Abrams, Howard

Eldred, Golan and the Soul of Copyright

Howard B. Abrams Professor of Law, University of Detroit Mercy School of Law [email protected]

The article explores the decisions in Eldred v. Ashcroft, 537 U.S. 186 (2003), and Golan v. Holder, 565 U.S. ___, 132 S. Ct. 873, 181 L. Ed. 2d 835, No. 10-545 (U.S. Jan. 18, 2012), available at http://www.supremecourt.gov/opinions/11pdf/10-545.pdf and their impact on several issues. The first issue is the extent to which the Constitution’s statement that the purpose of the power granted to Congress is “[t]o promote the Progress of Science,” U.S. Const. art. I, § 8, cl. 8, constrains the scope of copyright statutes enacted by Congress, if at all. The second issue is the impact of these decisions, particularly Golan, on the intersection of copyright with the First Amendment’s free speech provision. Underlying these doctrinal inquiries is the question of the impact of Justice Ginsburg’s majority opinions in both Eldred and Golan with their broad view of Congress’s power under the Copyright Clause when a far narrower and more tailored judicial response would have upheld the legislation in question. What does this do to the public domain? The next obvious candidates for protection under the Golan doctrine are sound recordings fixed prior to February 1, 1978, and United States works that were forfeited for failure to comply with the formal requirements (notice, registration) of prior U.S. Copyright Law. But the language of Golan seems to invite even more removal of works from the public domain. Beyond the confines of the ongoing copyright-free speech debate—it is not dead by any means—Golan has serious implications for future free speech decision making. Golan‘s holding that no First Amendment scrutiny of copyright statutes is required because of the existence of the idea-expression distinction and the fair use doctrine already embodied in copyright law, raises the possibility, perhaps even the probability, that scrutiny, whether intermediate or heightened, will be bypassed, at least in the case of content neutral regulations of speech. Less broadly, Golan’s position that the copyright doctrines of fair use and the idea-expression distinction are adequate protection for free speech interests in the context of copyright will necessarily force a reexamination of these doctrines. It is submitted that this will be the most important short term effect of Golan for copyright practitioners. From de novo Review to Informal Deference: An Empirical Examination of Patent Claim Construction

J. Jonas Anderson Assistant Professor of Law, American University, Washington College of Law [email protected] | Bio | SSRN

Peter S. Menell Herman Phleger Visiting Professor of Law (2011-12), Stanford Law School Robert L. Bridges Professor of Law and Director, Berkeley Center for Law & Technology, University of California at Berkeley School of Law [email protected] | Bio | SSRN

Claim construction plays a central role in nearly every patent litigation. It is also critical to patent prosecution, patent licensing, and cumulative innovation by delineating the scope of patent protection and the opportunity to work around patent boundaries. Yet since the Supreme Court’s 1996 Markman decision, the Federal Circuit has struggled to articulate a consistently reproducible methodology for construing the scope of patent claims, resulting in high reversal rates and consternation among the federal judiciary, litigants, and patent prosecutors. Using a comprehensive, granular, hand-coded database of all Federal Circuit decisions between 2000 and 2011, we examine the evolution and current status of claim construction jurisprudence. We find that immediately after the Federal Circuit’s 2005 en banc decision in Phillips v. AWH Corp., the claim construction reversal rate dropped precipitously and has remained substantially below the pre-Phillips levels. We explore several competing hypotheses to explain this drop and conclude that the most plausible explanation was a shift away from de novo review and towards a more deferential review of claim construction decisions. The paper also reports several other patterns in claim construction jurisprudence.

Creation Norms and Authorship: The Porgy and Bess Controversy

Olufunmilayo B. Arewa Professor, University of California, Irvine School of Law [email protected] | Bio | SSRN

A controversy erupted in 2011 over a revamped version of the seminal opera Porgy and Bess, which was composed by George Gershwin, with lyrics primarily by DuBose and Dorothy Heyward and contributions by Ira Gershwin. This new version, which was supported by the estates of George Gershwin, DuBose and Dorothy Heyward, and Ira Gershwin, sought to transform 1935 opera into a Broadway musical starring four-time Tony award winning actress Audra McDonald and Norm Lewis. To effect this transformation, the director, Diane Paulus, and Pulitzer Prize winning playwright, Suzan-Lori Parks, proposed a number of modifications, including adding new scenes, changing dialogue, inventing biographical details, and adding a more upbeat ending. The prospect of such changes sparked a furor. For example, in a New York Times letter to the editor, Pulitzer Prize and Tony Award winning composer and lyricist Stephen Sondheim condemned the revised version, focusing on a number of issues, including the rebilling of the piece as “The Gershwin’s Porgy and Bess,” which omits mention of DuBose Heyward, who wrote many of the lyrics. Most importantly, Sondheim criticized “the disdain that Diane Paulus, Audra McDonald and Suzan-Lori Parks feel toward the opera itself.”

The controversy that emerged about Porgy and Bess reflects underlying conceptions of authorial intention that are relevant to copyright. Although George Gershwin, Ira Gershwin, and DuBose and Dorothy Heyward are all long dead, the conception of performance as guided by authorial intention remains a strong force long after their respective deaths. This is true not only for the creators of Porgy and Bess, but with respect to a broad range of creators of both classical and contemporary music (including what many refer to as classic musicals). Conceptions of authorial intention have significant implications for copyright and creativity. Norms that insist on strict adherence to notions of authorial intention may reflect an ethos of sacralization that is often consistent with dominant copyright assumptions about creativity. This sacralization ethos may, however, negatively impact the ability of future creators to reinterpret and change creative works, which is an important source of creativity. Further, for works like Porgy and Bess, which are considered by some to be offensive, modification may play an important role in maintaining a work’s continuing relevance. As the Porgy and Bess controversy illustrates, these norms may arise from sources other than creators themselves. In this instance, the estates of all original creators consented to modification of the work. Audiences and other creators such as Sondheim may also significantly influence how works are used and modified. This article suggests that negotiating the divide between authorial intention and reinterpretation is key to both the effective operation of copyright as well as the introduction of innovative and creative interpretations in musical and other contexts. Who Owns the Social Media Account?

Zoe Argento Assistant Professor, Roger Williams University School of Law [email protected]

What rights does an employer have in its workers’ social media accounts? Increasingly, using social media is a key part of a company’s branding strategy, consumer outreach, and market research efforts. Success in the social media context, however, typically requires a sense of personal interaction. Accordingly, companies rely on their employees not only to converse with the public on behalf of the company, but also to inject their personalities into the conversation. The goodwill associated with an account and the build-up of links enabling direct communication with key communities can be quite valuable to a company. When does the company have a right superior to that of a worker to an account? Due to the personal nature of these accounts and their dependence on third party social media services, the accounts would seem to fall outside of the employer’s purview. Yet employees use them at least in part to further their employer’s interests. On the one hand, companies should be rewarded for their efforts to build their brand, serve their customers, and conduct market research with the right to keep the account and its associated value. On the other hand, the public relies on the authenticity of the personal voice behind the account. Indeed, the value of the account – both to the employer and to the public – often depends on its expression of a specific personality. These concerns must be balanced in determining who has the superior right of access. The Uneasy Case Against Copyright Trolls

Shyamkrishna Balganesh Assistant Professor of Law, University of Pennsylvania Law School [email protected] | Bio

The copyright troll and the phenomenon of copyright trolling have thus far received little attention in discussions of copyright law and policy. A copyright troll refers to an entity that acquires a tailored interest in a copyrighted work with the sole objective of enforcing claims relating to that work against copiers in a zealous and dogmatic manner. Not being a creator, distributor, performer, or indeed user of the protected work, the copyright troll operates almost entirely in the market for copyright claims. With specialized skills in monitoring and enforcing copyright infringement, the troll is able to lower its litigation costs, enabling it to bring claims against defendants that an ordinary copyright owner might have chosen not to.

As a matter of law, the copyright troll’s model usually complies with all of copyright’s formal rules. Courts have in turn struggled to find a coherent legal basis on which to curb the copyright troll’s activities. In this Article, I show that the real problem with the copyright troll originates in the connection between copyright’s stated goal of incentivizing creativity and the enforcement of copyright claims, which discussions of copyright law and policy fail to adequately capture. Copyright claims, much like other private law claims, are systematically under-enforced. This under-enforcement is neither purely fortuitous nor indeed marginal to the system, but instead operates as an important safety valve that introduces an informal breathing space into copyright’s functioning. Over time, this under-enforcement results in a balance between claims that are actionable and enforced, and those that are actionable but tolerated. It is precisely this balance that the advent of the troll disrupts, since it seeks to enforce claims that copyright owners would have otherwise tolerated.

This Article unpacks the connection between the incentives to create and enforce in copyright to show why the troll’s actions are indeed problematic despite its formal compliance with copyright’s legal rules. In so doing, it shows how the troll exploits the secondary market for copyright claims, which might otherwise have important upsides, and argues that a permanent solution to the problem will entail targeting the troll’s incentive structure rather than using any of copyright’s existing doctrines. Trademark Law, Branding and the Oppressive Leveraging of the Female Gender

Ann Bartow Professor of Law, Pace Law School [email protected] | Bio

At the intersection of advertising, brand management and trademark law, there is a tidal wave of sexism. Focusing particularly on luxury goods, this paper describes the ways in which women as a class are reduced to designations of source and as signifiers of "distinctiveness" for trademarks and branding purposes. It provides an overview of the social harms caused or exacerbated by these practices, and suggests ways that advertising law and trademark law could be modified to reduce some of the deleterious ways in which the female gender is leveraged in commerce. Copyright and the First Amendment: Comrades, Combatants or Uneasy Allies?

Joseph P. Bauer

I have begun work on an article tentatively entitled “Copyright and the First Amendment: Comrades, Combatants or Uneasy Allies?” This piece attempts to take a different perspective on an issue which has already attracted the interest of a number of other scholars.

The apparent conflict is obvious. The Copyright Clause in the Constitution provides that “The Congress shall have Power ... To promote the Progress of Science..., by securing for limited Times to Authors ... the exclusive Right to their respective Writings....” However, the First Amendment famously provides that “Congress shall make no law ... abridging the freedom of speech, or of the press.” Since the copyright laws permit the copyright owner to enjoin others from speaking or writing (or copying and distributing) certain words, music, photographs, audio-visual works and so forth, and to obtain monetary relief for such unauthorized acts, hasn’t the Congress done precisely what the First Amendment seems to preclude – enacted legislation which limits the speech or writing of persons other than the copyright owner?

My article, and presentation, will proceed as follows. First, I will look to the learning that can be drawn from the history of these two provisions. Next, I will look at the goals of the copyright and first amendment regimes – seeking to identify those places where they clash, and then identifying the ways that these conflicts can be minimized by harmonization of those goals. Then, I will look to the internal mechanisms in the copyright regime – principally the idea/expression distinction, the fair use doctrine and copyright’s supposed limited duration – that have been offered by courts to downplay the clash. Finally, I will discuss the situations where none of these solutions works – where “the rubber meets the road.” I will offer mechanisms for identifying these situations, and explain why, when in doubt, the First Amendment should prevail.

Play First versus Pay First: Exploring Cumulative Innovation in Patent & Copyright Law

Stefan Bechtold Associate Professor of Intellectual Property, ETH Zurich [email protected] | Bio | Publications

Christopher Buccafusco IIT Chicago-Kent College of Law

Christopher Sprigman University of Virginia Law School

Patent and copyright law differ in the way they deal with cumulative innovation – the situation when one party invents or creates a new work and another party develops an improvement for it. While copyright law offers little protection to follow-on innovators, patent law allocates some property rights to the follow-on innovator.

In patent law, an innovator may receive a patent on an improvement of another’s invention. However, such improvement patent does not prevent the follow-on innovation from infringing the original patent. Rather, the follow-on innovator must receive a license from the original innovator if she wishes to market the improved invention. Also, if the original innovator wants to use the improvement patent, he has to license this patent from the improver. By contrast, copyright law entitles the original author to control derivative works. In order to build upon a copyrighted work, a follow-on creator must ask the original creator for permission. Unlike patent law, copyright law enables original creators to capture most of the value of improvement made by follow-on creators. In patent law, a follow-on innovator may innovate and then pay. We refer to this as patent law’s “play first” rule for improvements. In copyright law, she must pay first and may then innovate. We refer to this as copyright law’s “pay first” rule for improvements.

The justifications and implications of this difference are ambiguous. Some authors have argued that the copyright regime leads to decreased incentives for follow-on innovation. On the other hand, while the patent regime may increase follow-on innovation in the first place, it may create hold-up situations once licensing negotiations start. Prospect theory argues for assigning strong property rights to the original innovator, but cannot really explain the different treatment in patent versus copyright law.

This project is the first to shed some empirical light on this difference between patent and copyright law. In an experimental setting, two creators engage in creativity tasks and may build upon the other’s solution. By testing play-first versus pay-first regimes, we measure the impact on cumulative innovation in both regimes. Bleistein; or, Intellectual Property Law and the Problem of Aesthetic Progress

Barton Beebe Professor of Law, NYU School of Law [email protected]

The Intellectual Property Clause of the U.S. Constitution empowers Congress “to promote the Progress of Science and useful Arts.” Strangely, in speaking only of the “useful Arts,” the clause takes pains to exclude any reference to a rather significant category of intellectual achievement: the fine arts. Working from this strange and previously unremarked aporia in the constitutional text itself, this paper asserts that from its very origins in the Intellectual Property Clause, U.S. intellectual property law has had a profound problem with the aesthetic, and not just with fine art, but with all aesthetic expression if not all aesthetic experience. While intellectual property law has not hesitated closely to engage the purportedly non-aesthetic world of the “useful,” the “utilitarian,” or the “functional,” it has struggled to define what aesthetic works are, how they should be judged, and what utility, if any, they possess. The result has been doctrinal incoherence, examples of which appear throughout American law: in trademark law’s unlikely concept of “aesthetic functionality”; in copyright law’s fantastical definition of the “useful article” as “an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article”; in one test for copyright infringement, which asks judges to determine whether the “ordinary observer,” upon seeing the parties’ works, would “regard their aesthetic appeal as the same”; or in design patent’s test for aesthetic “non-obviousness” in light of the prior art, the essence of which one judge characterized as “‘Gee, they look pretty much the same to me.’” The common root of these and many other such problems, I suggest, is that American intellectual property law has refused to reconcile the law’s fundamental purpose, the promotion of progress, with the aesthetic. Our intellectual property law and commentary speak routinely of the progress of knowledge and technology—the progress, that is, of instrumental reason. But, like the framers, we cannot seem to bring ourselves to speak of aesthetic progress.

There is a reason for this, and it is found in the history of American copyright law, and in particular, in the 1903 Supreme Court case of Bleistein v. Donaldson Lithographing Company. The purpose of this paper is to evaluate how Bleistein extinguished the concept of aesthetic progress in U.S. copyright law, what the consequences of this loss have been, and how and to what end the concept might be revived. In an effort to demystify somewhat the admittedly highly enigmatic concept of aesthetic progress, Part I reviews the early history of the concept in the eighteenth century and then draws upon the increasingly influential school of aesthetic thought known as “pragmatist” or “everyday aesthetics” to begin outlining a contemporary understanding of the concept. Part II recounts the story of aesthetic progress in the copyright case law, from its quite modest emergence in the late-nineteenth century to the draconian reaction in Bleistein itself. Part III returns to the issue of how we should define aesthetic progress and what role, if any, the concept should play in intellectual property law going forward. Barton Beebe is a Professor of Law at New York University School of Law, where he specializes in the doctrinal, empirical, and cultural analysis of intellectual property law. He has been the Anne Urowsky Visiting Professor of Law at Yale Law School and a Visiting Professor of Law at Stanford Law School. Professor Beebe has also taught courses at the Centre d'Études Internationales de la Propriété Intellectuelle at the Université de Strasbourg, the Munich Intellectual Property Law Center, and the State Intellectual Property Office of the People’s Republic of China. He received his J.D. from Yale Law School, his Ph.D. in English Literature from Princeton University, and his B.A. from the University of Chicago. Commercializing Public Sector Information

Miriam Bitton Faculty of Law, Bar-Ilan University [email protected] | Bio | SSRN

This Article seeks to explore the question under what terms public sector information should be commercialized. Public sector information is a major informational product produced by governments around the world. Public information is generated by every branch of the government in significant amounts. Countries' freedom of information acts provide that such information should be provided to the public upon request. Freedom of information statutes guarantee important values in democratic societies. However, once obtained such information can be used by individuals and corporations for every purpose, including commercial purposes. In that process information is repackaged and offered to the public at a price, at times even a monopoly price when information is provided by sole source providers.

This Article wishes to address this question, exploring freedom of information acts in the U.S. and the EU, where a public sector information directive has been recently adopted and implemented. The Article is arguing that a right to commercialize should be distinguished from the right to know under the freedom of information acts and that the freedom to commercialize can and should be subject to restrictions. It also considers existing licensing regimes of public sector information and argues that public sector information should be licensed by governments under certain terms where licensed for commercial purposes, taking into account the public interest in creating these informational works in the first place. Introduction of such restrains are justified and equitable given the public investment in creating these important informational goods. Possible challenges to this licensing model are also introduced and addressed. Killing Two Birds with One Party: Using Neutral Third Parties to Represent the Public Interest and to Dampen Overzealous Advocacy in District Court Patent Litigation

Jeremy W. Bock Research Fellow, Berkeley Center for Law & Technology, U.C. Berkeley School of Law [email protected] | Bio | SSRN

Patent cases at the district court level are one of the most contentious forms of litigation. Scorched-earth litigation tactics, which include protracted discovery battles and overly aggressive motion practice, are common. Overzealous advocacy is not only costly to the parties but also burdens the courts and undermines the public interest in the efficient adjudication and just resolution of patent disputes.

This Article proposes a structural change to the manner of conducting patent litigation at the district court level that may potentially decrease the level of overzealous advocacy by the parties as well as enhance the court’s ability to take into account public interest considerations when adjudicating patent disputes. Specifically, this Article proposes the inclusion of a neutral third party in district court patent litigation to represent the public interest, whereby the neutral third party participates in all aspects of the litigation, including discovery, motion practice, trial, and settlement. Drawing on principles of game theory, this proposal is modeled after the current practice at the U.S. International Trade Commission (ITC), where a patent dispute brought before that agency includes a dedicated ITC staff attorney who represents the public interest as a full party to the litigation, and whose presence acts as a moderating influence, especially in discovery disputes.

The procedural mechanisms through which a district court may be able to accommodate a neutral third party litigant include intervention and the “litigating amicus” device. This Article also evaluates the suitability of the Federal Trade Commission (FTC) as a neutral third party litigant in light of its statutory mandate under Section 5 of the FTC Act, which empowers it to investigate “unfair methods of competition,” and its expertise in evaluating intellectual property issues in view of competition policy. Virtual Property and Copyright: Taking the First Sale Doctrine into the Virtual Realm

M. Scott Boone Associate Professor of Law, Atlanta's John Marshall Law School [email protected]

Traditionally, a balance existed between the personal property rights in copies of a work of authorship and the copyright rights in that work of authorship. This balance provided rights to both the users and producers of physical copies of works of authorship. The first sale doctrine embodies this balancing. However, with the transition from physical copies of works to computer-mediated copies of works, the personal property portion of this balance seems to have dropped out of the equation and out of the discussion. Often, discussions about copyright issues in these computer-mediated areas seem to assume that all that remains is the work of authorship and the copyright rights. No “thing” remains in which personal property rights could subsist. The explanation for this assumption appears to lie in the seeming nonrivalrousness of computer-mediated copies, an impression created by the current ease of copying and distributing copies in computer-mediated formats. This same set of characteristics has and continues to motivate the development of digital rights management technology. While good arguments can be made in favor of DRM that restricts unauthorized copying and distribution of computer-mediated copies, an examination of many of the criticisms of DRM stem from technological restrictions on uses previously guaranteed by personal property rights. This raises the question of whether some form of the first sale doctrine should be applied to computer-mediated copies of copyrighted works. One approach to this question would be to apply the theory of virtual property derived from experience with objects in virtual worlds as a way of adding the personal property rights side of the equation back into discussion. An examination of property rights and copyright rights in virtual world objects provides several insights about a possible first sale doctrine for computer-mediated copies. First, no inherent conflict exists between virtual property rights and copyright rights, at least no greater conflict than exists between the personal property rights in physical copies and the copyright rights in the underlying work of authorship. Second, an examination of virtual world objects demonstrates that computer-mediated formats are not inherently nonrivalrous. Finally, this examination that the establishment of a functioning first sale doctrine in computer-mediated copies would likely require the creation of a legal right rather than simply the limitation of rights arising out of copyright.

