rectanus doctrine in which rights extend as far as reputation does, even without use? Important footnote 8; impression is that it was added later.  Plaintiffs who rely only on foreign activity may have proof difficulties. A few isolated consumers who are confused isn’t enough; a case w/o other misleading conduct would face difficulty. It’s different where the cornerstone of the D’s business model is passing off.

If Belmora catches on, is there any reason to hold onto well-known marks/Grupo Gigante?  The latter has a heightened secondary meaning requirement, whereas Belmora apparently gives you a path to success if there’s more than a few isolated consumers.  A few follow-up cases: DC dct suggests Belmora, even if applicable, wouldn’t matter b/c no proximately caused harm; Md. case saying that there are two elements to a claim, proximate cause + injury—the case that motivates the worry that courts will lose track of the details, history becoming legend/myth.  All of the contextual cues could be loss. Another NJ case finding Belmora plausible, though obstacles of proof may exist.  DSC: domestic dispute, no foreign mark—treat false designation the same as infringement, but see Belmora: though not directly relevant here, UC claims don’t always require ownership of a valid mark b/c 43(a) goes beyond TM, citing Belmora/Blinded Veterans.  Already we’re starting to see the details wearing away. What will be left could be bad black-letter law. Optimistic version: Following the European example, appellate courts might treat the distinction w/more sensitivity.

Bone: Nothing much turns on calling Belmora a TM case.  ITC v. Punchgini: not a lost sales case, so it would have to be a reputation case, which then turns on how broadly reputation harms are conceived.  Bad literalism, invoking Lexmark: interpreting the Lanham Act w/o recognizing that it was enacted against a backdrop of common law principles that should be read into the statute, but aren’t.

Ramsey: not as troubled by Belmora b/c has taught well-known marks. It’s an exception to territoriality for the TM owner, but not for the consumers who are confused. 

Sheff: the US registrant in Belmora is using their US property in ways that harm someone else over the border.  Maybe a way to think about it. 

Two Pesos: held that inherent distinctiveness as a question for the jury (where as Litman points out the jury was instructed that a mark is inherently distinctive if it’s not descriptive) and that might not be right. The fact/law distinction might do some work here.

McKenna: Likes Litman’s description of Belmora until the end.  Need a body of law in which the claim is recognizable. Hard to tell in 4th Circuit’s description whether this is a TM case or a false advertising case. Extraordinarily likely that the details will be lost w/o vocabulary to articulate it as a distinct form.  Saying that remedy can cover the mark itself invites everything to be sucked into Belmora.  Reminds me of early version of the Rogers test where TM owners would say “it’s explicitly misleading because it causes confusion”—only in the last 10 years did courts explicitly reject that argument. [As they have meanwhile created that same problem with nominative fair use, turning factor three “do nothing else” into factor three “isn’t confusing.”]  If the evidence that it’s false advertising is the use of the mark itself, then plaintiffs will argue that nothing else mattered (intent, other deceptive acts, nature of the packaging).  If the court made clear that it’s hands off the word, that risk would diminish.

Litman: cancellation is available for marks used to mislead about source.

McKenna: Q is whether use of the mark alone, w/nothing else, ought to be able to satisfy that standard. 

RT: [Others’ approval of Belmora makes more sense for me as a story about source confusion but when I think about IIC and other extensions of confusion theory I get very nervous: another version of Mark’s concern.  What if it had been “if you like Flanax, you’ll love our Forex”?]

I want to talk about 43(a)’s non-exclusion of functional matter: 43(a)(3) says “In a civil action for trade dress infringement under this chapter for trade dress not registered on the principal register, the person who asserts trade dress protection has the burden of proving that the matter sought to be protected is not functional.”  But it doesn’t say what happens if the claimant fails to meet that burden.  Blinded Veterans/Kellogg remedy still available?  And yet everyone has generally assumed that the result is no protection at all, for pretty good reasons from a TM perspective.  First, should we provide limited remedies for functional matter under 43(a)?  Second, could we infer from the opposite conclusion, the availability of limited relief under 43(a) for functional matter, that relief under 43(a) should be presumptively limited?  If not, and if all of 43(a) is just unfair competition, what function does the language in 43(a)(3) serve?