Search Costs in Trademark Law: What Are We Searching For And Have We Found It Yet?

Laura R. Bradford Abstract

It has now become a commonplace to say that trademarks exist to lower “the costs of search” for consumers seeking desirable goods, but there is widespread confusion about what the term “search costs” means. The term originated in the economics literature of the 1950s and 60s to refer to the costs of gathering information about potential partners to an economic transaction. More recent court decisions, briefs and commentary seem to assume that any activity that distracts consumers from looking for brands they already know and or that causes consumers to expend mental energy increases the “costs of search” and therefore is vulnerable to prohibition under trademark law. This has put modern trademark law on a collision course with free speech and competition interests. Accordingly, critics increasingly decry the search costs principle as inherently flawed and lacking in limitation. This paper argues that the problem is not with the utilitarian approach of lowering consumer information costs, but with a lack of consensus about what “search costs” are and what they should be in a modern marketplace. I analyze the economic and historical roots of the term, and explore how its original definition maps onto contemporary models of product “search.” The economic literature that coined the term aimed at a particular problem: lowering information asymmetry between buyers and sellers. Tailoring the search costs concept to its roots can provide a much-needed limiting principle for trademark doctrine. In this way, a “search costs” approach can complement existing First Amendment, natural rights, and categorical exclusion approaches, and in some cases can provide a more optimal balancing of rights.

The paper will identify two sources of definitional confusion in current conceptions of search costs. The first represents a disconnect between the economic and colloquial notions of search. Although the foundational economic work on search primarily examined strategies through which consumers could lower the costs of gathering information about choices without the need for prior sampling, trademark law grounded in natural rights theories of “goodwill” has focused on safeguarding the interests of consumers searching for goods about which they are already familiar. The case law thus often emphasizes the convenience of repeat purchasers at the expense of consumers broadly seeking information about unknown qualities of a new good. In part this represents an effort by trademark owners to use doctrines such as initial interest confusion, dilution and sponsorship confusion to address problems of information overload rather than information scarcity. Although information overload imposes real costs, the use of trademark law to police diversion of attention stretches the concept of “search costs” to incoherency. Furthermore this definitional expansion corrupts the agency model on which enforcement of the law depends because producer and consumer interests in information filtering substantially diverge.

The second problem source of confusion exacerbates the first. The original economic concept of “search” and its attendant costs arose in a much less dynamic and more fixed product marketplace. It therefore deemphasized an increasingly important element of consumer search: that of identifying the relevant universe of product options as opposed to merely assessing the relevant fitness of a closed set of known choices. A modern conception of search costs must consider both aims equally. However, they will sometimes conflict. The use of familiar marks to describe the characteristics of a new, unrelated product or service can lower the identification costs of search for the new product even while increasing the costs of evaluating the goods sold under the old mark. A coherent concept of “search costs” must embody a way to reconcile these competing aims. The underlying purpose in the economic literature of resolving information asymmetry can provide a mechanism to resolve such conflicts where they arise. Addressing these uncertainties limits the range of conduct which trademark law should address and provides much needed clarity to trademark doctrine.

Robert Brauneis Professor of Law, Co-Director of the Intellectual Property Law Program The George Washington University Law School [email protected]

The musical work, as a category of work or authorship, was created in an era when written notation, in the form of musical scores, was the only technology available to fix musical expression; copyright law protected those scores, but did not protect unfixed performances. As sound recording technologies developed, musical practices changed, but federal copyright law continued to protect only musical works embodied in scores. Then, in the 1970s, Congress did three things which, taken together, create what this article calls the “dilemma of defining musical works.” First, it recognized a new category of work of authorship, the sound recording. Second, it granted sound recordings more limited copyright protection than musical works, including reproduction and derivative works rights only against “dubbing,” direct electronic or mechanical copying, and no public performance right. Third, it provided that musical works need no longer be fixed in scores, but will be granted protection even if fixed only in sound recordings. Thus, because of the difference in scope of protection of musical work and sound recording, one must determine which elements of a sound recording form the musical work, and which don’t; but in many cases there is no longer a score to guide that determination. This Article argues that the principal approaches to making such a determination, which it calls “essentialist,” “traditionalist,” “proceduralist,” and “holist,” are all flawed, and that the only thoroughgoing solution to the dilemma is recognition of a new category of creative work, the audio work.

Graduated Response American Style: ‘Six Strikes’ Measured Against Five Norms

Annemarie Bridy Associate Professor, University of Idaho College of Law [email protected] | Bio | SSRN

From the early days of the commercial Internet, corporate copyright owners have been trying to get Internet service providers (ISPs) to play a more active role in the seemingly Sisyphean task of online copyright enforcement. Indeed, Congress recognized in 1998, when it passed the Digital Millennium Copyright Act (DMCA), that active cooperation between the two sets of stakeholders would be necessary to ensure effective enforcement of copyrights in the digital environment. The DMCA, accordingly, sought to balance the burdens and interests of copyright owners and ISPs by establishing a fairly clear division of labor: copyright owners are charged with monitoring networks and services for infringing content, and ISPs are charged with promptly removing that content when they become aware of it and are situated to remove or disable access to it. While the DMCA’s statutory division of labor has worked relatively well over the years to manage large scale infringement on services that store content for users, it has not worked well to manage infringement over peer-to-peer (P2P) file sharing networks. This is due in large part to a basic mismatch between the decentralized network architecture of P2P systems and the DMCA’s assumption of a more centralized architecture in which ISPs host content uploaded by users.

In 2007, in recognition of the DMCA’s inadequacy in the face of P2P file sharing, and with the high-profile case of Arista Records v. Lime Group pending in federal district court in New York, then New York Attorney General Andrew Cuomo began pressuring broadband providers to agree voluntarily to play a greater role in fighting online piracy. Subsequently, at the federal and international levels, the Obama administration backed the idea of privately negotiated anti-piracy collaborations between broadband providers and corporate rights owners.

In July of 2011, broadband providers finally bowed to the mounting political pressure and to changing economic realities in the business of corporate content ownership and delivery. The five largest telecommunications companies in the United States entered into a memorandum of understanding (MOU) with trade groups representing major corporate copyright owners. The MOU creates “a common framework of ‘best practices’ to effectively alert subscribers, protect copyrighted content and promote access to legal online content.” At the core of the common framework is the Copyright Alert Program (CAP), a domestic graduated response system that differs in significant respects from the controversial “three strikes” model currently operating in several countries abroad, most notably in France.

This Article is an assessment of the CAP with respect to five norms that are central to consumer protection in the enterprise of online copyright enforcement: freedom of expression, privacy, fairness, proportionality, and transparency. Part I provides an

introduction to graduated response, which is the genus of online copyright enforcement to which the CAP belongs. Part II takes a comparative look at two pre-existing graduated response systems: France’s HADOPI system, a government-run program affecting all broadband subscribers in France, and a privately administered system operating in Ireland and run by the broadband provider Eircom. Part III provides a detailed explanation of the CAP including its governance structure, the division of labor it prescribes between copyright owners and broadband providers, and the graduated system of “copyright alerts” and “mitigation measures” it employs. Part III also considers the ways in which the CAP resembles and differs from the French and Irish examples. Finally, Part IV is an evaluation of the CAP’s strengths and weaknesses with respect to each of the five norms listed above.

Valuing Attribution and Publication in Intellectual Property: An Experiment

Christopher Buccafusco Assistant Professor of Law, Chicago-Kent College of Law [email protected] | Bio

There has been much recent discussion of the importance of attribution – the opportunity to receive credit for one’s work – in intellectual property scholarship. The U.S., in effect, stands alone in not granting strong attribution rights to creators of IP. In order to determine whether the U.S. should develop an attribution right and, if so, what form it should take, it is essential to understand the ways in which creators actually value attribution. Although some previous scholarship has provided strong qualitative evidence for the notion that creators value attribution, it has made no effort to quantify that value. The experiments reported in this paper attempt to do just that.

The results reported here suggest that creators are willing to significantly reduce the amount of money they demand to license their IP rights in exchange for the opportunity to receive attribution for their work. This suggests that creators attach significant monetary value to attribution. These findings shed important light on emerging debates over whether and how American IP law should adopt attribution rights. Perhaps counterintuitively, for reasons explained in the paper, adding a default right to attribution to American IP law would more likely worsen, rather than improve, inefficiencies in IP licensing markets. For this reason, the U.S. should hesitate to adopt an attribution right. Valuing Attribution and Publication in Intellectual Property: An Experiment

Christopher Buccafusco Assistant Professor of Law, Chicago-Kent College of Law [email protected] | Bio

Dan L. Burk Chancellor's Professor of Law, University of California Irvine School of Law [email protected]

Transaction costs analysis has become an increasingly important tool in understanding the role intellectual property plays in the marketplace. Numerous commentators have begun to explore how intellectual property rights may alter the transaction costs faced by firms, prompting either increased vertical integration or increased outsourcing of production functions. Such previous analyses of the effects of intellectual property on firm structure have focused almost entirely on the transaction costs faced by intellectual property holders. But it is clear that the presence of intellectual property in the marketplace also changes the transaction costs faced by rivals and competitors of intellectual property holders. In particular, where competitors may be at risk of infringing the exclusive rights held by intellectual property owners, avoiding potential liability may impose significant transactions costs, some of which may be ameliorated by either vertical integration or by increased outsourcing. I discuss here three examples drawn from patent and trademark law where such costs may prompt potential infringers to alter the structure of their business organization, suggesting a new dimension in discussion of intellectual property and the firm. Dan L. Burk is Chancellor’s Professor of Law at the University of California, Irvine, where he is a founding member of the law faculty. An internationally prominent authority on issues related to high technology, he lectures, teaches, and writes in the areas of patent, copyright, electronic commerce, and biotechnology law. He is the author of numerous papers on the legal and societal impact of new technologies, including articles on scientific misconduct, on the regulation of biotechnology, and on the intellectual property implications of global computer networks. Governing Innovation Prizes

Michael J. Burstein Assistant Professor, Benjamin N. Cardozo School of Law [email protected] | Bio

Fiona E. Murray Associate Professor & Sarofim Family Career Development Professor MIT Sloan School of Management [email protected]

Innovation prizes have been the focus of significant scholarly and political attention in recent years. The idea behind these prizes is simple: A public or private entity offers a monetary reward for the development of a new technology. Innovation prizes have a long historical pedigree. Most famously, the British Crown awarded £20,000 for the development of an accurate method to calculate longitude at sea. More recent iterations include the well publicized X Prize competitions – prizes of $10 million for achieving sustainable private commercial spaceflight and $10 million for development low-emission cars, among others. In 2010, the America COMPETES Reauthorization Act granted federal agencies broad authority to conduct prize competitions, making prizes an important tool of federal innovation policy.

The academic literature on prizes to date has been concerned primarily with two problems: whether and under what conditions prizes might be more socially optimal than patents or procurement for providing incentives to innovate, and how prize mechanisms may be optimized so that the amount of the prize award is set properly. This focus on economic optimality ignores problems of implementation. It all but assumes that once a welfare-maximizing prize amount has been chosen, the prize- giving entity can credibly commit to awarding the prize. A close examination of prize competitions in practice, however, reveals that such an assumption is unwarranted.

This paper explores in detail the governance challenges that innovation prize competitions face. We draw upon historical and contemporary examples of prize competitions – primarily qualitative data from the Progressive Insurance Automotive X Prize – to articulate and describe three broad categories of governance issues that prize systems encounter. The first is establishing a governance framework – the rules of the competition and criteria for judging – through a process that is credible to participants. Prize sponsors must then implement that framework in a way that balances clarity with flexibility in light of the significant uncertainty that accompanies the development of new technology. Finally, there must be mechanisms in place for managing conflicts that may arise among participants or between participants and the prize sponsors.

Prizes represent a particularly stark example of the need to develop institutional structures that facilitate contracting for innovation in the face of significant technological uncertainty. We therefore draw lessons for the implementation of innovation governance structures more broadly and we apply our framework to the somewhat different challenges posed by public sector prize competitions. We conclude with several recommendations for how federal agencies implementing their COMPETES Act authority can overcome the challenges of managing prize competitions within the strictures of public law.

In Defense of Design Patents

Sarah Burstein Associate Professor, University of Oklahoma College of Law [email protected]

Most commentators believe that the United States design patent system is fundamentally and irreparably flawed. Specifically, they argue that obtaining a design patents is too difficult, too time-consuming, and too expensive. These arguments are difficult to separate from—and, indeed, are often raised with—the argument that designs should be protected by copyright (or a copyright-like sui generis) law. The main criticisms of patent protection for designs can be grouped into three broad categories: (1) design is Art and is, therefore, entitled to copyright protection; (2) what designers really need is protection against copying, not a patent-like “monopoly”; and (3) patent requirements are not “appropriate” for designs.

This Article challenges each of these criticisms, arguing that they are unconvincing and tend to obfuscate—rather than answer—the difficult policy questions raised by any design protection scheme. It is beyond dispute that design patent doctrine is, at present, flawed and in need of more thoughtful development. However, these problems are neither irreparable nor an inevitable result of using a patent paradigm to protect designs. Indeed, if properly conceptualized and developed, the design patent system could be more effective than copyright (or a copyright-like sui generis regime) in promoting creativity in design without unduly hindering competition.

Sarah Burstein is an associate professor at the University of Oklahoma College of Law. Prior to joining the faculty at the University of Oklahoma, Sarah was a law clerk for the Honorable Robert W. Pratt in the Southern District of Iowa and an intellectual property litigation associate at Kirkland & Ellis LLP. How Law Made Silicon Valley

Anupam Chander Director, California International Law Center, & Professor of Law University of California, Davis [email protected]

Explanations for the success of Silicon Valley focus on access to capital and education. If law is invoked, it is to focus on interstate differences in the enforcement of covenants not to compete. In this article, I put forward a new explanation, one that explains the rise of Silicon Valley as a global trader. Just as nineteenth century American judges altered the common law in order to subsidize industrial development, judges and legislators altered the law at the turn of the Millennium to promote the development of Internet enterprises. These legal changes made possible the rise of Web 2.0, in which companies offer online platforms for user generated content. Europe and Asia, by contrast, maintained stricter intermediary liability, less flexible intellectual property rules, and stronger privacy constraints, impeding local Internet entrepreneurs. I show how American companies leveraged their liberal home base to become global leaders in cyberspace.

Anupam Chander is Professor of Law and Director of the California International Law Center at the University of California, Davis. A graduate of Harvard College and Yale Law School, he clerked for Chief Judge Jon O. Newman of the Second Circuit Court of Appeals and Judge William A. Norris of the Ninth Circuit Court of Appeals. He practiced law in New York and Hong Kong with Cleary, Gottlieb, Steen & Hamilton. He has been a visiting professor at Yale Law School, the University of Chicago Law School, Stanford Law School, and Cornell Law School. His articles have appeared in the Yale Law Journal, the California Law Review, the NYU Law Review, and the University of Chicago Law Review. He is currently working on a book on global e-commerce titled The Electronic Silk Road to be published next year by Yale University Press. Plug-Ins and Tie-Ins Bernard Chao Assistant Professor, University of Denver Sturm College of Law [email protected] | Bio

In exchange for conceiving of an invention and explaining how to practice it, patent law provides inventors a limited monopoly. In this way, patents are supposed to encourage innovation and benefit society. Yet, under current law the Patent Office issues patents for many inventions that do not improve upon existing technology, but instead simply “tie” different products together. By patenting interfaces, companies can effectively create tying arrangements. Even if the interface fails to improve on prior technology, it can be patented so long as it is new and non-obvious.

Thus, patent law allows companies to monopolize secondary product markets even when the company’s’ secondary products contain nothing new or innovative. For example, by patenting the connection between a razor handle and replacement cartridge, a company that sells razor handles can prevent competitors from making compatible cartridges. This has unmistakable implications for high tech. Technology companies frequently create new interfaces and patent them even when previous interfaces would have worked perfectly well. In this way, companies can create a “closed” platform and control the market for hardware and software that operate with their original product.

This work in progress seeks to explore whether there is any way to separate interface patents whose only purpose is to tie products from those patents that actually improve on technology. It may be that this can only be done in the simplest cases. But assuming that patents can be categorized in this fashion, this work also hopes to determine whether we can rid the system of these patents by relying on § 101’s utility requirement, patent misuse doctrine or even the antitrust laws.

The Information Value of Patent Claims

Tun-Jen Chiang Assistant Professor of Law, George Mason University School of Law [email protected] | Bio

The standard rationale for patent claims is that they describe the invention and provide notice of patent infringement to competitors. This notice theory, however, is simply untrue—because patent litigation is highly unpredictable, claims do not provide notice of infringement. Accordingly, a large literature argues that claims are valueless, and that courts should instead determine patent scope using other sources such as the patent specification, and then either abolish claims outright or creatively construe claim text to conform to the externally-determined results.

This Article defends patent claims by providing a new theory. Claims do not provide notice to competitors, but they provide information to courts. An analogy to contracts of adhesion illustrates the intuition. Like patent claims, contracts of adhesion can be portrayed as self-serving statements drafted by corporations that detract from the real bargain, and many have argued that courts should determine the real bargain by looking to extrinsic evidence instead. But for a court to reassemble a bargain (e.g. the price, the timeline for performance, etc.) using only parol evidence will require much judicial effort and high adjudication costs. For courts, even a biased written contract is better than no written contract at all. In the same manner, claims have an information value: the real invention is not costless for courts to discern, and claims reduce adjudication costs even if they are also self-serving.

Recognizing the information theory makes two contributions to the literature. First, it provides a better explanation for the value of patent claims than the discredited notice theory. Second, it follows that, in order to incentivize patentees to draft claims and convey information, courts must generally (though not always) enforce claims as written and cannot engage in too much creative construction.

1 The Past, Present, and Future of the Software Patent Problem

Colleen Chien Assistant Professor, Santa Clara University School of Law [email protected]

While many believe the patent system has hit a historic and unprecedented low, discontent with patents, and in particular with software patents, is nothing new. In 1994, every startup company that testified about software patents at a PTO hearing testified against them. In 1966, a Presidential Commission recommended prohibiting software patents because of the PTO’s inability to vet them. Fears that trivial patents are choking innovation date back to at least 1883, when the Supreme Court railed against “speculative schemers who make it their business to watch the advancing wave of improvement and gather its foam in the form of patented monopolies, which enable them to lay a heavy tax." In short, the problems that now confront the patent system are well-known. What is less well-known, however, is that many of the very reforms being considered - fee-shifting, an independent invention defense, abolishing certain types of patents - have been called for and in many cases tried before, under similar and different conditions. During this historic moment, what can the past teach the present and the future about how to solve the software patent crisis? Based on my research regarding what has been tried, what has worked, and what has not worked, quite a lot.

Reinventing Patentable Subject Matter or the Forgotten Treatise of Magritte on Patent Law

Kevin Emerson Collins Professor of Law, Washington University School of Law [email protected] | SSRN

The rhetoric of the Supreme Court’s recent opinion in Prometheus Laboratories suggests the law articulated therein limits patentable subject matter whenever the claimed invention arises from, or is somehow dependent on, a newly discovered law of nature. In this paper, I will offer a different interpretation that helps not only to understand Prometheus Laboratories but also to reinvent the conceptual foundations of the doctrine of patentable subject matter in a way that puts the doctrine on a more stable footing. Prometheus Laboratories should apply with force and strictly limit the patent protection that is available for claims that, like the claims actually at issue in Prometheus Laboratories, describe and derive value from mental representations of laws of nature. However, it should not govern—or, less forcefully, it should not have expansive influence—when claims employ a law of nature as a causal agent and do not describe a product or process that employs a mental representation. As a practical matter, this thesis accepts that Prometheus Laboratories was correctly decided on its own facts but argues that the case should be construed in a relatively narrow fashion when it is cited to curtail the patentability of inventions in the life sciences.

In this paper, I will make three arguments in three Parts. In Part I, I will lay out the dichotomy upon which my thesis rests: there is a clear distinction between claims that put mental representations of laws of nature to use and claims that build upon laws of nature as causal agents. (As Rene Magritte put it, “Ceçi n’est pas une pipe.”) In Part II, I will offer three arguments to support the thesis. First, the thesis is a legitimate interpretation of the Prometheus Laboratories opinion itself. Second, it is normatively defensible inter alia on the grounds of the dynamic costs rationale on which the Prometheus Laboratories opinion focuses. Third, it has a solid grounding in a structural interpretation of the Patent Act, albeit for reasons not expressed in the Prometheus Laboratories opinion. In Part III, I turn to the implications of the thesis for several types of claims that differ from, but are closely related to, the Prometheus Laboratories claims: medical diagnostic claims that include post-inference therapeutic action, software claims premised on newly discovered laws of nature (e.g., expert systems based on new “content”), and claims that employ mental representations of newly discovered phenomenon that are neither “laws” nor “natural” (whatever those terms actually mean).

FIXING FRAND: RATIONALIZING “FAIR, REASONABLE AND NON- DISCRIMINATORY” LICENSING OF STANDARDS-ESSENTIAL PATENTS

Jorge L. Contreras Associate Professor, American University – Washington College of Law [email protected]

Technical interoperability standards enable products offered by different vendors to work together using common sets of parameters and protocols. Most such standards today are developed by groups of industry participants in collaborative settings organized by standards development organizations (SDOs). It has been well- documented that once standards are widely adopted, markets can become “locked-in” and switching to different technologies can be prohibitively costly. Because patent holders have the potential to block others from deploying technology covered by their patents, SDOs often require their participants to commit to license their patents that are essential to the implementation of the SDO’s standards on “fair, reasonable and non- discriminatory” (FRAND) terms.

Not surprisingly, there is significant disagreement among market participants, regulators and commentators over the meaning of FRAND. These disagreements arises both in reference to the level of royalties that should be considered “reasonable”, and whether remedies such as injunctive relief are appropriate when FRAND commitments have been made. Such disagreements have led to significant litigation in the wireless telecommunications market and threaten to disrupt other markets as well. In this paper, I survey the existing economics and legal literature regarding FRAND licensing commitments and assess the wide range of proposals that have been made to alleviate the uncertainty that surrounds FRAND licensing. Such proposals have included the formation of patent pools, greater oversight by antitrust enforcement agencies, judicial or legislative limitation of injunctive relief, “ex ante” disclosure of licensing terms, auction processes for royalty rates, negotiated royalty caps and binding arbitration of licensing terms. I assess these proposals in terms of efficiency/welfare, administrability and political economy, then offer a novel solution that seeks to optimize these variables and provide a sound basis for collaborative standardization activity in the future. What Drives IP without IP? A Study of the Online Adult Entertainment Industry

Kate Darling IP Research Specialist - Massachusetts Institute of Technology (MIT) Media Lab [email protected]

This work-in-progress is an empirical study of content production incentives in the online adult entertainment industry. Existing copyright policy is based largely on the utilitarian theory of incentivizing creative works. A trend of recent industry-specific studies assesses the relationship between intellectual property (IP) and creation incentives in individual markets in practice. This bottom-up approach could eventually prove useful in helping to optimize IP and innovation policy. Generally, these studies focus on creation incentives in fields where formal IP-protection is not available to, or rejected by, creators.1 This project aims to make a significant contribution to the literature by analyzing a large entertainment content industry where IP protection has become nearly unenforceable in the digital age. Because content producers have been unable to recoup their investment costs through formal IP rights, they are effectively operating in IP’s negative space.2

My qualitative interviews with industry specialists and representative content producers support the hypothesis that IP enforcement is prohibitively difficult. As a result, many producers have developed alternative strategies to recoup their investment costs. Similar to the findings of other scholarly work on IP’s negative space, I find a shift toward the production of experience goods. This insight applies across most entertainment industries. I also find that industry-specific attributes, such as consumer privacy preferences, consumption habits, and optimally low production costs, may play a role in sustaining content production. While these attributes do not necessarily translate to other industries, determining such factors and their limits brings us toward a better understanding of innovation mechanisms.

1 Such as in medical research, open-source software, fashion, culinary art, stage performance, etc.

2 A term coined by Sprigman and Raustiala, see Raustiala, K., Sprigman, C., The Piracy Paradox: Innovation and Intellectual Property in Fashion Design, 92 Va. L. Rev. 1687 (2006) p. 1762-1765. AN INFORMATION NETWORK APPROACH TO TRADEMARKS

Deven R. Desai Associate Professor, Thomas Jefferson School of Law [email protected] | Bio

Trademarks are indeed about information, but trademark doctrine misunderstands trademarks’ information function. Trademark doctrine takes a broadcast view in a networked world. Rather than a world where a single source transmits messages to a passive public, we live in a world where many actors use trademarks to transmit data about a mark. Decisions are made based on data received, but trademark law’s broadcast model has a naïve view of whether the data leads to good or bad decisions. This paper explores what happens if trademarks are taken to be part of an information network. I show that by ignoring the information network nature of trademarks, current trademark doctrine favors herding and cascade problems, ensconces incumbents, and thwarts competition. Furthermore I argue that insights from information network theory explain and enhance our understanding of how to correct these outcomes. In short, information network theory better answers why recent calls favoring broad comparative advertising while cabining the idea of use are correct.

The Patent Applicant’s Duty of Disclosure: A Comparative Analysis

Lisa A. Dolak Angela S. Cooney Professor of Law Associate Director, Institute for the Study of the Judiciary, Politics, and the Media Associate Director, Center on Property, Citizenship, and Social Entrepreneurism Syracuse University College of Law [email protected]

The United States imposes a disclosure duty upon patent applicants that goes well beyond the corresponding obligations imposed by other major patent systems. And the judicially-created penalty for intentional material violations of that duty – the inequitable conduct defense – is also unique.

Critics of U.S. disclosure duty burdens have cited these differences in advocating abolition of the affirmative duty of disclosure. The merits of such critiques are worthy of discussion, particularly in light of recent developments in the direction of greater harmony between the U.S. and other patent systems.

This paper critically evaluates the U.S. patent system’s duty of disclosure from a comparative perspective. Focusing in particular on the U.S. and European systems, it describes the legal, cultural and practical considerations that bear on and inform disclosure duty policy. Exclusivity Without Patents: The New Frontier of FDA Regulation for Genetic Materials

Gregory Dolin Associate Professor & Co-Director of the Center for Medicine and Law University of Baltimore, School of Law [email protected] | Bio

98 Iowa Law Review ___ (Forthcoming 2012)

Over the last twenty years, the legal and scientific academic communities have been embroiled in a debate about patent eligibility of genetic materials. The stakes for both sides couldn’t be higher. On one hand are the potential multi-billion dollar profits on the fruits of research (from newly discovered genes) and on the other is the ability of scientists to continue and expand research into the human genome as well as patients’ access to affordable diagnostic and therapeutic modalities. This debate is currently pending before the Supreme Court which has under consideration petition for certiorari in Ass’n for Molecular Pathology v. USPTO.

This paper recognizes that both sides have legitimate concerns. Given the unique nature of DNA, patents that broadly cover genetic materials and prevent their use (except by the license of the patentee) create insurmountable roadblocks for future research. However, denying exclusive rights to the fruits of laborious and costly research will remove the necessary incentives for investment in these endeavors, thus delaying scientific and medical discoveries.

To remedy these problems, the paper proposes a non-patent exclusivity system administered by the Food & Drug Administration. Under such a system, the innovators who bring new therapeutic or diagnostic products to market will receive exclusive rights to market their products for a limited time. This will provide sufficient market-based incentives to continue with the research and investment in this area. At the same time, because genetic sequences will no longer be broadly protected by patents, the public will be able to access these basic research tools without fear of infringement litigation. This approach addresses concerns of the both sides to the debate, and leads to a cheaper, more predictable, and easier to administer system of exclusive rights.

Explaining Exhaustion: Commercial Law’s Constraints on Contract

John F. Duffy Armistead M. Dobie Professor of Law, University of Virginia School of Law [email protected] | Bio

Richard Hynes Professor of Law & Director, John M. Olin Program in Law and Economics University of Virginia School of Law [email protected] | Bio

Once intellectual property owners have licensed a use, manufacture, sale or other activity covered by their exclusive rights, the doctrines governing exhaustion of intellectual property rights protect parties downstream from the licensed activity against additional assertions of the same exclusive rights. While such exhaustion doctrines are now part of the accepted canon of intellectual property law, the theoretical basis for these doctrines has remained controversial. Exhaustion doctrines are frequently justified as necessary to limit the market power of intellectual property owners or to ensure intellectual property owners do not collect double or excessive royalties from more than one party in the stream of commerce. Such rationales, however, have many recognized shortcomings, including that exhaustion doctrine typically applies without any proof of the parties’ market power and that creative licensing arrangements may be incapable of evading the modern “one monopoly rent” theorem of economics, which generally posits that only a single rent can be extracted from any particular monopoly. An alternative explanation for intellectual property exhaustion can be found in the more fundamental limitations that commercial law doctrines impose on contractual freedom. Parties to a contract do not necessarily have the freedom to restructure property rights in any way they see fit. Such limits on contractual freedom are pervasive throughout commercial law and are especially visible in cases of insolvency, where bankruptcy courts must frequently distinguish between property interests and mere contractual claims. This paper examines the exhaustion case law and determines the degree to which more general commercial law limits on contractual freedom have influenced the historical development of exhaustion law and whether those doctrines provide a more accurate and rigorous explanation for the specific contours of modern exhaustion doctrine.

The Giants Among Us

Tom Ewing JD, MS, MA, Licentiate in Industrial Management & Economics (expected 2012)

Robin Feldman Professor of Law & Director of LAB Project, UC Hastings Law [email protected]

The patent world is undergoing a change of seismic proportions. A small number of entities have been quietly amassing vast treasuries of patents. These are not the typical patent trolls that we have come to expect. Rather, these entities have investors such Apple, Google, Microsoft, Sony, the World Bank, and non-profit institutions. The largest and most secretive of these has accumulated a staggering 30,000-60,000 patents. Investing thousands of hours of research and using publicly available sources, we have pieced together a detailed picture of these giants and their activities. We consider first the potential positive effects, including facilitating appropriate rewards for forgotten inventors, creating a market to connect innovators with those who can manufacture their inventions, and most important, operating as a form of insurance – something akin to an Anti-Troll defense fund. We turn next to the potential harmful economic effects, including operating as a tax on current production and facilitating horizontal collusion as well as single firm anticompetitive gamesmanship that can raise a rival’s costs. Most important, we note that mass aggregation may not be an activity that society wants to encourage, given that the successful aggregator is likely to be the one that frightens the greatest number of companies in the most terrifying way. We argue that mass aggregators have created a new market for monetization of patents. It is vast, rapidly growing, and largely unregulated. We conclude with some normative recommendations, including that proper monitoring and regulation will require a shift in the definition of markets as well as a different view of corporations and their agents.

Does Agency Funding Affect Decisionmaking?: An Empirical Assessment of the PTO’s Granting Patterns

Michael Frakes Assistant Professor, Cornell Law School [email protected] | Bio l SSRN

Melissa Wasserman Assistant Professor, Illinois College of Law [email protected] | Bio l SSRN

This Article undertakes the first empirical study of the influence of the PTO’s funding on the agency’s decision-making. More specifically, this Article studies the influence of the PTO’s budgetary structure on the most important decision made by the agency: whether or not to grant a patent. It begins by setting forth a theoretical model predicting that certain elements of the PTO’s fee schedule, such as issuance and maintenance fees, which are only collected in the event that patents issue, create incentives for the PTO to grant additional patents. Using a rich database of previously-unavailable patent grant rates, we then empirically test the predictions of the theoretical model by comparing the agency’s granting patterns before and after 1991, the period at which the agency became almost exclusively funded by user fees.

Our findings suggest that the agency’s fee structure biases the PTO towards granting patents. Moreover, we find the distortion in PTO decision-making has a differential impact across technology and entity size. For instance, with respect to those types of patents for which the PTO is likely to profit the most from granting patents, we estimate a relatively stronger sensitivity to the PTO’s funding structure. Furthermore, we also find that these distortions are more likely to occur when markers indicative of an underfunded PTO are present. As such, our results are relevant to the ongoing debate regarding the nature of bureaucrats or government employees. Our findings contradict the idea that bureaucrats seek to maximize their budgets while lending support to the notion that when agencies seek enlarged budgets they do so as a result of being mission minded but financially constrained.

From a social welfare perspective, our results are discouraging, as they suggest that the PTO’s financial incentives, and not solely the merits of the invention, may be, in part, driving patentability decisions. While patents attempt to push society towards a socially optimal level of innovation by providing inventors with a mechanism to recoup their research and development expenses, they do so only at a cost—consumers pay higher prices and have less access to the patented invention. A PTO that is applying the patentability standards in a patent-protective manner is likely to be routinely granting patents on inventions that were either already known or represent only a trivial advancement over the existing scientific knowledge. As a result, a grant-biased PTO is likely to systematically issue patents that end up imposing significant costs on society without bestowing the commensurate benefits of innovation.

THE RARE DISEASES CLINICAL RESEARCH NETWORK AS A NESTED CULTURAL COMMONS

Brett M. Frischmann Professor of Law, Cardozo Law School [email protected] | Bio

Katherine Strandburg Professor of Law, New York University School of Law

Concerns about the productivity of the pharmaceutical industry, the accessibility of treatment, and the expense of healthcare have led to numerous experiments with “openness” at various stages of research. One issue of particular concern is the difficulty in applying the current “blockbuster drug” model to rare diseases and conditions. The Rare Diseases Clinical Research Network (“RDCRN”) is an attempt by the United States government to overcome some of these difficulties and to foster a collaborative approach to rare disease clinical research and treatment development, essentially by constructing a commons. The basic idea behind the RDCRN is to construct a network of research consortia, with the dual aims of improving understanding of the disorders, improving diagnostics, and developing better treatments for the particular disorders represented by the funded consortia and developing infrastructure and clinical research methodology that may be used more broadly in studying rare diseases. This project will apply the constructed cultural commons framework (Madison, Frischmann & Strandburg 2010) to study the RDCRN and related patient advocacy groups. In this paper, we begin by focusing on the structure of the RDCRN itself and on one specific consortium that has been part of the RDCRN since the beginning in 2003 – the Urea Cycle Disorders Consortium (UCDC). To date, we have conducted a literature review, using the cultural commons framework to structure our observations, which we present below. We also will present the results of some interviews, which are currently underway.

The State(s) of Copyright Law

Jeanne C. Fromer Associate Professor of Law, Fordham Law School, NYU School of Law (visiting) [email protected] | Bio l SSRN

Most legal scholarship on copyright law assumes that the making and interpretation of copyright law happens in the federal sphere, be it in Congress, federal courts, or the executive branch. This Article shows that there is an ignored actor in the development of copyright law: the states. A review of all available state court decisions (from 1789- 2011) that mention copyright indicates that state courts are construing copyright law and making copyright policy, be it through contract law, tax law, family law, state intellectual- property rights, or even federal copyright law. This condition holds even after Congress’s 1976 copyright revision, which gave states far less say in copyright matters. After showing descriptively how state courts are having a say in copyright matters, I discuss the costs and benefits, as well as the legality, of state intervention in copyright law. Markets and Patent Enforcement: A Comparative Investigation of Non-Practicing Entities in the US and EU

Stefania Fusco Visiting Assistant Professor, DePaul University College of Law Transatlantic Technology Law Forum Research Fellow at Stanford Law School [email protected] | Bio

Is it true that Non-Practicing Entities (NPEs) are primarily a US phenomenon? Over time, several definitions of NPEs have been proposed. They range from: research institutions that hold patent portfolios for their inventions, but which do not develop and commercialize related products (or any other products) to IP asset management firms whose exclusive business is asserting patent claims and in the process collecting significant fees from companies operating in certain industries. This second type of company is also known as “patent troll” and has been at the center of critical debates on their role fostering and inhibiting innovation in different fields.

NPEs are a relatively new phenomenon. Studies have shown, for example, that their activity has only become prominent in the US during the last decade. These studies also seem to indicate that NPEs are not nearly as active in other countries, namely the EU, as they are in the US. The purpose of this investigation is, therefore, to verify whether NPEs are indeed absent in the EU. Preliminary findings seem to indicate that NPEs are actually present in Europe, but play a significantly less important role there than in the US. My research will discuss possible explanations for this finding, including an assessment of the differences between EU and US industries, remedy systems, judicial cultures and the fragmentation of European jurisdictions etc.

This investigation will, specifically, supply a comparative analysis of companies operating in the EU and US markets. To be included in this analysis is a case study I will conduct on one of the most important European NPEs, SISVEL. This part of the investigation will aim, firstly, to describe SISVEL’s business model and differentiate that model from the one adopted by its US counterparts and, secondly, to highlight the challenges that SISVEL faces when operating in Europe. I expect this research to generate valuable information regarding the different characteristics of NPEs and their ability to operate effectively in different markets.

William Gallagher is Associate Professor and Co-Director of the IP Law Center at the Golden Gate University School of Law, where he teaches courses on intellectual property litigation, intellectual property law, torts, and legal ethics. He served as a Visiting Scholar at the Center for the Study of Law and Society at the UC Berkeley School of Law (2009-2011).

Professor Gallagher previously taught as a lecturer in intellectual property law and ethics at the Santa Clara University School of Law. He received his JD from the UCLA School of Law; his Ph.D. from the University of California, Berkeley School of Law (Jurisprudence and Social Policy Program); his MA from the University of Chicago; and his BA from the University of California, Berkeley.

Professor Gallagher is the author of articles on intellectual property law and professional ethics, which have appeared in the Santa Clara Law Review, The Santa Clara Computer & High Tech. Law Journal, The John Marshall Review of Intellectual Property Law, Pepperdine Law Review, Law and Social Inquiry, Jurisprudence and Social Policy Program Faculty Working Papers (University of California, Berkeley School of Law), and the Law and Politics Book Review. His edited book, International Essays in Law and Society: Intellectual Property, was published in 2007 by Ashgate Press.

Before entering full-time academia, Professor Gallagher was a partner in the San Francisco office of Townsend and Townsend and Crew LLP, where he specialized in patent, copyright, trademark, trade secret, and related intellectual property litigation in both state and federal courts nationwide.

Patent Prosecutors, Innovation, and Ethics in Everyday Legal Practice

William T. Gallagher Associate Professor of Law & Co-Director, IP Law Program Golden Gate University School of Law [email protected]

This paper presents findings from an ongoing qualitative study of lawyers who prosecute patents for clients in the U.S.P.T.O. It is part of a larger series of projects that seek to map, understand, and theorize IP lawyers’ roles in the strategic acquisition and enforcement of intellectual property rights. Previously published projects in this research series have focused on the ethical understandings and practices of patent litigators and on trademark and copyright lawyers’ roles in enforcing IP rights in private negotiations in the “shadow” of the law and the formal legal system.

Drawing on literatures in intellectual property, legal ethics, law and society studies, and socio-legal studies of the legal profession, this study examines how patent prosecutors understand their role as intermediaries in the patenting of client innovations. It also focuses on prosecutor attitudes and behaviors towards the U.S.P.T.O., including whether prosecutors believe that patent examiners get it “right” in the patent examination process. This study also examines the ethical issues that arise in everyday patent practice and how patent prosecutors deal with those issues when advising clients.

Catch 22 in the Rye: Copyright Essentialism and the Performativity of Remedies

Andrew Gilden Fellow, Stanford Law School [email protected] | Bio

A long line of scholarship has sought limitations on the availability of copyright injunctions. Invoking the First Amendment as both a substantive and procedural limit on the reach of copyright, numerous scholars have emphasized both that statutory rights must be limited in scope to protect free expression and that the provision of rights is distinct from the provision of any particular remedy.

Although efforts to use the First Amendment to reign in the substantive reach of copyright have been largely unsuccessful, courts in recent years have seized upon a rights/remedy distinction in copyright to erect new barriers to injunctive relief. For example, in Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010), the Second Circuit vacated a preliminary injunction against a critical reinterpretation of The Catcher in the Rye, setting forth a new preliminary injunction standard that expressly requires a court to consider the First Amendment interests of the parties and the public. In the same opinion, however, the court in a single paragraph affirmed the district court’s widely- derided rejection of Fredrik Colting’s fair use defense.