Dinwoodie: language was inserted at a time when 43(a) was understood to be more limited [though I haven’t decided which way I think that cuts]. Notion of use has expanded internationally in the US.

Doesn’t think that using Lexmark will compress the factors in confusion when it’s actually on remand.

Litman: Thinks Tam rejects Two Pesos: registration is substantive, it makes a difference; unregistered marks are not the same as registered marks. Tam doesn’t fill out what it means by that, but if it’s true it’s not the case that unregistered and registered marks are the same, as Two Pesos said.

Sheff: could be substantive in some ways and not in others. 

Dinwoodie: Two Pesos on distinctiveness could be the same, while other aspects could be different.

Litman: but cf. Beebe’s argument about how details get washed away. She’s predicting.

McGeveran: FTC also uses “unfair” and that helps you think about it.  Would Belmora’s acts have been enforceable by FTC/AGs as deceptive/unfair trade practices harmful to consumers? Obviously yes: they were misrepresenting their heritage to bodegas/Latino customers. Unfairness has a three part test: practices that cause substantial consumer harm not outweighed by benefits to consumers and competition, and consumers can’t avoid the injury by themselves. A different approach to understanding marketplace behavior. Remedy will often be remedial, not penalty.  What bothers us about Belmora is why Bayer gets to be the enforcer.  Unjust leg up b/c Bayer sells Aleve—but that’s not the court’s primary theory [of false designation; it is the theory of false advertising]; it’s instead that Mexican customers won’t buy in Mexico and will for some reason wait to buy in the US, because that’s totally plausible as how people buy headache relief medicine.  We’re offering up unfair competition if TM theory doesn’t reach consumer harm, but he thinks that false advertising/non-TM sources of consumer protection law can take care of that w/o needing free floating UC.

Linford: Zechariah Chafee writes in 1940 about what unfair competition might be—looks at Keeble, also at FTC.  Sorts out ways of thinking about UC.  Holmesian/Wigmore tort about harm, harm causation, excuse/justification.  Most of the work occurs at the last part.  There’s a presumption in that presentation that P is entitled to something (if you think about TM as property).  Be careful: if I don’t have rights in the US, I don’t have property.  I haven’t secured rights in the space against metaphorical infringement.  Perhaps, Chafee says, we’re trying to figure out how to weight individual and social interests—perhaps what looks unfair is actually beneficial to consumers.  Belmora: not so much b/c there are plenty of sources for this drug.

Bone: Chafee’s restatement of Wigmore is that competition is presumptively harmful & tortious, but it’s allowed b/c it’s privileged.  First Restatement of Unfair Competition therefore speaks of a privilege to compete, not a right, b/c it requires a policy justification.

Ramsey: Analogous to Rogers, you can’t find UC based solely on the use of the TM-unprotectable matter.

Bone: Elegant distinction that doesn’t hold up. Why draw this distinction? Just describes a doctrinal pattern.

Ramsey: competition, free speech.

RT: my problem is the realist objection/nominative fair use problem—an action/inaction distinction is unsustainable when P’s lawyers are routinely so creative.  True, Belmora did a number of things, but it’s hard to imagine Bayer being cool with an orange box; it is plausible that putting Flanax on headache medicine is the core of the confusing conduct and that nothing more is required.

Dinwoodie: institutional Q re FTC: is the existence of another institution to deal w/ conduct evidence that we should leave them alone to do so, or is it evidence that the conduct is nasty enough that we should suppress the conduct at the behest of someone else?  Can argue it either way.

Grynberg: is it really a slam dunk?  Having a new brand in the US, where there is no US owner/the mark is up for grabs, is a consumer benefit.