This Article suggests that this “split-the-baby” approach in Salinger was no coincidence, and it argues that the interrelationship between rights and remedies has been largely underappreciated in copyright law and scholarship. Scholars working within a First Amendment framework have largely followed a strict two-step sequence to the rights/remedy determination, whereby (1) the merits determination occurs first-in-time and in isolation from pragmatic concerns and (2) the remedies determination serves the subsidiary role of implementing a given ruling in light of real-world interests. Although law & economics-minded scholars have given much greater attention to the role of remedies in structuring copyright-related transactions, they have been relatively agnostic to the nature and scope of the substantive copyright entitlement.

This Article critically examines the interrelationship between substantive copyright protections and the remedies available for infringement. Drawing from constitutional remedies scholarship and post-structural theories of performativity, it argues that a court’s awareness of its likely remedy award in a particular dispute—combined with its normative view of how future actors should address similar disputes—“reaches back” and shapes the determination of the parties’ respective rights. A performative approach to remedies suggests that the realignment of rights and remedies in Salinger manifests an embedded preference for commodification and efficiency, notwithstanding the court’s repeated invocation of free speech values. By sequestering rights from remedies and embracing First Amendment limitations solely as to remedies, the decision adds a new veneer of fairness to the copyright system at the same time that it further entrenches the industrial, permissions-based norms long-derided by scholars and advocates.

From PI to IP: Yet Another Unexpected Effect of Tort Reform

Ronen Avraham Professor in Law, The University of Texas at Austin [email protected] | Bio

John M. Golden Professor in Law, The University of Texas at Austin [email protected] | Bio

Is there a connection between state-law tort reform and the explosive growth of U.S. intellectual property (IP) litigation? The literature has established that the number of tort claims in states with tort reform has gone down. How do personal injury (PI) plaintiff lawyers deal with the decrease in the demand for their services? Could a significant number of them end up shifting their practice toward IP law? Although David Schwartz’s interviews with contingent-fee litigators have led him to suggest that “[m]ost lawyers whose practice consists of substantially all patent contingent litigation are primarily and historically patent litigators,”1 there is pre-existing anecdotal evidence that some proportion of PI lawyers have switched substantially to IP.

Using data gathered from various sources, including Lex Machina and the Database of State Tort Law Reforms, we find more systematic evidence of a related proposition— namely, that state tort reform significantly and substantially increases copyright and patent filings in U.S. district courts in the states where tort reform has occurred. In contrast, the evidence does not indicate a similarly significant effect on trademark and trade-secret filings. One potential explanation for the apparently different results for copyright and patent as opposed to trade secret and trademark is that, to the extent tort reform has produced an increase in trademark or trade-secret filings, that increase has been concentrated in state courts, rather than federal district courts that have exclusive jurisdiction over patent and copyright cases. Alternatively, it could be that PI attorneys moving into other areas of practice are more likely to gravitate toward patent litigation and copyright litigation, rather than trademark litigation or trade-secret litigation, perhaps because patent litigation and copyright litigation offer more opportunities for lucrative suits brought by non-incumbent industry players (e.g., independent inventors or startup firms) who might be most likely to seek the services of former PI attorneys. Finally, it should be noted that the apparent differential growth of patent and copyright litigation in states that have undergone tort reform might not be explained substantially by a lawyer- based shift from PI to IP at all. Instead, the primary mechanism for such differential growth could be court-based: for example, a post-reform decrease in docket congestion could make a state’s U.S. district courts significantly more attractive for IP filings, either directly by making litigation in those courts speedier or indirectly by freeing time for the courts to adopt rules for IP litigation that parties find attractive. This paper discusses such potential explanations and considers their plausibility in light of the paper’s new empirical evidence as well as other available data.

1 David L. Schwartz, The Rise of Contingent Fee Representation in Patent Litigation, ALA. L. REV. (forthcoming), available at http://ssrn.com/abstract=1990651. Debunking the “Duty to Police” in Trademark Law

Deborah R. Gerhardt Assistant Professor, University of North Carolina School of Law [email protected]

Eric Goldman Associate Professor & Director of the High Tech Law Institute, Santa Clara University School of Law [email protected]

Leah Chan Grinvald Assistant Professor, Saint Louis University School of Law [email protected]

The president of Monster Cable (an extremely frequent trademark enforcer), Noel Lee, has stated, “We have an obligation to protect our trademark; otherwise we’d lose it.” However, the Lanham Act doesn’t contain an express obligation to police trademarks (especially against expressive uses), and the conventional wisdom and related “lore” has caused countless problems.

This Article will examine the perception that brand owners have a duty to police their mark. Next, it will examine the supporting caselaw, focusing on the rare cases where judges have found a forfeiture. We’ll show that the “duty to police” is mostly mythical in court, especially in the infringement contexts, much like turning on the bedroom light reveals that no monster is hiding in the closet. We next question if trademark counsel deliberately overstate the “duty to police” for business development purposes. We conclude by recommending that practitioners reexamine their advice regarding the “duty to police” in trademark law. Eric Goldman is an Associate Professor of Law and Director of the High Tech Law Institute at Santa Clara University School of Law. Before he became a full-time academic in 2002, he practiced Internet law for 8 years in the Silicon Valley. His research and teaching focuses on Internet, IP and advertising law topics, and he has blogged on these topics since 2005 at the Technology & Marketing Law Blog [http://blog.ericgoldman.org].

Setting Patent Fees

Stuart Graham U.S. Patent and Trademark Office [email protected]

Galen Hancock U.S. Patent and Trademark Office

The America Invents Act of 2010 fundamentally changed – for a limited period – the way patent-office fees are set in the United States. In the Act, Congress delegated principle responsibility for the choice over what fees are charged, and decisions over what patent-office activities to encourage or discourage to the USPTO. The Act provides the USPTO with general authority to set its own patent fees for the first time, suddenly creating an opportunity for the Office to use patent fees and the price system as a policy instrument, and to set individual fees without strict regard to activity-based cost recovery. Within the USPTO, this opportunity has created a demand for economic evidence and provided the platform for new conversations concerning the economic implications of patent fees as regards patent applicants, their competitors, consumers, and the operation of the innovation system writ large. This Article describes how this fee-setting process was planned, with particular emphasis on how the USPTO’s recently-created economics division introduced economic thinking into the USPTO while conducting primary data analysis to inform the policy making process. In this article, we build off our experience by describing the history and institutional context of patent-office fee setting in the United States, and explore how prior economic theory and evidence concerning such fees has been useful to the Office in exercising its new authority. We also describe some of the primary empirical analyses we conducted relating to the application process and what types of activities – and applicants – have been subsidized or have subsidized others under the USPTO’s prior fee structures. We use this evidence to explore and comment upon several options available to Agency policymakers in the context of fee setting. Creativity Constrained: Comics and the Law

Marc H. Greenberg Professor of Law and Co-Director, IP Law Center Golden Gate University School of Law [email protected]

This is a book about the intersection of creativity, art and the laws of the United States. While Article I, Section 8 of the U.S. Constitution offers protection and financial incentives to creators of art, other U.S. laws threaten and limit the creative process. These constraints hinder the entrepreneurial efforts of art-related businesses. The valuable role some art forms play in shaping social change is too important to allow this erosion of the Constitutional protections granted to creators of art.

While much has been written about creativity, art and the law, most scholars have approached this subject from a macro perspective, offering broadly focused discussions of art and law in general. This approach allows scholars to explore abstract theory, however it has limited value in assessing the effect of actual constraints on working creators.

This book focuses on one art form - comics, cartoons and graphic novels - as a example of how the constraints of law limit the creative process and entrepreneurial goals of artists, publishers and retailers in this genre. Through this specific focus the reader is offered real world stories of the impact the law has on creativity, and how those constraints can be ameliorated or even eliminated.

The comic art form is one of the most popular and influential forms of contemporary art - with tendrils that extend into a diverse range of cultural activities, including political cartoons in newspapers and books, graphic novels that are often the source material for motion pictures and television programs, and comic books and related merchandise. Throughout their history, and perhaps because of their popularity, comics have been the subject of repeated efforts to limit and censor their subject matter, distribution and sale.

The law has played a key role, in a variety of ways, in the imposition of these constraints. This book examines the history and legal issues involved in the cases, statutes and legislative actions which have imposed legal constraints on the creators, publishers, distributors and even readers of comics. The negative impact of these cases, statutes and laws on the creators of comics is analyzed, and proposals for how to limit this impact in the future are offered.

Since these constraints have been applied in a disparate variety of ways, the full extent of this misuse of the law has not been the subject of any popular or scholarly work, and the attention of the art and legal communities to this problem has been unfocused. It is to shed light on the true nature and extent of this issue, and to offer proposals for stemming this tide, that I decided to write this book. Are Search Results Speech?

James Grimmelmann Associate Professor of Law, New York Law School [email protected] | Bio l Publications

Whether and in what respect search results are speech protected by the First Amendment has dramatic implications for how, if at all, they can be regulated. At one extreme, Google argues that search results are editorial opinions (or, more recently, “scientific opinions”) entitled to near-absolute protection from legal scrutiny, and several courts have agreed. At the other, Oren Bracha and Frank Pasquale argue that the First Amendment “simply does not extend to cover” most of Google’s search results. In between are the allegations by Foundem and other disgruntled websites and competitors, which argue that certain specific ranking decisions are objectively wrong, and thus actionable. Courts’ choice of how to characterize search results will likely determine the fate of the antitrust storm gathering over Google, as well as a host of private lawsuits sounding in defamation, interference with contract, and other business torts.

In prior work, I analyzed the copyrightability of ratings and rankings using a tripartite scheme: as facts, as opinions, and as self-fulfililng prophecies. In this paper, I will train those categories on search results, showing how they capture the divergent theories of search. Foundem and other critics describe search results as statements of fact, and hence protected only to the extent that they are true; Google describes its results as opinions, and hence fully protected; Bracha and Pasquale describe them as a form of conduct akin to the self-fulfilling prophecy and hence entirely unprotected. I plan to go beyond these totalizing characterizations and show that any given search result contains elements from all three categories. The paper will describe in detail which aspects of rankings are immune from judicial and legislative scrutiny, and which are not—and thus explain which of the current and coming anti-Google suits should be barred, and which should not. Sanctioning Intellectual Property Bullies?

Leah Chan Grinvald Assistant Professor, Saint Louis University School of Law [email protected] | Bio

Intellectual property bullying of individuals and small entities has become more of a problem in recent years. This was recognized by Congress in 2010 when it requested the United States Patent & Trademark Office (“PTO”) to examine the issue of trademark bullying. Unfortunately, in the 2011 report published, the PTO makes light of the extent of the problem due to the lack of empirical evidence. Instead, the PTO adopted the view promoted by the large attorney organizations that the current sanctions available under Rule 11 of the Federal Rules of Civil Procedure and attorney fee awards under Section 35 of the Lanham Act appropriately served to punish and deter any would-be bullies. This reliance on current tools to manage intellectual property bullies may not be warranted, however, as it is not based on any empirical evidence of how well such sanctions work in intellectual property litigation. This Article seeks to fill in this gap and will provide an empirical analysis of Rule 11 and Section 35 awards in intellectual property litigation. Primarily, this Article will analyze: (1) how often Rule 11 and Section 35 award requests are made and granted; (2) how often these awards are overturned on appeal; (3) the types of behavior being sanctioned; and (4) whether sanctions awarded do in fact punish and deter. Based on this analysis, this Article will propose that the current mechanisms designed to keep abusive litigants in check does not appear to be working in intellectual property litigation. As a result, victims of bullying need another form of relief and this Article proposes that a “groundless threat of intellectual property litigation” cause of action be adopted by Congress. Measuring and Modeling Trans-Border Patent Rewards

Richard Gruner Professor of Law, John Marshall Law School [email protected]

Technology transfers and controls through multi-country patenting of key technologies are increasingly common. Such practices help innovators to gain the full commercial value of these technologies worldwide and to increase associated innovation rewards. A program of international patenting related to a single invention must be constructed in light of the national scope of patent laws – that is, based on the notion that patents in a particular country like the United States will only control the use of an invention in that country. A commercially significant technology will ideally be patented and controlled in most of the countries where sales and use of products incorporating the technology will have significant commercial value. Families of patents reflect controls aimed at key markets regardless of the sources of the technologies involved. Even the smallest countries can produce commercially significant inventions in quantities by using the patent laws of foreign countries like the United States to produce commercial returns. Indeed, contrary to the assertions of some commentators, the strength of technology research in developing countries may have less to do with the strength or enforcement of patent rights in those countries than it does with the effectiveness with which technology originators in those countries use the patent laws of the United States and other developed countries with major markets.

This paper seeks to develop a model for optimal worldwide patenting and patent rewards for innovators in smaller countries where IP laws domestically may be weakly framed or enforced. It argues that a worldwide perspective focusing primarily on patents in the larger economic markets such as the United States, Japan and the European Union can incentivize and reward innovation worldwide, creating a practical worldwide patent reward system. This may also provide worldwide incentives for the development of certain patentable subject matters, such as innovative software products, that are only protected by some patent systems (as in the United States) but are not rewarded and incentivized under the laws of many countries.

An international system of patent rewards like this will at once depend primarily on the relatively stable laws and legal systems of developed countries with large commercial markets and can be implemented largely by careful planning and procedures for patent application filings by foreign innovators without substantial efforts by their home country officials or legal systems. Such a system, if implemented in connection with research in a particular foreign country, might not only bring additional research rewards to successful innovators in that country, it might also bring foreign investment to those countries that have the best researchers in a given field or that have some other advantage in conducting a particular type of research over other venues for similar research elsewhere in the world.

In addition to describing patent rewards from this worldwide perspective, the paper will propose means for measuring which country’s innovators are most effectively using leading patent systems in this way to provide international rewards for their exported technologies. Measures of outward patent flow from various countries into several key markets will be proposed, with the measures being constructed and normalized to eliminate the effects of country-to-country differences due to differences in economy sizes and scientific community sizes. Differences across technologies will be assessed to identify technology areas where particular smaller countries may already be strong in relying on foreign markets and patent rewards to support domestic technology development.

The Federal Circuit as a Federal Court

Paul R. Gugliuzza Visiting Assistant Professor, University of Florida Levin College of Law [email protected] | SSRN

Like other federal courts, the Federal Circuit decides cases that delimit authority between state and federal courts and among branches of the federal government. But the Federal Circuit is also unique among the federal courts because it has near- exclusive reign over a small number of fields, like patent law. This paper considers how the Federal Circuit’s jurisdictional structure affects the court’s relationships with other government bodies. The paper identifies and deconstructs four of the Federal Circuit’s key external relationships, namely, its relationships with: state courts (what I refer to as the federalism relationship), other branches of the federal government (the separation of powers relationship), the regional circuits (the horizontal judicial relationship), and the federal district courts (the vertical judicial relationship).

Although not without exception, all four relationships are generally characterized by the Federal Circuit’s efforts to enlarge its influence and to curtail the authority of other bodies with which it interacts. For example, in the federalism relationship, the Federal Circuit has embraced an expansive jurisdiction over state-law tort claims, such as legal malpractice claims, that relate to patent prosecution or litigation. In the separation of powers relationship, the Federal Circuit has curtailed the authority of administrative agencies, particularly the Patent and Trademark Office, to make substantive law. In the horizontal judicial relationship, the Federal Circuit has steadily expanded the scope of issues, such as antitrust issues, to which courts must apply Federal Circuit law, rather than the law of the regional circuits. And, in the vertical judicial relationship, the Federal Circuit has refused deference to district courts on matters such as patent claim construction and has aggressively supervised decisions on discretionary procedural matters, such as transfer of venue.

By studying the Federal Circuit through the lens of Federal Courts theory and law, this paper complements emerging patent scholarship on how institutional structure and regulatory design have contributed to and may yet solve the current “patent crisis.” I argue that tempering the growth of Federal Circuit authority might enhance the efficiency of patent litigation and push patent law in a direction that better promotes innovation. Among other benefits, lower courts would have greater leeway to experiment with competing rules and practices and might develop judicial expertise at the trial level, a potentially more appropriate locus of specialization in factually complex patent cases. More broadly, I contend that the Federal Circuit’s sometimes strained relationships with other government bodies teach important lessons about the viability of centralized appellate courts as sites of law reform.

The impact of joining the regional European Patent Convention System

Bronwyn Hall Professor of the Graduate School, University of California at Berkeley Professor of Technology and the Economy at the University of Maastricht [email protected]

Christian Helmers Assistant Professor, Department of Management Universidad Carlos III Madrid and SERC LSE [email protected]

We analyze a natural experiment in patent cost and coverage: the impact of accession to the regional patent system established by the European Patent Convention (EPC) on the 14 countries that acceded between 2000 and 2008. The accession of these countries was largely driven by the enlargement of Europe and can be viewed as exogenous to the patent system itself, and can be expected to have lowered the cost of obtaining coverage in multiple countries. We look at the evolution in patenting behavior by domestic and foreign applicants in these countries, most of which are mid-level developing countries, at the national patent offices, the European Patent Office (EPO) and the World Intellectual Property Organization (WIPO).

Our findings suggest a strong and immediate change in patent filing behavior among foreigners seeking patent protection in the accession states, substituting domestic patents with EPO patents, mostly in chemicals and pharmaceuticals. At the same time, there is no discernible reaction among domestic entities in terms of domestic filings. We also find some indicative evidence at the firm-level that manufacturing companies located in accession states increased their propensity to file patents with the EPO post-accession. We are currently exploring the ownership structure of these companies in more detail, to ascertain whether they are largely branches of multinationals or indigenous firms. The results will add to our understanding of the impact of patenting systems on firms in developing countries.

How Abortion Politics and Technophobia Created the Distinction Between Patently Human and Patentably Non-Human

Yaniv Heled Assistant Professor, Georgia State University College of Law Bio l SSRN

On September 8, 2011 Congress passed the Leahy-Smith America Invents Act (AIA). AIA was “in the making” for about seven years and its enactment is considered as the most significant patent legislation since the Patent Act of 1952. Yet, in a “last minute” addition, Congress included in the AIA bill language similar to that of the Weldon Amendment, which was regularly tacked on to each year’s consolidated appropriations bill since 2004. Outspokenly seeking to achieve the same “pro-life” objectives as the Weldon Amendment, AIA Section 33 decrees that “[n]otwithstanding any other provision of law, no patent may issue on a claim directed to or encompassing a human organism.” But what is a “human organism” and what would “encompass a human organism” for patent law purposes? The AIA does not say; nor does it indicate where one may look for such a definition. And so the question becomes: what was Congress seeking to prohibit by excluding “human organisms” from patentable subject matter? It appears that the drafters of Section 33 sought to undermine what they perceived as incentives existing under patent law to conduct certain kinds of scientific research involving human embryos. However, there is nothing in the language of Section 33 that guarantees this result. Moreover, arguably, existing patent law includes barriers to ethical abuses of the kind that Section 33 in its current form purports to prohibit. Hence, not only is Section 33 unlikely to become the moral floodgates that its drafters purported for it to be, but it will likely instill further ambiguity into the area of patentable subject matter – widely viewed as already one of most chaotic and least predictable areas of patent law. Patent Litigation in the UK: An Overview

Christian Helmers Assistant Professor, Department of Management, Universidad Carlos III Madrid, CSAE Oxford University and SERC LSE (currently visiting Stanford) [email protected]

Luke McDonagh Post-doctoral Fellow, Law Department, London School of Economics (LSE), Houghton Street, London, WC2A 2AE [email protected]

We provide the first detailed analysis of all patent cases heard by all relevant courts in England and Wales during the period 2000-2008. For this purpose, we construct a dataset that contains all law suits filed at the Patents County Court, the Patents Court at the High Court, the Court of Appeal as well as the House of Lords/Supreme Court. In our analysis, we look at characteristics of the litigating parties, patents at dispute, as well as case-specific characteristics and outcomes.

Our data suggest that patent litigation in the UK is a highly internationalised service. We have a substantially higher number of foreign than domestic claimants and defendants. We find that most companies in our dataset are in the metals and machinery industry, followed by trade and R&D services. This is interesting, because our analysis of the litigated patents indicates that most patents protect chemical and pharmaceutical inventions.

We show that only about half of all cases are filed alleging the infringement of a patent. Around 36% of cases seek the revocation of a patent. We find that only half of all cases filed end with a final judgment. More than half of all cases that did not end with a judgment were settled. Cross-tabulating the information on the number of litigating parties and the outcome (final judgment yes/no) suggests that cases with a single claimant and/or defendant are more likely to settle than cases that involve a large number of litigating parties.

Regarding case outcomes, when we examine the cases which ended with a judgment, we find that the by far most likely outcome is the revocation of a patent – regardless of whether the case was filed as an infringement or revocation action. Finally, we show some evidence on appeals. We find that about a third of all cases proceed to the Court of Appeal where in 80% of cases the judgment of the Patents Court is upheld. We also provide a detailed discussion of the five cases that were allowed to proceed to the House of Lords.

While detailed data on the costs involved in litigation is sparse, our data allow us in combination with existing anecdotal evidence to make some tentative statements about the magnitude of the costs involved in litigation. Our data indicates that most cases involve total costs for both claimant(s) and defendant(s) at the order of £1 to 6 million.

We also offer some descriptive evidence on litigation that involves Non-Practicing Entities (NPEs). We find seven companies that have been identified in the literature as NPEs to be involved in 14 cases between 2000 and 2008. Strikingly, in most cases the revocation of NPEs’ patents is sought. Our data indicate that in none of the 14 cases the court held the NPEs’ patents to be infringed, with the exception of one claim of one patent in Nokia v Interdigital, a case involving three other patents which were found to be invalid. In six cases the NPE’s patents were revoked. We find that the litigated NPE patents overwhelmingly protect ICT related technologies. The data on costs for these cases indicate that NPEs were liable to the payment of substantial amounts to the winning parties. This may represent an important restraining factor with regard to the ability of NPEs to sue in the UK – especially relative to the US where costs are non-recoverable.

Fashion at the Edge of IP and Antitrust: The Fashion Originators’ Guild of America

C. Scott Hemphill Chief, Antitrust Bureau, New York State Office of the Attorney General Professor of Law (on leave), Columbia Law School [email protected] | Bio | SSRN

Jeannie Suk Professor of Law, Harvard Law School [email protected] | Bio

Women do not buy hats. They buy fashion. . . . Virtually their sole purpose is to make the wearer happy in the thought that she has a beautiful thing which is in fashion. . . . Men may joke, but it is this curious quality of “fashion” which sells hats, and is, therefore, of great economic value.

Brief for Petitioners, Millinery Creators’ Guild v. FTC (1941)1

The question of intellectual property for original fashion design has attracted enormous public attention in recent years. One reason is fashion’s economic importance, as a global business with annual U.S. sales of more than $200 billion. Another is the awkward discrepancy between the protection accorded to other types of creative activity and the absence of similar protection for fashion design.2 A third is the outlier status of the United States, among countries with fully developed intellectual property regimes, in withholding protection for fashion. These features have given rise to renewed calls for protection, and active consideration of various legislative schemes to achieve that goal.

The question whether to protect fashion design from copying has a storied past. Since 1914 there have been dozens of proposals in Congress to provide protection for fashion design. In the 1930s, as American fashion was coming into its own as a cultural force, designers worried about knockoffs. Then, as now, they lacked intellectual property protection for original fashion designs. In 1930, the Vestal Design Copyright Bill proposed copyright protection for industrial patterns, shapes, and forms, which would have covered fashion designers as well as designers of other useful articles, but the bill was never enacted.

Fashion designers were “demoraliz[ed]” over the rampant practice of design piracy.3 Copies were often sold at a fraction of the price, even in the same stores as the original.

1 Brief for Petitioners at 3, Millinery Creators’ Guild, Inc. v. FTC, 312 U.S. 469 (1941) (No. 251), 1940 WL 46567. 2 See, e.g., C. Scott Hemphill & Jeannie Suk, The Law, Culture, and Economics of Fashion, 61 STAN. L. REV. 1147 (2009) (criticizing this distinction). 3 Note, Self‐Protection of Design Creation in the Millinery Industry, 49 YALE L.J. 1290, 1292 n.20 (1939‐1940). The designers’ collective efforts to stymie design piracy even reached the Supreme Court of the United States, in a pair of 1941 cases involving dresses and hats.4

Although today the near-singular focus of fashion law reform is legislative reform, designers in the 1930s pursued a range of possible solutions in their attempt to stop those who free rode on their designs and undermined their profitability by selling cheaper copies. Then, as now, designers sought legislative protection. But they also pursued a regulatory solution, as part of New Deal responses to the Great Depression. They ultimately settled on an effective but controversial solution, a set of measures targeting both copyists and retailers willing to merchandise knockoffs.

The resulting boycott, devised by the Fashion Originators’ Guild of America (“Guild”), was arguably the “largest scale private intellectual property scheme ever implemented.”5 At its height, a staggering 4,000 new designs were protected each month.6 The designers’ efforts to band together to engage in self-help attracted criticism, and ultimately gave rise to a series of antitrust cases in federal and state courts, culminating in the Supreme Court in 1941.

This essay tells the story of the Depression-era fashion designers, and the solutions they pursued to remedy the lack of intellectual property protection for their work. It describes the Fashion Originators’ Guild’s formation and activities within the social, economic, and legal context of the Depression, and the fatal government scrutiny that eventually led to the Guild’s demise. Finally, it suggests some lessons as to both means and ends drawn from this story about fashion design protection: about self-help as a private solution to a public lack on the one hand, and intellectual property protection for design on the other.

4 Fashion Originators’ Guild of Am., Inc. v. FTC, 312 U.S. 457 (1941); Millinery Creators’ Guild, Inc. v. FTC, 312 U.S. 469 (1941). 5 Jonathan Barnett et al., The Fashion Lottery: Cooperative Innovation in Stochastic Markets, 39 J. LEGAL STUD. 159 (2010). 6 N.Y. TIMES, Feb. 23, 1936, at 17 (4000 new designs registered per month). See also Albert Post, LIFE, Sept. 6, 1937 (200,000 original styles protected over previous five years). Patentable Subject Matter and the Heisenberg Uncertainty Principle

Eileen M. Herlihy Associate Professor, New England Law, Boston [email protected] | Bio

The Heisenberg Uncertainty Principle is a concept in quantum mechanics that relates to the position and momentum of subatomic particles. According to this principle, as proposed by Werner Heisenberg in his famous paper on the subject, "[t]he more precisely the position is determined, the less precisely the momentum is known in this instant, and vice versa."

There are a number of lessons that can be drawn from the Heisenberg Uncertainty Principle that are relevant to problems in the area of patentable subject matter. My work-in-progress considers these lessons in addressing some of the issues that surround the scope of patentable subject matter and the three case law exclusions that have been repeatedly affirmed by the Supreme Court.

Part of my work-in-progress considers the pitfalls associated with using categories based upon type of invention to define the scope of patentable subject matter. Another portion of my work-in-progress considers the drawbacks of some of the approaches that have been suggested for delineating the scope of the case law exclusions to patentable subject matter. In the final portion, I am attempting to flesh out a unified and simplified manner of addressing "laws of nature, physical phenomena and abstract ideas." The Only Logical Conclusion to Harmonization: Copyright Markets Across Borders

Robert Heverly Assistant Professor, Albany Law School [email protected]

Bio | SSRN

The Berne Convention, the WIPO Copyright Treaty, ACTA, TPP; the copyright world is and has been abuzz with the notion of international markets and, in a word, “harmonization” of copyright laws (as well as other intellectual property laws). These efforts are decried in many quarters and pushed as the next logical step in others. Yet, left behind in many of these discussions is a primary aspect of copyright law that has been in place since its early existence: territoriality.

Territoriality is under siege across many fronts today. The Internet makes a college student running a website in the United Kingdom a criminal copyright infringer in the United States, and allows the U.S. to seize domain names and assets of Internet websites throughout the world. In contrast, first sale (also known as exhaustion of rights) remains limited to copies either lawfully made or perhaps, in some circumstances, lawfully imported into the relevant jurisdiction. First sale remains a bastion of territoriality in modern copyright law as other elements of copyright’s geographically-bounded beginnings fall by the wayside.

This project argues that the natural result of the longstanding internationalization of copyright law is the end of territoriality. While this conclusion has significant and important implications that we are already seeing for the enforcement of intellectual property law, it has additional importance for markets in copyright works across borders, especially as affected by territorial limits on sales. This project focuses on these cross- border markets, harmonization and territoriality. The continued push for harmonization to the benefit of rights holders cannot be sustained while retaining vestiges of territoriality that benefit those same rights holders. If territorial limits on enforcement of copyright fall, so must restrictions on the free flow of copyright protected works across international borders. Such a result would have practical effects on certain conundrums in U.S. copyright law while bringing additional coherence to an international copyright structure that is pushing toward harmonization piece by piece, treaty by treaty, with each passing year. Dialogues of Authenticity

Laura A. Heymann Class of 2014 Professor of Law College of William & Mary Marshall-Wythe School of Law [email protected] | Bio

In 1961, Italian artist Piero Manzoni embarked on a project in which he provided various associates, including the art gallery owner Mario Diacono and the artist Marcel Broodthaer, certificates of authenticity. Each certificate — numbered, signed, and watermarked — attested that the holder of the certificate was “to be considered as an authentic work of art for all intents and purposes” as of the date of the certificate. Robert Rauschenberg did much the same thing in his 1961 work “This Is a Portrait of Iris Clert If I Say So,” which consisted of the top of a telegram, sent from Stockholm to Ms. Clert in Paris, with the message, “This is a portrait of Iris Clert if I say so. Robert Rauschenberg.” And Marcel Duchamp did this most famously with his 1917 work “Fountain,” which ultimately, as Thierry de Duve noted, “reduce[d] the artwork to the statement that names it as such.”

The practice of validating and authoring an existing work simply by claiming it as one’s own is commonplace. Artists operating under a studio model, such as Andy Warhol and Dale Chihuly, have frequently been described as reducing their work to statements of authorship, indicated by the signature finally affixed to the work. Celebrities affiliate themselves with designer clothing lines with which they have had little to do but attach their names. By contrast, luxury goods manufacturers decry as inauthentic and counterfeit the handbags produced during off-shift hours using the same materials and craftsmanship as the authorized goods produced hours earlier, and the Native American novel The Education of Little Tree was hailed as a thoughtful and culturally accurate memoir until it was revealed that its author was not the Cherokee writer Forrest Carter but rather the white segregationist Asa Carter. The distinction between authentic and inauthentic often turns on nothing more than a statement of authorship.

Intellectual property law purports to value such statements of authenticity — indeed, they are at the heart of our copyright and trademark systems. These statements tell us what interpretive and evaluative tools we should bring to the task — whether, for example, we are to treat a T-shirt design as ironic commentary or infringement or a photograph as duplicative or transformative. But no statement has value unless it is accepted as valid by its audience, a determination that depends on shared notions of what authenticity means as well as a common understanding of what authenticity designates. The importance of the audience or reader in participating in what is really a dialogue of authenticity lurks within our intellectual property system. This article attempts to bring this feature to the surface. Patent Litigation Dynamics: Key Value Drivers And Efficiency Implications

Michael J. Mazzeo Associate Professor of Management & Strategy, Kellogg School of Management Faculty Associate, Institute for Policy Research Northwestern University [email protected]

Jonathan Hillel Associate, Skadden, Arps, Slate, Meagher & Flom LLP [email protected]

Samantha Zyontz Research Manager, Institute for Strategy and Competitiveness Harvard Business School [email protected]

The system for litigating patents has long been recognized as having significant positive and negative effects on innovative activity in the United States. Consequently, understanding patent litigation dynamics is of paramount importance. We study how infringement awards and other case outcomes affect patent litigation, and we mine a comprehensive dataset we have assembled comprising over 1,300 final patent decisions in U.S. district courts between 1995 and 2008. Our previous work determined that patent infringement awards are highly predictable based on intrinsic features of the cases, litigants and patents at issue. Presently, we expand on that work with two parallel paths of inquiry. First, we dive deeper into our awards data to examine the specific drivers of award value, and we contrast our findings with conventional notions of “valuable patents.” Second, we examine the cases in which damages were not awarded, whether due to findings of non-infringement, invalidity, unenforceability or otherwise, and investigate patent litigation efficiency and expense across the system as a whole. This latter work is particularly timely in light of the skyrocketing costs of patent litigation and calls for systematic changes to improve efficiency.

To facilitate our study, we have compiled a dataset comprising over 1,300 final patent decisions in U.S. district courts between 1995 and 2008. Of the total, 340 cases were patentee-wins and awarded damages for infringement and approximately 900 cases were patentee-losses (on various grounds) and did not award damages. We build on a proprietary dataset from PricewaterhouseCoopers, supplementing it with 120 coded variables about the litigants, lawsuits, patents-at-issue and other factors.

In the first stage of our initial research, we performed distribution analysis and conducted a log-linear regression of award values. We found damages awards to be highly skewed, with the top eight awards accounting for nearly half of the dataset, and highly predictable, with our regression explaining nearly 74% of the variation in award amounts. Our findings were selected as a winner of the 2011 Samsung-Stanford Patent Prize, and we have also presented this data at a number of patent law and economics conferences, including IP Scholars 2011 at DePaul University School of Law. Additionally, we have written about the implications of award predictability on patent reform, including the notable omission of damages reforms in the America Invents Act.

The first set of empirical questions to which we now turn involve selection into our initial set of 340 cases to examine specific correlations of our explanatory variables with infringement awards. This work aims to understand the drivers of award value. Even if a defendant prevails in court, lawsuits by patent holders with little or no economic value may constitute a drag on innovation. And, comprehensive analysis of infringement awards is key towards understanding settlement incentives and license value.

Our second line of study involves building empirical understanding of patent litigation dynamics at the system level. For example, we look at litigation efforts in patentee-win and patentee-loss cases to see if they follow predictable patterns and what factors drive them. This work has important policy implications regarding reducing inefficiency and managing expenses in the patent litigation system.

More specifically, in our present stage of research we plan to address the following:

• What specific factors lead to variances in infringement awards? What are the normative implications of such factors, and to what extent do leading policy proposals align with the empirical data?

• Do patents having characteristics typically associated with greater economic value tend to result in different litigation outcomes, such as more findings of validity and infringement or higher damage awards?

• Do patent litigation efforts follow predictable patterns?

• Can systematic influences of patent litigation dynamics be identified? What resulting policy prescriptions can be made to address recognized problems in the patent system and strains on innovation?

In sum, using our unique dataset, we aim to bring empirical clarity to the patent litigation process and contribute towards a more solid understanding of the private and social value, and attendant costs, of the intellectual property protection offered by patents. Intellectual Property Without Borders

Cynthia M. Ho Clifford E. Vickrey Research Professor Director, Intellectual Property and Technology Program Loyola University of Chicago, School of Law [email protected] | Bio | SSRN

My work in progress examines a questionable trend towards enforcement of intellectual property rights beyond national borders. Although a basic tenet of intellectual property rights is that they are limited in scope to the country that granted them, that tenet is being turned on its head in a number of cases. For example, there are existing or proposed laws that permit or even require countries to enforce intellectual property rights over goods in transit and permit enforcement of rights granted in one country in another jurisdiction. This article aims to explain the genesis for such over-reaching rights and offer some preliminary thoughts about ways to reverse this trend to promote a better balance. Chris Holman is an associate professor of law at the University of Missouri- Kansas City School of Law. He teaches and writes primarily in the areas of intellectual property, biotechnology and antitrust law, with a focus on the interface between patents and biotechnology. He is the author of Holman’s Biotech IP Blog. Prior to becoming a law professor, he served as vice-president of intellectual property and patent counsel at several Silicon Valley biotechnology companies. He was also an associate at a major intellectual property law firm. A native of California, Professor Holman received a Ph.D. in biochemistry and molecular biology from the University of California at Davis, and engaged in postdoctoral drug discovery research at Roche Biosciences in Palo Alto, California. He attended law school at UC Berkeley’s Boalt Hall.

Imagining the Contours of Copyright Protection for Synthetic Biology

Christopher M. Holman Associate Professor of Law, UMKC School of Law [email protected]

For years the idea that synthetically engineered DNA sequences might be eligible for copyright protection has been debated, and in a recent article I argued that under current copyright law engineered DNA should be considered copyrightable subject matter, so long as it satisfies conventional requirements such as originality. Much of my argument was based on the growing convergence of computer programs (which are currently considered copyrightable, but only after years of uncertainty) and engineered DNA, particularly with recent advances in synthetic biology. In this follow-up paper, I consider the question of how best to apply copyright law to engineered DNA and synthetic biology. US copyright law distinguishes between different categories of copyrightable subject matter. For example, there is no general performance right for sound recordings, and there are a number of explicit limitations on the scope of copyright protection for computer programs. This paper address such questions as how the idea-expression dichotomy and merger doctrine should be applied engineered DNA, how fair use would be applied, to what extent non-literal infringement would apply to engineered DNA, and what sort of explicit statutory limitations on DNA copyright protection should be enacted. Patent Law Proxies and Domestic Competitive Advantage

William Hubbard Assistant Professor, The University of Baltimore Law School [email protected] | Bio

Can U.S. patent law help U.S. economic interests compete in a global economy? At first blush, patent law seems well suited for this task. Patent law encourages people to invest resources in developing new ideas, and businesses may outcompete their rivals by incorporating innovative ideas into their products. In a prior article, however, I argued that the information-producing function of patent law usually cannot create competitive advantage because U.S. patent law provides similar incentives for both foreign and domestic inventors to discover new ideas.

Nevertheless, information is only one factor affecting competitive advantage. Other factors include the domestic supply of high-skilled labor, the domestic supply of capital, and the intensity of domestic competition, which often serves as an incubator for preparing domestic companies to compete on a global scale. Importantly, various areas of law can affect these inputs to competitive advantage. For example, education law and immigration law both can affect the labor market for highly skilled workers. Tax law affects the returns from different uses of capital. Antitrust law affects domestic competition. Despite their impact on global competition, these areas of law are sometimes poorly optimized for promoting domestic advantage because they promote other, somewhat conflicting policy goals. For example, immigration law based on traditional justifications might fail to allow an optimal number of engineers to immigrate to the United States.

This Work-in-Progress analyzes the use of U.S. patent law to adjust other areas of law to maximize competitive advantage. Although the primary function of patent law is to encourage inventors to discover new ideas, the awarding of a patent may serve as a proxy to identify factual circumstances in which concerns of competitive advantage predominate over other policy objectives. For example, allowing foreign inventors who obtain U.S. patents to immigrate to the United States might significantly improve the domestic labor pool in ways that increase U.S. competitive advantage. Ultimately, I plan to develop a theoretical framework for determining when U.S. patent law can help to optimize the competitive effects of other areas of law and to identify opportunities for doing so.

Trade’s Horizon and the Evolution of “Trade-Related Aspects of Intellectual Property Rights”

Patricia L. Judd Associate Professor, Washburn University School of Law [email protected] | Bio l SSRN

This Article argues that much of the discomfort surrounding modern global regulation of intellectual property rights (IPR) through the World Trade Organization (WTO) and other trade initiatives stems from the impossibility of ascertaining a static definition of either trade or intellectual property. In fact, the evolutionary nature of both international trade law and intellectual property law renders fruitless any attempt at genuine stability where those fields intersect. Yet, the phrase “trade-related aspects of intellectual property rights” supposedly delineates the WTO’s IPR mandate. While early post-WTO literature pointed out the difficulty of ascertaining which aspects of IPR were “trade-related,” the issue lay virtually dormant for years, resurrecting in the wake of a wave of free trade agreements and other plurilateral initiatives such as the Anti-Counterfeiting Trade Agreement (ACTA) and negotiations toward a Trans-Pacific Partnership (TPP) agreement. This Article posits that changes in the volume of international trade transactions, in the accessibility of the global marketplace, and in technology since 1994 have so deeply impacted both trade and IPR that neither field resembles its pre-WTO self. The vast metamorphoses in both fields have raised the proverbial bar in regulating “trade-related” IPR to an unreachable height, resulting in an overbroad mandate for the WTO. Viewed in this light, one can see that the proliferation of FTAs and plurilateral initiatives is symptomatic of the resulting, predictable shortfall at the WTO. Thus, it is time to rethink, redefine and reallocate international IPR mandates according to criteria that are practically manageable in today’s globalized, Internet-driven world.

Law and Economics of Litigation: New Insights from Patents

Axel Haus Goethe University Frankfurt – Faculty of Economics and Business Administration [email protected] | Bio | SSRN

Steffen Juranek Goethe University Frankfurt – Faculty of Economics and Business Administration [email protected]

In this paper we test general theoretical predictions for litigation and the failure of settlement. Asymmetric stake sizes and asymmetric information are the main theoretical explanations for litigation to occur. These are especially prevalent in patent litigation cases. Using a hand-collected unique data set which contains detailed information on patent litigation cases and matched patent characteristics, we try to address the question whether asymmetries in stake sizes and asymmetric information between case participants impede the solution by settlement. The advantages of our data set allow the usage of an approach that diverges from the literature so far. We find clear evidence for our hypothesis with respect to asymmetric information. Although our results include some ambiguity, we also find evidence for the predictions regarding asymmetries in stake sizes. Intellectual Property Infringement by Artificial Intelligence Applications

Eran Kahana Research Fellow, Stanford Center for Legal Informatics, [email protected]

The growing capabilities and widening use of artificial intelligence applications (AI apps) in mainstream consumer devices (e.g., Siri on the iPhone 4S) are converging to poise interesting intellectual property challenges.1 While currently the most sophisticated of these apps are, at best, in an advanced-alpha or early-beta version, this technology is fueled by innovation moving at an exponential rate. According to futurist Ray Kurzweil, in just eight years from now, AI will demonstrate intelligence levels that are indistinguishable from that of humans.2 And it does not stop there. With that milestone behind it, AI is predicted to outsmart its biological counterparts and, within the lifetime of current tenth graders, a paradigm shift will be witnessed where the majority of intelligence is non-human.

How these hyper-intelligent capabilities translate into a capacity of replicating human- based IP infringement is the subject of this paper. I start by examining this question through a computational capability-continuum, propose a categorization of AI apps based on such capabilities and offer a glimpse into a legal framework designed to deal with the behavior of such apps.

The common denominator for all four levels of AI apps identified here is that they can be programmed with every datum of known IP law. Additionally, each of the more sophisticated app iterations can perform all of the functions of the lesser-sophisticated ones.

I start at the low-end of the intelligence/sophistication continuum, and this is where we find the Level A apps. While these apps vary in their query-response sophistication capacity, they are programmatically constrained to perform that specific operation and are incapable of operational variance.

Level B apps respond to user queries and commands relative to retrieving data from sources external to the host device (such as an iPhone). Examples of these sources can be websites and other apps resident on any mobile devices that have granted the necessary access rights (whether on a device level or app level). The Level B apps also feature infringement-minimizing instruction sets to fit various IP environments in which they are intended to operate.

Level C apps feature autonomous decision-making capabilities. The Level C app can, for example, dynamically evaluate and decide from what source and what data to retrieve and how most effectively to present it.

1 While the emphasis here is on AI apps, similar concerns apply to cybernetic AI. 2 This event is widely known as passing the Turing Test.

Finally, the Level D app manifests intelligence levels so sophisticated that it can identify and reprogram any portion of its behavior (in unpredictable ways); i.e., it has a self- awareness capacity and can create other apps without human involvement. The Level D can also use data it finds in any manner it decides, in ways that indistinguishably replicate (and even exceed) human behavior.

Current law does not support a finding of infringement that is independent of human involvement. If there is infringement, a human-based “smoking gun” is a prerequisite for liability and appropriate remedy. For example, certain web content is copied and misused through use of a spider. Liability is attributed and remedies are sought against the designer, master or both. Simple enough. In contrast, similar activity undertaken by a Level D app is activity and harm for which the law currently has no answer.

A default strict liability standard against the human developer/deployer is misguided for a number of reasons. Perhaps most significantly among these is that it is probable that (e.g., in Level D app cases) that individual could not have reasonably foreseen the infringement. Instead, I propose that an iterative liability (IL) standard be adopted. Under it, infringement inquiry can begin with the original developer/deployer, but where the facts indicate that the AI app behaved sufficiently independently, that individual should not be held liable.

Once we dispose with the human-centric side of the inquiry, we need a legal framework that can handle assigning liability and dispensing remedy vis-à-vis these hyper intelligent AI apps. We could take a pull-the-plug approach and conclude that any AI app that is deemed infringing will be summarily deleted. While that may be feasible in the short-run, there is no assurance this will work in the long-term, especially where Level D apps self-propagate and know how to evade detection. The proposed legal framework I describe in the paper comes in the form of a uniform act that is specifically designed to address activities by such AI apps. The Orphans, the Market, and the Copyright Dogma

Ariel Katz Associate Professor, Innovation Chair Electronic Commerce, Faculty of Law, University of Toronto [email protected] | Bio | SSRN

How do you solve a problem like orphan works? Copyright law requires users to seek permission before they copy works, but how can a user seek permission when the owner is unlocatable? With the rejection of the Google Book Settlement it has become widely accepted that the orphan works problem reflects a serious market failure, but an equally accepted view is that because any solution to the orphan works problem requires deviation from the “permission-first” rule, only Congress is empowered to make such a fundamental change to copyright. This paper challenges this view. I argue that the reason why it has been so difficult to find a solution to the orphan works problem because the permission-first rule is treated as a dogma—a belief held unquestioningly and with undefended certainty, instead of as a rule whose validity depends on how well it promotes the purpose of copyright law and its market orientation. The dogma does not regard the use of works as something that ought to be celebrated, and hence limited by the need to reward creators and ensure creativity. Instead, the dogma considers the use of works as a sin that can be avoided by seeking permission. Unfortunately, many of the proposed solutions are captive of the dogma: they focus exclusively on the user side. Some proposed solutions would impose a requirement of “diligent search” that would give compliant users some limited immunity, while others, such as proposal to create extended collective licensing mechanisms would absolve the user from the sin of copying by paying a fee to a collecting society. These solutions resemble some aspects of Catholic dogma in the middle ages, when the Catholic Church promoted the notion of sin and realized that if it couldn’t really prevent it, it might as well monetize it through the sale if indulgences. While selling indulgences may benefit those who collect the money, it will not solve the underlying market failure. After rejecting the dogma and its proposed solutions, the paper will show that the orphan works problem is not only a demand-side problem (users find it prohibitively costly to locate owners) but also, or predominantly, a supply-side problem. The problem arises because owners, who do not internalize the full social cost arising from the non- use of their works, don’t have sufficient incentives to make socially optimal investments in maintaining themselves locatable. Even though copyright owners are the “least-cost avoiders” of the problem (they typically know best who they are and how they can be contacted) they do not have enough incentives to provide this information under a strict permission-first rule. Solving the problem, therefore, requires creating such incentives. I propose that owner’s locatability would be a mitigating factor that courts should consider when determining the proper remedy for the infringement of a copyright. In appropriate cases courts should deny injunctions and should also have some discretion to deny or reduce statutory damages. The court may still order the user to pay damages, or account for the profit attributable to the infringed work, but if these approximate what the parties would have agreed had a license been negotiated in advance, the orphan works problem would be seriously diminished. Moreover, if the owner’s behavior becomes relevant as well, aggregating many small claims into a massive class action may become more difficult. This kind of remedy tweaking will shift some of the risk of using orphan works from the user to the owner. It will adjust the user’s duty to seek ownership information and permission with a corresponding duty of the owner to provide such information. This should motivate copyright owners to make themselves locatable: to de-orphan their works. Tort law takes into account a plaintiff’s contributory or comparative negligence; contract law demands that plaintiff take reasonable effort to mitigate their damage before they can recover its full extent. Property law sometimes imposes a duty to provide notice before a right can be enforced. The law does not recognize an unfettered right to sit back and do nothing in all circumstances and regardless of the consequences. Copyright law should not recognize such right as well. Remedy tweaking is a modest yet satisfactory common law solution to the orphan works problem, based on well-established principles of liability and limitations thereto from other areas of law. While statutory reform giving courts clear mandate to tweak the remedies might be fruitful, courts can implement this solution, in large part, even if Congress takes no action.

Sources of University Research Funding and Their Impact On Commercialization Outcomes

Jay P. Kesan Professor & Workman Research Scholar Director, Program in Intellectual Property & Technology Law Theme Leader, Business, Economics & Law of Genomic Biology (BioBEL) IGB University of Illinois at Urbana-Champaign [email protected] | Bio | SSRN

Hsiao-shan Yang Fellow, Institute for Genomic Biology, University of Illinois

The Bayh-Dole Act of 1980 gave U.S. universities control over the intellectual property arising from inventions created through federal government-funded research and the Act is considered by some scholars to incentivize greater efforts in university research commercialization (Jensen & Thursby, 2001). Other studies argue that the change in research funding allocation contributed to the growth of patenting and licensing (Mowery, Nelson, Sampat & Ziedonis, 2001). The presence of technology transfer offices has also been found to have a positive impact on licensing revenues (Heisey & Adelman, 2011). At the same time, Aghion, Dewatripont, and Stein (2008) point out the possibility of negative consequences on innovation as a result of privatizing academic research sooner than is socially optimal.

This study concentrates on university commercialization outcomes by focusing on the effect of the source of research funding, the existence of university technology transfer offices, and their impact on commercialization outcomes such as number of start-ups and licensing income. We apply the Arellano-Bover dynamic panel model to investigate university commercialization performance in relation to industry and government funding. Examining the years 1997-2010, we find that there is a positive impact on academic research commercialization from the growth of technology transfer offices. In addition, we find that federal funding positively affects university licensing income while industry funding negatively affects licensing income. We also examine the disparate effects on start-up activity based on the source of research funding.

The Space Between: An Openwork Approach to IP Protection

Amy Landers Professor of Law, University of the Pacific - McGeorge School of Law [email protected]

Scholars have raised criticisms toward contemplated protection for fashion design.1 Some consider fashion to be subject to a “piracy paradox,” which holds that the industry thrives in the absence of IP protection. Such scholarship considers fashion a part of a vital “negative IP space” that demonstrates success due to characteristics exogenous to legal protection. Such arguments maintain that, conversely, creativity within that industry might be stifled if IP protection extends to that media.

This work examines the extent to which the fashion industry is exceptional. To some degree, the arguments against protection for fashion protection apply to any number of industries that enjoy strong copyright protection. Some misperceptions might arise from treating fashion monolithically,2 or perhaps treating functional articles of clothing in the same manner as those that evidence brilliance. For example, this treatment masks the fact that design businesses bear similar characteristics to startups in other fields. To consider this point, this article will consider some, including Proenza Schouler, a leading design team seeking to establish itself in the current climate. This firm’s story is emblematic of the goals of a growing business in almost any industry—a minimum of a ten-year path to viability, difficulty finding financing, determining an appropriate expansion model, and establishing distribution mechanisms. The company has had designs literally copied and sold at lower price points. To the extent that IP can justifiably extend to more traditional industries, fashion does not facially appear to be fundamentally different.

The current concept of fashion protection is narrowly drawn. At this juncture, there is no real controversy about whether trends, simple t-shirts, and classic driving shoes are intended to be the subject of fashion protection. The answer is no. Unlike some protectionist industries, fashion appears to have recognized a distinction between a pair of socks and, as one example, an ensemble that evokes a combination of obsession, rebellion, and femininity.3 A higher level of originality (akin to novelty) and a high standard to demonstrate infringement are required in the proposed legislation.

1 See, e.g., Kal Raustiala and Christopher Sprigman, The Piracy Paradox: Innovation and Intellectual Property in Fashion Design, 92 VA. L. REV. 1687 (2006); Christopher A. Cotropia and James Gibson, The Upside of Intellectual Property’s Downside, 57 UCLA L. REV. 921(2010).

2 An effort to study the impact of intellectual property on stakeholders has been performed at a more granular level in the patent field, for example. Cf. Stuart J.H. Graham, et al., High Technology Entrepreneurs and the Patent System: Results of the 2008 Berkeley Patent Survey, 24 BERK. TECH. L.J.125 (2009) (considering the manner in which high technology startups use the patent system).

3 See generally Cathy Horyn, Jean Paul Gaultier: Black Magic, THE NEW YORK TIMES (1/26/11) (describing Gaultier’s couture show, stating, “it is hard to truly surprise people. But I think the audience today was stunned.”) available at http://runway.blogs.nytimes.com/2011/01/26/jean-paul-gaultier-black-magic/.

These challenging standards appear to be roughly consonant with fashion’s contribution as an expressive medium. This work argues that this is because fashion’s connection with culture is manifest. It is intended as a reflection, and a revolution, of the zeitgeist as a form of collective vision and thought. Both fashion’s creation and expression are not intended as the isolated expression of an author’s single vision, but rather mixed and individualized by the wearer. For example, Christian Louboutin is not intending to make individual shoes akin to untouchable sculptures. Rather, he is intending to stop traffic with the beauty of a female form.4

In both its creation and the viewer’s experience of its expression, fashion is an openwork medium. As such, a higher standard of originality and infringement are appropriate. Rather than treating fashion as a “negative space,” this article treats it as “a space between” individualized creativity and culture.

Further, this work examines the extent to which this limited concept of protection might be applied to other copyrighted media. The primary example explored in this article is photography, which bears many of the same creative characteristics that are evidenced in fashion design. One might say that photography as a medium could be subject to a “piracy paradox,” in that the sheer numbers of photographs created, copied, and distributed has mushroomed with the rise of easy copying and redistribution mechanisms. Yet unquestionably the medium evidences a spectrum of works, from those that factually record to those that represent highly introspective or imagined visions. Further, although any individual photograph may take little effort or thought, others require a developed and nurtured eye. Further, a limited number of images hold considerable expressive power along the same order as a song, film, or novel.

Like fashion, photographs are a product and driver of the zeitgeist. They are (sometimes simultaneously) artifacts of expression as well as a reflection of culture.5 Photographs capture facts about the world and, like fashion, are built on exogenous inputs rather than a single authorial statement. Their expressive power depends on their ability to evoke visual symbolism to viewers who speak a common cultural language. As Gary Metz has said, “the serious photographer must use such related ‘familiar’ photographic phenomenon for the explication and expression of an intensely personal sensibility in a social context where photography has statistically, as if by accident, become a pervasive ingredient for our collective experience.”6 As one example, Andy Warhol’s photographs of then-body builder Arnold Schwarzenegger during the 1970’s appear (at a superficial level) no different than millions of snapshots taken at any party. However, once the cultural context is overlaid, a meaning that evidence’s Warhol’s

4 That protection for Louboutin’s works are analyzed under trademark law is, in this author’s view, a fundamental distortion. Further, it illustrates that functionality might be an inadequate solution for limited forms of protection.

5 Thomas F. Barrow et al., READING INTO PHOTOGRAPHY, 2 (1982) (noting that a photograph can be a work of art and simultaneously an artifact of popular tradition).

6 Quoted in Nathan Lyons, THE GREAT WEST: REAL/IDEAL, 9 (1977).

examination of gender, power, and celebrity begin to emerge. In 2012, these same photographs shift their meaning as Schwarzenegger has modified his public persona in the ensuing years. In other words, beyond anything Warhol has done, culture has changed the expressive meaning of those photographs. Because photographs depend on exogenous inputs for both their creation and their expressive power, a more limited form of protection becomes appropriate.

Other examples may be appropriate for heightened copyrightability and enforcement requirements. Fundamentally, this category may be applied to any media that is dependent of exogenous factors for the existence and expressive power of its works.

Nominative Fair Use Still Doesn't Make Sense

Greg Lastowka Professor of Law, Rutgers School of Law-Camden [email protected] | Bio

This draft article explores and criticizes the doctrine of nominative fair use. This draft article explores and criticizes the doctrine of nominative fair use. Nominative fair use was ostensibly invented as a means of protecting defendants in trademark infringement lawsuits from liability in order to preserve their rights to free speech. However, in short order, it morphed into a test whereby plaintiffs were no longer required to carry the burden of proving infringement. After the Supreme Court corrected the Ninth Circuit's errant doctrine, the plaintiff's burden of proving confusion in that circuit was replaced with the substitute burden of disproving the defendant's "nominative fair use." Yet the resulting test is still a doctrinal mess, blending concepts of copyright with trademark law and working to suppress free speech in the marketplace. Ideally, "nominative fair use" would be scrapped and replaced with a doctrine of "non-trademark use," which would fit better with trademark theory and would more effectively protect rights of free speech.

VICTORIAN COPYRIGHT LAW REFORM AND THE ROYAL COMMISSION ON COPYRIGHT

Barbara Lauriat University of Oxford

Abstract

Nineteenth century English copyright was a controversial and unresolved area of law, ‘wholly destitute of any sort of arrangement, incomplete, often obscure’, according to the Royal Commission on Copyright. Even after Parliament passed the 1842 Copyright Act (5 and 6 Victoria c 45), stakeholders continued to cry for further reform and clarification of the law, which became further confused with each new sui generis statute or contradictory holding. Rampant American piracy of English works and Canadian trade in unauthorized American copies added to the problems, and recent scholarship has provided excellent insight into the ‘internationalization’ of copyright law in the nineteenth century. Still, British domestic law remained an area of active debate throughout the nineteenth century: some argued for broadening protection and extending term—others recommended outright abolition. Under pressure to address these issues, the government assembled a Royal Commission on Copyright in 1875; it was re-formed in 1876, after the death of the first Chair. The Royal Commission, which was composed of prominent members from varied backgrounds, including politician Lord John Manners, economist Sir Louis Mallet, composer Sir Julius Benedict, jurist and journalist James Fitzjames Stephen, and author Anthony Trollope, conducted lengthy hearings before producing an 1878 report. In addition to considering colonial complications and ‘The American Question’, it addressed and dismissed the Board of Trade’s forceful case for copyright abolition, producing a strong dissent by the Cobdenite Mallet. Altogether, it was a particularly thorough and well-considered inquiry, with a diverse, informed, and largely independent membership taking into account legal, philosophical, economic, public policy, and practical issues, as well as their own personal experiences. This paper will briefly discuss my research on the Royal Commission on Copyright, focusing on the background of the Commission’s formation and the individuals involved. I have taken a wide legal historiographical approach to a relatively narrow topic—also considering the political, popular, and personal spheres affecting, and affected by, 19th-Century copyright law. The worlds of the Victorian political, legal, and artistic elite were small and often overlapping. Without an awareness of this, legal subtleties may be lost. Although British copyright did not undergo major reform until 1911, I contend that the Royal Commission, described by Mathew Arnold as ‘a great battle’, was significant to the subsequent development of the law and reflects a noteworthy chapter in the ongoing debate over the theoretical foundations of copyright law, a useful empirical inquiry into the practical effects of copyright legislation on the marketplace, and an example of a 19th-century legal reform and codification movement. Internet Curation in Copyright’s Shadow: Pinterest, Storify, and a Proposal for “Copyright Exempt” 501(c)(3) Entities

Edward Lee Director, Program in Intellectual Property Law, IIT Chicago-Kent College of Law [email protected] | Bio

New types of social networks have recently emerged that have facilitated the growth of a different kind of user-generated content: curation. The user finds various content from the Internet and then organizes or “curates” the content in a social network platform in a way that better serves the user’s purpose. For example, on Pinterest, users can “pin” content from the web onto their virtual “pinboards” that have topical categories of the users’ choice. The content typically involves a photograph (in reduced size) from the original web page that is then displayed on the user’s pinboard. Clicking on the photograph displays the actual photograph (or a copy of it), but displayed on the Pinterest website, with attribution and a link to the original website. In this way, the user is able to organize content from the web visually by the user’s own categories, such as favorite recipes, yoga instruction, furniture to buy, or places to travel.

Likewise, Storify is a social network that enables its users to create “social stories” drawn from content on Twitter, Facebook, the photo-sharing site Flickr, YouTube, and the Internet in general. A Storify user can search all of these networks for a particular term or topic, and then easily “drag and drop” the content—a tweet, a Facebook status update, a photo on Flickr or the Internet, or a YouTube video—to a new page on Storify to create a story akin to a blog post. For example, a user might write a story about whether the proposed “Buffett rule” to tax the wealthy is a good idea. The user can create a story by writing a headline, adding a photo of Warren Buffett drawn from Google image search, and creating a virtual debate drawn from various Tweets of others on the topic. Like Pinterest, the embedded content on Storify provides attribution and a link back to the original Internet source.

Pinterest and Storify have generated acclaim and a mass of users to their networks. Indeed, Pinterest reached 10 million users faster than any other site in history and now boasts 20 million users in the second year of its existence. Storify has not drawn as big a following, but its network still attracts 1.2 million users, with 14 million views of their stories in March 2012. As a sure sign of their importance, the Obama White House is a user of both networks—perhaps hoping to reach potential voters.

Of course, in the background of both networks lurks copyright law, waiting to rear its proverbial head. The kind of content curation Pinterest and Storify facilitate may constitute copyright infringement, although at least an arguable defense based on fair use or the DMCA safe harbors exists. Thus far, no copyright owner has sued either Internet service. Yet one lawsuit filed against either site could put in jeopardy this emerging practice of content curation—quashing it generally.

1 In prior scholarship, I have identified the importance of focusing on these nascent stages of a new speech technology and the informal practices with respect to copyrighted works they foster. Warming Up to User-Generated Content, 2008 U. ILL. L. REV. 1459. There, I proposed a 5-part test to guide policymakers in evaluating whether an informal copyright practice with respect to user-generated content—conducted within a gray area of law—should be considered a legitimate practice.

In this paper, I apply this 5-part test to content curation on Pinterest and Storify to evaluate how it might fare—perhaps favorably—under the test. In addition, I suggest a way for Congress to address, more generally, the recurring problem created by new speech technologies running into a gray area of copyright law. The proposal is for Congress to enact a copyright exemption for qualifying 501(c)(3) non-profit entities. (1) These entities will be “copyright exempt” for a limited purpose to develop and deploy new kinds of Internet speech technologies (see subsection 2 below) free for the public’s use. These entities will be considered “charitable” in their pursuit of the “advancement of education or science” under 501(c)(3). IRC § 501(c)(3).

(2) The copyright exemption is limited to Internet speech technologies that (i) are offered to the public for free, (ii) enable the user to add some creative expression to her use of copyrighted materials—such as in its selection, arrangement, or coordination of content, and (iii) require attribution of the author or Internet source of the copyrighted materials used. The exemption would apply only to copyrighted materials that have already been posted for free viewing on the Internet with the copyright owners’ consent. Thus, if Pinterest or Storify were non-profit entities instead of for-profit corporations, their technologies enabling Internet curation would qualify for this exemption as to all copyrighted material freely viewable on the Internet by the copyright holders’ consent. By contrast, unauthorized file-sharing would be ineligible for this exemption because it does not involve any user created expression or authorized copies of the music files. Likewise, if Google Book Search were a non-profit entity, it still would fail to qualify for the exemption because the copyrighted works involved in the Google database had not been offered for free viewing on the Internet by the copyright owners.

(3) The copyright exemption could be further limited to “United States works,” works whose country of origin under the Berne Convention is the United States. This limitation would preempt any challenge by another country to the exemption under TRIPS Agreement Article 13 (“three step test”). (4) Finally, the copyright exemption could be designed to last indefinitely or, instead, for a shorter period. The idea would be to permit at least a certain period of years—an “incubation” period—in order to allow the technology to develop and to allow for better evaluation of its value to society.

2 Patents and the University

Peter Lee Professor of Law, UC Davis School of Law [email protected] | Bio | SSRN

This Article traces the co-evolution of the patent system’s interactions with university research. It advances a “convergence thesis” that argues that patents and academic science have moved from each other’s peripheries to their respective cores. Patent decisions up to the mid-twentieth century recognize tacit boundaries between the patent system and academic science by emphasizing the basic, noncommercial nature of academic research and the impropriety of extending exclusive rights over university discoveries. In reciprocal fashion, academic scientists often invoked communal norms in eschewing patents on their work. However, with shifts in research programs and increasing patenting and commercial activity by universities, fueled in part by the Bayh- Dole Act, universities have moved to the center of the patent system. This is reflected doctrinally in a host of decisions recognizing the active participation of universities in the patent system and refusing to treat them any differently from other actors in the innovation economy. These developments both reflect and reinforce a related cultural shift in which universities and university scientists now see patenting and commercial activities as valuable elements of their academic missions. With the Leahy-Smith America Invents Act, the incorporation of universities into the patent system has reached a new level, as elements of the new first-inventor-to-file system were adopted in significant part to accommodate academic research practices. Following this descriptive account of the interpenetration of academia and the patent system, the Article concludes with normative guidelines for how the patent system should treat academic science differently than other types of innovative activity. The New Essentialism and Identity in the Age of Leahy-Smith

Jeffrey A. Lefstin Professor of Law, University of California, Hastings College of the Law [email protected] | Bio

A naïve observer comparing the 1952 Patent Act and the Leahy-Smith America Invents Act might note, aside from Leahy-Smith’s substantive reforms, its careful employment of the term “claimed invention” rather than simply “invention.” This is of course not surprising; despite the long pedigree of the peripheral claim system, Leahy-Smith is the first major patent statute enacted after the claim became established as the primary delimiter of identity in United States patent law. Yet it also comes at a time when patent jurisprudence – particularly at the Supreme Court – has been groping towards more essentialist approaches to identity of inventions.

Historically, the essentialist notion of invention rested on the mental act of conception: a term which Leahy-Smith has excised from the patent statute. Yet despite the abandonment of prior conception as the basis for priority, patent doctrine will still demand tests of identity for which conception, along with other definitions of the invention, will be indispensible. Although the peripheral claim alone may serve as the test for identity in infringement and anticipation, patent doctrine still demands tests of identity in other contexts – such as derivation, double patenting, exhaustion, and patent- eligible subject matter – for which the peripheral claim is inadequate. Leahy-Smith itself adds a new doctrine – preclusive inventor disclosure – which will demand a new test of identity to determine whether a claim is patentable despite prior disclosure. The Return of Functional Claiming

Mark A. Lemley William H. Neukom Professor, Stanford Law School Partner, Durie Tangri LLP [email protected]

Patent law purports to promote innovation by giving inventors the exclusive right to their inventions. In fact, however, modern patent law pays far less attention to what the patentee actually invented than to the patent “claims” – the legal definition of the scope of the patent drafted by lawyers. And lawyers have a natural tendency to broaden those claims as much as possible in order to secure the strongest possible rights for their clients. The result, particularly in the software and Internet industries, has been a proliferation of patents with extremely broad claims, purporting to own everything from international electronic commerce to video on demand to emoticons to means of hedging commodity risk.

Patent law has faced this problem before. Seventy-five years ago, in the wake of the law’s move away from a focus on what the patentee actually built towards what the lawyers defined as the boundaries of the invention, patent lawyers were increasingly writing patent claims in broad functional terms. Put another way, patentees were claiming to own rights not a particular machine, or even to a particular series of steps for achieving a goal, but to the goal itself. The Supreme Court ultimately rejected such broad functional claiming in the 1940s as inconsistent with the purposes of the patent statute. When Congress rewrote the Patent Act in 1952, it adopted a compromise position: patentees could write their claim language in functional terms, but when they did so the patent would not cover the goal itself, but only the particular means of implementing that goal described by the patentee and equivalents thereof. These “means-plus-function” claims permitted the patentee to use functional language to describe an element of their invention, but did not permit her to own the function itself however implemented.

Functional claiming is back. While experienced patent lawyers generally avoid writing their patent claims in means-plus-function format, software patentees have increasingly been claiming to own the function of their program itself, not merely the particular way they achieved that goal. Both because of the nature of computer programming and because of the way the means-plus-function claim rules have been interpreted by the Federal Circuit, those patentees have been able to write those broad functional claims without being subject to the limitations of section 112(f).

Commentators have observed for years that patents do less good and cause more harm in the software industry than in other industries such as pharmaceuticals. Software patents create “thickets” of overlapping inventions, and are asserted in droves by patent “trolls” against innovative companies. Some have argued that software isn’t the sort of thing that should qualify as an invention at all. Others have pointed to the laxity of the Patent and Trademark Office (PTO), which they say has allowed too many patents on obvious software inventions. Still others say that the problem is the absence of clear boundaries, so that it is impossible to know whether a patent claim covers a particular product without going to court to get a ruling on what the patent means.

While there is some truth to each of these criticisms, it is broad functional claiming of software inventions that is arguably responsible for most of the well-recognized problems with software patents. Writing software can surely be an inventive act, and not all new programs or programming techniques are obvious to outside observers. So even if there are too many software patents, the patent thicket and patent troll problems won’t go away if we simply reduce the number of software patents somewhat. And while the lack of clear boundaries is a very real problem, the most important problem a product-making software company faces today is not suits over claims with unclear boundaries but suits over claims that purport to cover any possible way of achieving a goal. The fact that there are lots of patents with broad claims purporting to cover those goals creates a patent thicket. And while the breadth of those claims should (and does) make them easier to invalidate, the legal deck is stacked against companies who seek to invalidate overbroad patent claims.

While there are some benefits to broad functional claims in software, they are insufficient to justify the costs they impose. As it did seventy-five years ago, the law should rein in efforts to claim to own a goal itself rather than a particular means of achieving that goal. Doing so should not require legislative action; it is enough to interpret existing section 112(f) in light of the realities of software and modern patent practice.

In Part I, I discuss the history of functional claiming and how it was cabined. In Part II, I describe the explosion of functional claims in software and how they have managed to skirt the limits imposed on functional claiming. In Part III, I argue that functional claiming in software is responsible for many of the ills that beset the software patent system. Finally, in Part IV, I argue that the problem could be solved simply by applying the rules of means-plus-function claims to software. While doing so would narrow the scope of software patents, unfairly in a few cases, on balance the social benefits would be substantial. Cardozo on Patent Claim Construction and Interpretation

David S. Levine Assistant Professor, Elon University School of Law Affiliate Scholar, Center for Internet and Society, Stanford Law School [email protected] | Bio

This article proposes that patent claim construction and interpretation fully adopt Judge Benjamin Cardozo’s contextual method of contract construction and interpretation, made famous by Jacob and Youngs v. Kent, commonly known as the “Reading Pipe case.” There has been a recent trend in patent law to examine claims holistically, and this article examines whether that concept should be formally adopted, based upon Cardozo’s Reading Pipe analysis and justification, and particularly as it relates to claim interpretation and construction and its impact on remedies calculations.

The (Relatively) Easy Case for Patents on Inventions

Oskar Liivak Associate Professor, Cornell Law School [email protected]

This article aims to justify (at least part of) the current patent system. It argues that the normative purpose of the patent system is to form a private property market for inventions. Three concepts makes this objective notable: justify, market, and inventions. The patent system is quite old yet it still lacks a solid normative justification. Current patent theories focus on incentives, access and exclusion. Those theories have never been able to prove that the system actually promotes technological progress. This article aims to build its justified alternative patent theory around the existing private property market by adapting and extending that institution to the problem of technological production and exchange. That is notable because towering work in economics has long argued that, as a general matter, such an extension of the market is ill-conceived and unlikely to succeed. This article agrees with those objections for ideas and information generally yet this article argues that patent law (descriptively) does not and (normatively) should not have such broad reach. Instead the system should focus on inventions. Notably modern patent theory has largely ignored exploration and appreciation of the invention as a unique link between technological and economic parameters. Inventions are special packets of information whose characteristics enable us to build private property markets in inventions despite the fact that we cannot easily do so for ideas and information generally. In addition to providing a much-needed normative account, this narrative also reorients the focus of the system and provides limiting principles for that system. Current patent theories see the patent system as a strange kind of market where naked exclusion and permission are exchanged. The narrative developed here rejects that vision and returns the focus to the exchange of useful things, in particular inventions. Property and exclusion are still necessary in this story but they are instrumental, background features. Furthermore, the narrative provides a much needed account of the limitations of the patent system. Recent decisions by the Supreme Court have limited patentable subject matter yet they have lacked a workable normative principle. The normative focus on inventions makes sense of those doctrinal limitations. The characteristics that make inventions suitable for market commodification also explain why abstract ideas are rightfully outside the bounds of patentable subject matter.

Cracks in the Edifice: a Copyright Critique of the Institutional First Amendment

Jake Linford Assistant Professor, Florida State University College of Law [email protected] | Bio | SSRN

Twice in the last ten years, the Supreme Court has brushed off First Amendment challenges to the current copyright protection regime on the ground that the fair use and idea / expression dichotomies built into copyright law sufficiently incorporate First Amendment values. Outside of tampering with these “traditional contours,” the Court has signaled its significant deference to the judgment of Congress in how it exercises the power granted by the Intellectual Property Clause to order copyright protection.

In the First Amendment context more generally, the Court has invested considerable energy in distinguishing between protected speech and non-protected activity. Copyright’s fair use doctrine does not perfectly fit this traditional mode of analysis, but there is an undercurrent that we should be protecting potentially infringing activities that have something to say, i.e., where the unauthorized use allegedly transforms or comments on the work appropriated, instead of merely circumventing the rents that that copyright owner is otherwise allowed to extract. Historically, the Court also differentiated between core and non-core speech, although this distinction has eroded somewhat as the Court has extended more First Amendment protection to commercial speech. The idea-expression dichotomy is in a way the flip side of this mode of analysis, leaving outside of copyright protection the use of some material not because we value the use but because the raw material cannot be reduced to ownership.

There is a third rail of constitutional analysis, initially championed by Fred Schaeur, arguing we are better advised to consider which institutions are best suited to protect First Amendment values, and those institutions therefore merit broader First Amendment protections. This notion of an Institutional First Amendment has recently been considered in debates over what to make of the Press Clause. I argue in this paper that the Copyright Act preferences certain classes of institutional actors, but in so doing reveals a potential dark side to the institutional competence account that I see as underlying the Institutional First Amendment rationale. This is more than a simple logrolling argument. While some of the choices may have been motivated by parties exercising superior coordination and lobbying skill, the text of the statute embodies an Institutional First Amendment mindset in ways that initially appear unproblematic, but suggest that Congress is deeply involved in selecting between First Amendment winners and losers. Deferring to Congressional attempts to do so is a danger inherent in any system embracing the Institutional First Amendment viewpoint. Imperatives of Private Arbitration in International Intellectual Property Disputes

Mary Wong Professor of Law & Director, Franklin Pierce Center for Intellectual Property University of New Hampshire School of Law [email protected] | Bio

Jacqueline Lipton Professor of Law & Associate Dean for Faculty Development and Research Case Western Reserve University Baker Botts Professor of Law & Co-director, Institute for Intellectual Property and Information Law University of Houston Law Center (August 2012) [email protected]

The introduction of ICANN’s new gTLD process in 2012 will put more pressure than ever on private methods of dispute resolution, both within the application process for the new gTLDs and within the second level domains of any new gTLDs granted by ICANN. Many of the people charged with resolving these disputes will have had prior experience as arbitrators of disputes in the pre-existing gTLDs under the auspices of the Uniform Domain Name Dispute Resolution Policy (UDRP). Many of the same balancing issues are likely to arise in the new gTLD process between protecting trademark interests against competing interests such as free speech, privacy, culturally and geographically significant terms, and personal names.

The UDRP was implemented in 1999. Despite its success in numbers of disputes resolved and cost and speed with which those disputes are resolved, the provisions of the UDRP and its practical operations have never been meaningfully reviewed. As intellectual property disputes become increasingly global, particularly in the Internet context, more pressure is put on private arbitration systems such as the UDRP and the new dispute resolution procedures to be implemented under the new gTLD process. This is unsurprising given the lack of other bodies with constitutional competence to resolve such disputes in a time and cost effective manner.

The authors argue that because of the increasing significance of private arbitration mechanisms in international intellectual property disputes, it is imperative that existing, and proposed new dispute resolution procedures be examined to ensure that they strike an appropriate balance of interests. These mechanisms should be developed and applied to take account of the importance of globally significant social values such as free speech, democracy, privacy, and effective commercial competition. We provide a close examination of the UDRP and compare it to the new Uniform Rapid Suspension System (URS) to demonstrate opportunities that may have been missed to date in achieving appropriate balances of interests in the private arbitration context. Copyright Complements

Jiarui (Jerry) Liu J.S.D. Candidate, Olin Fellow in Law & Economics, Stanford Law School [email protected] | Bio | SSRN

The current struggle of the music industry has led a few commentators to conclude that the development of information technology has entirely outgrown copyright law. They are of the view that copyright law was originally designed for a brick-and-mortar world where commercial intermediaries (e.g. music labels and publishers) played a central role in developing distribution channels and exploiting copyrighted works. The advent of digital technology, however, has removed the physical confines and decentralized the powers of content distribution. This transformation, sometimes referred to as “selling wine without a bottle”, allegedly renders copyright law obsolete together with traditional bottlenecks. Several high-profile scholars including (Nobel Prize winner and Supreme Court justice) suggested that, in a world without copyright law, consumers would have wider access to low-price or even free information products and authors would be likely to continue receiving enough (if not more) incentives from alternative revenue streams such as touring, advertising, and merchandising. Accordingly, society as a whole could be better off despite individual losses of commercial intermediaries.

Notably, those who applaud the marginalization of copyright law appear to attach much importance to the phenomenon that recorded music and ancillary products/services are oftentimes complementary goods. They believe that the widespread distribution of unauthorized copies could actually serve as a promotional tool to boost such ancillary markets. In this sense, authors would indirectly benefit from unauthorized copies and should embrace online piracy if they are technology-savvy and farsighted enough. This article, based on modern economic theories of complementary goods and bundling, argues that the increasing reliance on alternative revenue streams is merely a second-best solution for the copyright industry. Such alternatives were feasible and generally in existence long before the digital age. But they used to play more of a secondary role to recorded music until uncontrolled online piracy started to plague music sales. This suggests that the first-best solution (if feasible) would be to preserve the copyright market and allow market players to discover on their own what combination of music sales and alternative revenue streams is most efficient. In addition, this article will argue that, even assuming alternative revenue streams are here to stay, copyright protection should still be vital for the sustainable development of the music industry. Deviant Globalization: The Next Step in the Multilateral Protection of Intellectual Property

Doris Estelle Long Professor of Law & Chair, Intellectual Property, Information Technology & Privacy Group The John Marshall Law School [email protected]

The official signing of the Anti-Counterfeiting Trade Agreement (ACTA) marks the beginning of another phase of disengaged multilateralism. Like earlier periods, it could prove to one of experimentation. One area of experimentation can and should be the effort to incorporate the needs and practices of the informal economy. This informal economy plays a vital role in local markets and on the internet. It exists beyond, but not necessarily disconnected from, the traditional, regulated (formal) market. While there is an underground and illicit element to this informal economy (what I refer to as deviant globalization, because it deviates from what is perceived as “normal” or “regulated” globalization), there is also an element of allowing individuals to create an economically viable destiny. More importantly, the informal market contains its own “standards” and customs which could serve as potential models for re-imagined IP standards for the 21st Century. With its focus on practical economics and social justice, deviant globalization would help clarify future IP protection policy choices. It places the focus on the needs of an effectively working marketplace. Thus, harmful goods (such as counterfeit drugs) would be subject to more creative methods of enforcement. Similarly, access debates would focus increasingly on rational compensation and use schemes. In this new era of deviant globalization and multilateral disengagement, new balances should be struck which fully recognize the incorporate the legitimate concerns and goals of the informal economy and deviant globalization.

A National Database for Intellectual Property Valuation

Matthew J. Dowd Associate, Wiley Rein LLP [email protected] | Bio

Brian J. Love Teaching Fellow in Law, Science & Technology, Stanford Law School Assistant Professor, Santa Clara University School of Law (Fall 2012) [email protected] | Bio | SSRN

Recent legal scholarship has focused intensely on the issue of patent remedies, including patent damages. Numerous articles have explored various aspects of the proper remedy for patent infringement, such as whether average infringement awards overcompensate or undercompensate the property right holder. Additionally, recent case law from the Court of Appeals for the Federal Circuit has reevaluated the application of the court’s well-settled paradigms for determining monetary remedies for patent infringement.

The current focus on—and rethinking of—patent remedies is timely. A proper assessment of the value of intellectual property is necessary to ensure the proper balance between encouraging innovation through exclusive rights and stifling competition with overly broad monopolistic rights. An accurate valuation of patented inventions ought not to be a guessing exercise.

Even with the advances in jurisprudence and legal scholarship relating to patent remedies, one significant hurdle remains before legal remedies for intellectual property infringement can be substantially improved. The hurdle is a severe information deficit concerning the real-life valuation of intellectual property. Without sufficient information about what firms actually pay for the right to use patented inventions, legal scholarship and judicial opinions will continue to fall short of what is needed to meet the needs of an economy based primarily on intellectual property.

Quite simply, courts need better information about the value of patented inventions. A court’s substantial deference to jury determinations of patent damages awards implicitly acknowledges that both trial and appellate judges are not well situated to determine whether a jury’s award was correct. Furthermore, legal research rarely provides an empirical analysis of whether a particular damages award is statistically over- or under- sized based on the type of technology.

This article proposes the establishment of a national database for intellectual property valuation. The database would be a confidential source of information to allow courts to understand better the true value of patented inventions.

The proposed national intellectual property valuation database would be a storehouse of data, such as licensing fees, damages awards, and other financial data, linked to specific intellectual property, including patented inventions. The database would enable jurists

and legal scholars to assess, for example, whether the Georgia-Pacific paradigm for determining the reasonable royalty is a viable paradigm.

Under the proposal, every patent owner would be required to submit to the agency overseeing the database certain information relating to the IP valuation. The types of information submitted by the patent owner would, at a minimum, include financial data sufficient to assess the value of a patent. Such data would include licensing fees, settlements, court-awarded damages, and other information signifying the value of the IP asset. The data would be associated with specific intellectual property, such as patents. Submitted data could also include sales figures for assets sold at auction.

The information itself in the database would not be publicly accessible. Most licensing information is currently confidential business information, and this proposal does not seek to modify the status quo. In fact, much of the data analysis can be done using computer algorithms without the need for human review.

Instead of disclosing the underlying data, the responsible agency would generate a report based on the valuation data. The exact format and specificity of the report is, at this stage, subject to further refinement. The general idea would be to report valuation data using ranges of valuation numbers associated with classes of IP. The report could describe the ranges of valuation for various classes of inventions. For example, the report could list the number of patents linked to valuations in gradients of half-million dollars. To maintain the confidential information, the report would not disclose that a specific pharmaceutical patent was associated with a specific license deal worth a specific amount.

The precise structure of the classification of information would be refined as additional stakeholders engage in the development of the database. The degree of specificity could be varied, depending on the information received and the robustness needed. The various alternatives are discussed in further detail in the full paper.

The report generated from the database could serve a number of purposes that would advance the purpose of patent infringement awards. Importantly, the IP valuation report ought not to be viewed as an indication of the maximum or minimum value of a particular type of technology. Instead, one role the report might have is to highlight when a particular patent damages award is excessive, but the report would not by itself be dispositive. A For instance, with a large damages award, a court could consider the report to determine if the award is unusually high for a particular category of invention. If it is, the court (or jury) would examine the other evidence to determine whether the patentee provided a sufficient evidentiary basis for the large award.

Furthermore, the IP valuation report could provide information sought under Factor 2 of Georgia-Pacific. Under that factor, the court (or jury) considers “[t]he rates paid by the licensee for the use of other patents comparable to the patent in suit.”

The proposed database raises a number of administrability issues. Which agency should be responsible for the data? On one hand, the data will relate to patents and trademarks;

thus, the PTO would be a prime candidate. On the other hand, the Federal Trade Commission or the U.S. Securities and Exchange Commission (SEC) are more experienced with handling sensitive financial data. How long should data be retained? Can other federal agencies access the data? These and other practical issues are explored in the full article.

The current article also explores ways to ensure participation in the national intellectual property valuation database. The database would be virtually worthless unless the agency could ensure meaningful participation rates. Various options are proposed for ensuring participation. For instance, one option would provide the agency with powers to imposing financial fines on patent owners who fail to supply the requested information. Alternatively, courts could be empowered to refuse to enforce judgments in favor of non- participating patent owners until the patent owner submits the database information to the responsible agency. Other options are discussed in the full paper.

The full paper will discuss various implications associated with establishing the database. Depending on what options are selected, the agency may need to conduct notice-and- comment rulemaking for aspects of the database. To maximize the database’s utility, the agency would have to establish clear and understandable guidelines for the submitted valuation information. Some data might include information about the amount of money the patent owner has invested in developing the patented invention. Common definitions of accounting (e.g., generally accepting accounting principals) would need to be developed by the agency. Additionally, certain options may require authority from Congress through statutory changes.

Initially, the intellectual property valuation database would focus on utility patent valuation. The proper valuation utility patents is perhaps one of the most pressing issues in IP today. Moving forward, however, the database can be expanded to include other types of intellectual property, including design patents, plant patents, trademarks, and copyrights.

Finally, government-mandated disclosure of confidential information is common. Such disclosures routinely occur in dealings with the U.S. Food & Drug Administration (FDA), the SEC, and even the PTO (e.g., patent applications subject to secrecy order). Patent owners may respond that submitting confidential licensing information to a federal agency is wrought with problems and unprecedented. But past experiences with FDA, SEC, and PTO should confirm that, with the proper safeguards in place, a national intellectual property valuation database could generate the needed valuation information without disclosing specific, confidential information of specific firms or patents.

This paper seeks to be a starting point for a national discourse. The paper explores the various ways a national intellectual property valuation database can be implemented. The paper focuses on both the practical issues involved with implementing the database and the legal and theoretical bases for furthering the goal of accurate valuations of patent infringement. As more interested parties engage the discussion, we will gain further information that will enable the optimal implementation of the database.

April 29, 2011

An Empirical Study of Patent Litigation Timing: Could A Patent Term Reduction Decimate Trolls Without Harming Innovators?

Brian J. Love

Teaching Fellow in Law, Science & Technology • Stanford Law School 559 Nathan Abbott Way, Stanford, CA 94305 • [email protected] • (650) 721-5592 Online Bio, SSRN Author Page

My work-in-progress is an empirical study of patent litigation timing – i.e., when, and for how long, during the patent term patents are litigated. My hypothesis is that NPEs, particularly those asserting acquired patents, tend to file numerous suits late in the patent term and litigate to the bitter end, while product-producing companies tend to file a small number of suits early in the patent term before eventually shifting focus to newer patents protecting next generation products.

To test my hypothesis, I am building a database of litigated patents issued between May 1993 and April 1994 – i.e., those that entered the public domain in the last year. Using Westlaw’s Derwent LitAlert database, PACER, and Lex Machina, I have identified over 1100 such patents, and I am currently gathering data for a random sample. I am coding each patent by technology area, industry, and its owner’s NPE-status. Among other data points, I am also recording the date each was first asserted in litigation, the date litigation asserting each ended for good, and the total number of cases in which, and accused infringers against which, each was asserted. To date I have completed about 350 patents and plan to finish about 100 more in the next few weeks before analyzing the data in depth. My early results are promising, though admittedly nascent at this time: approximately 90% of litigated patents owned by product companies are no longer involved in litigation by 14 years after their issue date, while approximately 50% of litigated patents owned by NPEs (of all varieties) are still being litigated 14 or more years after issue.

If the data bears out my hypothesis under greater scrutiny, a number of simple reforms might significantly reduce the number of cases brought by “trolls” without significantly impacting legitimate innovators. For one, a targeted increase in the frequency and magnitude of maintenance fee payments late in the patent term may successfully draw more patents into the public domain before they fall into the hands of NPEs. More dramatically, the data may well show that the patent term can be truncated (perhaps by several years) to a duration that will accommodate virtually all patent litigation initiated by product companies while preventing a significant percentage of potential suits brought by NPEs from ever being filed. April 29, 2011

An Empirical Study of Patent Litigation Timing: Could A Patent Term Reduction Decimate Trolls Without Harming Innovators?

Brian J. Love

Teaching Fellow in Law, Science & Technology • Stanford Law School 559 Nathan Abbott Way, Stanford, CA 94305 • [email protected] • (650) 721-5592 Online Bio, SSRN Author Page

Jamie Lund Assistant Professor, St. Mary's University School of Law [email protected]

In an action for copyright infringement for violation of the reproduction right, similarity between the copyrighted and challenged works is assessed to determine both: (1) whether the accused infringer actually copied elements of the copyrighted work and (2) whether the accused infringer appropriated enough of the original expression to be actionable, i.e., whether an improper appropriation has occurred. These are independent determinations: the former speaks to copying as a factual matter whereas the latter speaks to copying as a legal proposition, and more precisely, whether a sufficient quantum of original, protectable expression (measured from a qualitative or quantitative standpoint) has been appropriated such that liability should attach. Proof of both types of copying is necessary for a copyright plaintiff to be successful. For example, jurors may find that idiosyncrasies shared by the works indicate a probability of copying but that what was copied was not original expression. In such a case, no copyright infringement has occurred because only factual copying has been established, not legal copying.

To examine how jurors make both of these determinations, an experiment was conducted with mock jurors in a controlled setting. The jurors were presented with music from actually-litigated cases and asked to assess similarity as evidence of factual copying and misappropriation. Preliminary analysis suggests that most jurors indicated significant to gross confusion or misunderstanding regarding the jury instruction for misappropriation. Jurors seemed better at understanding and applying the concept that similarity could be evidence of factual copying. Interestingly, a significant number of jurors found factual copying where there was no misappropriation and vice versa. This could be due to jurors being confused, apathetic, or it could be evidence that jurors are focusing on different aspects of similarity in determining copying versus misappropriation.

Glynn S. Lunney, Jr. McGlinchey Stafford Professor of Law, Tulane University School of Law [email protected]

Over the last twenty years, justifications for broader copyright protection have taken an increasingly mercantilist turn. In the recent debates over the Protect Intellectual Property Act (“PIPA”) and the Stop Online Piracy Act (“SOPA”), proponents did not seriously argue that these measures would enhance welfare by encouraging the production of more and better works of authorship. Rather, they argued that these bills would increase revenues to domestic copyright owners, and thereby create jobs and enhance the balance of trade. This shift from neoclassical welfare economics to mercantilist justifications for policy is not unique to PIPA and SOPA, however. Rather, it has become a defining feature of United States trade policy with respect to copyright and intellectual property, more generally, over the last two decades. Moving away from the tenets of free trade, trade policy in the intellectual property arena has sought increasingly to protect domestic industries from foreign competition, and to ensure thereby more revenue for, and more jobs in, those industries and a better balance of trade for the United States.

While more revenue, more jobs, and a better balance of trade may all sound like good things, this mercantilist approach to trade remains as empty today as it was in 1776 when Adam Smith famously refuted it. Because we seem to have forgotten the lessons Adam Smith so patiently taught us, this article explores whether more revenue, more jobs, and a better balance of trade can provide a sensible basis for a copyright- protective trade policy. Through a simple model, it demonstrates that extending an overbroad domestic copyright protection regime into international trade only exacerbates the domestic welfare losses such a regime generates. It then demonstrates why such a policy may nonetheless prove politically attractive, despite the welfare losses it generates. Glynn Lunney is the McGlinchey Stafford Professor of Law at Tulane University School of Law. He holds an engineering degree from Texas A&M, a law degree from Stanford, and a Ph.D. in economics from Tulane. Professor Lunney teaches and writes in the fields of contract, property, and intellectual property, with a focus on the economic analysis of legal issues. He has recently published a casebook, TRADEMARKS AND UNFAIR COMPETITION (WEST 2010), and has also published articles in leading law reviews, including reviews at Harvard, Stanford, Michigan, Virginia, Vanderbilt, Emory, and Tulane. Patent Claim Construction in the United States as a Form of Legal Interpretation

Christian E. Mammen Acting Assistant Dean of International & Graduate Programs & Visiting Professor of Law University of California Hastings College of the Law [email protected] | Bio

The central thesis of this paper is that the construction of patent claims is a form of legal interpretation. This seemingly straightforward observation shines a spotlight on a connection that has long been neglected by both patent lawyers and legal philosophers.

As someone who has spent significant time in both the silos of legal philosophy and patent law, the lack of attention on this connection strikes me as both incomprehensible and completely unsurprising. I believe that this intersection is fertile soil for some interesting analysis and insights. One of my aims in presenting this paper, in its draft form, is to seek your input as to which of the various issues presented herein seem especially ripe for further exploration.

From the perspective of legal philosophy, and in particular the theory of legal interpretation, patents seem to be off the radar. They don’t fit neatly within the traditional paradigms of constitutional, statutory and contract interpretation that form the bread and butter of most work in legal interpretation. Moreover, patent law is seen as the province of a highly technical subspecialty, accessible mainly by those who also have training in the hard sciences.

From the perspective of patent lawyers, patent law is also seen as the province of a highly technical subspecialty, accessible mainly by those who also have training in hard sciences. Most patent lawyers simply lack exposure to the jurisprudence of legal interpretation.

Although the issues raised by patent claim construction in the United States— particularly since the 1996 landmark Supreme Court decision in Markman v. Westview Instruments—are closely related to issues of legal interpretation with which theorists have long wrangled, there has been surprisingly little effort to bridge the divide. Most scholarship on the issue of patent claim construction comes from within the “silo” of patent law, and makes only superficial (if any) reference to the deeper theoretical issues lurking.

This paper aims to remedy that deficiency. It is an important topic for several reasons. First, it is jurisprudentially interesting.

Second, the absence of a firm theoretical grounding for patent claim construction may be a contributing cause to the ongoing uncertainty about patent claim construction throughout the litigation process, and this uncertainty increases litigation costs and decreases the predictability of litigation. All patent cases in the U.S. are appealed to the same court – the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit reviews patent claim constructions de novo (consistent with the standard of review for issues of legal interpretation), and is well-known to reverse lower-court claim constructions a high percentage of the time. Often, the construction of particular patent claim terms can be case-dispositive. However, claim constructions are not appealable on an interlocutory basis, meaning that even after the terms are construed, the parties must continue to litigate through trial (or other final resolution) in order to seek appellate review of the claim construction. If the Federal Circuit modifies the lower court’s constructions, the case is typically remanded for another trial, an outcome that can be cost-prohibitive.

Third, trial courts are increasingly limiting the number of patent claim terms that can be construed to 10 per case or 10 per patent. This raises a number of questions for litigants: (1) how do you pick which ten terms to dispute? (2) is a “term” the same as a single word, a term of art (which may be several words), short phrases, or even entire claim limitations? And of course, there is the unanswered background question – what happens to claim terms that remain unconstrued? Generally, even if those terms are ambiguous or otherwise need an interpretive gloss, the range of permissible interpretations are not such that choosing one over another would make a difference to the outcome of the case.

The Psychology of Intellectual Property Rights

Gregory N. Mandel Peter J. Liacouras Professor of Law & Associate Dean for Research Temple University, Beasley School of Law [email protected] | Bio | SSRN

Intellectual property rights now represent the dominant value of American companies and have become hotly disputed in policy, legal, and media debates. Despite their popular and legal prevalence, public perceptions and understanding of intellectual property law and rights have barely been explored. This paper presents the results of the first experimental study to investigate the relationship between popular conceptions of what intellectual property rights should be and what intellectual property rights legally are across different types of creative works.

The study utilizes a series of four paired intellectual property scenario experiments given in a between-subjects design to a national sample of over 1700 U.S. adults. The study examines three primary issues: (1) whether and how popular conceptions of intellectual property rights differ from actual intellectual property law; (2) whether and how popular conceptions of intellectual property rights vary across different types of creative achievement (artistic versus inventive creativity); and (3) how the popular understanding of the basis for intellectual property rights compares to standard rationales used in intellectual property policy and legal decision-making.

Results demonstrate (1) that respondents’ views of what should be protected by intellectual property differ substantially from actual law; (2) that respondents’ opinions of what intellectual property rights should be vary considerably, and in an inconsistent manner, between copyright and patent law; and (3) that popular conceptions of the basis for intellectual property law are contrary to commonly accepted bases relied upon in legal and policy decision-making. In addition, regression analyses on participants’ preferences for the strength of intellectual property rights reveals that having lower income, being older, being more educated, and having less experience with intellectual property all correlate with a desire for stronger intellectual property rights. Further, for certain intellectual property rights, women prefer weaker rights to men and minorities prefer stronger rights to non-minorities. These results have significant implications for public discourse and legislation concerning intellectual property law.

The Trademark Experience Machine

Irina D. Manta Visiting Associate Professor of Law, Brooklyn Law School [email protected] | SSRN

A number of scholars have recently critiqued the search-cost model of trademark infringement doctrine and have proposed alternatives driven by, for instance, consumer- decision theories and contractarian understandings of trademarks. While I agree that the search-cost model is problematic in parts, some of the other suggested frameworks suffer from gaps of their own. In particular, these alternative approaches draw up a dichotomy between “pure” experiences of trademarked goods as opposed to “altered” experiences, with the latter representing the mindset of consumers after trademark owners have influenced them via advertising and other devices. This article posits, however, that this binary setup most reminiscent of the decision between the red pill and the blue pill in the movie The Matrix—with one standing for the “truth” about trademarked products and the other a “fake reality” filled with misperceptions about goods—is a false choice. First, no relationship between consumers and brands can completely escape outside influences and, second, we cannot assume that outside influences are necessarily a negative. Indeed, in today’s world, many goods and their brands have become inextricably tied with one another and consumers experience the two together. In that sense, it is not necessarily relevant whether consumers prefer Pepsi to Coke when no labels are attached because we may actually be interested in the brain’s preference as a whole, and labels do enter that holistic perception. A psychology-driven theory of trademarks may also better explain doctrines such as dilution because studies from the worlds of cognition and marketing can help to show how trademarks sometimes elude the old chestnut that intellectual property is nonrivalrous in that consumers’ experience of the original goods can suffer even when search costs do not increase.

RAISING THE STAKES IN PATENT CASES

Anup Malani Lee and Brena Freeman Professor of Law, University of Chicago Law School

Jonathan S. Masur Assistant Professor of Law and Herbert & Marjorie Fried Teaching Scholar University of Chicago Law School [email protected] | Bio

Defendants in patent infringement cases are permitted to defend on the grounds that the infringed upon patent is invalid. This defense, which we call a patent challenge, is intended to correct for the fact that the Patent and Trademark Office may grant patents that are invalid, and invalid patents impose significant economic costs without the offsetting benefit of spurring innovation. Patent challenges are intended to weed out these invalid patents. Unfortunately, patent challenges have flaws. Defendants sometimes succeed in convincing a court to invalidate a truly valid patent. In these cases, challenges reduce the returns to valid patents and discourage valuable innovation. Other times, a court upholds an invalid patent against a challenge. This imposes a tax on genuine innovation and shifts resources toward rent-seeking and away from productive activities. In this paper we ask whether it is possible to reduce the costs patent challenges impose on valid patents without hampering the utility of patent challenges in weeding out invalid patents. If patent trials are inaccurate, it would appear that the most sensible course of action would be to reduce the stakes of those trials. Counter-intuitively, we propose raising the stakes of patent litigation by providing enhanced rewards to victorious patent holders and imposing enhanced penalties on owners of patents that are invalidated at trial. Such measures would actually create greater separation between holders of valid and invalid patents, incentivizing innovation by the former while dissuading the latter from litigating or even asserting their socially worthless property rights.

Collective Patent Pricing

Michael Mattioli Associate Professor of Law, Indiana University Maurer School of Law (Fall 2012) Microsoft Research Fellow, U.C. Berkeley School of Law [email protected] Bio (Berkeley) | Bio (Michigan) | Publications

My work-in-progress examines whether patent licensing collectives stimulate innovation through optimal royalty-sharing. This study probes a question of scholarly and practical concern: Do private collectives preserve innovation incentives more potently than bilateral bargains or compulsory licenses? My hypothesis contains three subparts:

H1, Collectives Are Capable of Including New Patents: A licensing collective cannot preserve the economic incentives of patents without offering prospective patent holders a bite of the apple—i.e., a share of the revenue stream. Therefore, I expect to find that at least some collectives have been structured to incorporate new patents.

H2, Congruence Between Contributions and Distributions: If licensing collectives “tune” royalty distributions better than courts or Congress, we should expect to see a congruence between royalty distributions and the economic value of patents contributed. Unlike inflexible compulsory rates, we should also expect that royalty allocations can change over time.

H3, Members’ Preferences are Represented: If licensing collectives allocate royalties based on the collective will of members, we should expect to find systems that allow members to influence pricing decisions through voting. (Voting, for example, over the inclusion of new patents or changes to existing royalty distributions.)

To test this hypothesis, I gathered and analyzed dozens of private contracts that governed patent licensing collectives between 1856 and 2012. These documents originate from a variety of sources, including historical societies, the National Archives and Records Administration, FOIA requests directed to government agencies, congressional records, and private collections.

These contracts reveal greater variety and complexity than theory alone predicts. The royalty-sharing systems that I have analyzed so far include, for example: expert valuations, tiered voting systems, and “rough and ready” rules. Early results from this study reveal that, in certain settings, crude and imprecise royalty-sharing schemes are preferable to carefully-tuned collective pricing procedures. This insight and others provide a new, empirically-informed view of how collectively-governed institutions can foster innovation in society.

GENERATION C: CHILDHOOD, CODE AND CREATIVITY

Andrea M. Matwyshyn Assistant Professor of Legal Studies, Wharton School, University of Pennsylvania [email protected] | http://www.andreamm.com/

Children today have a special relationship to technology, one which the law is unprepared to address. Four conflicting legal paradigms of childhood are visible among the four bodies of law that control digital spaces – those of contract, copyright, free speech and data privacy/information security – and the tension among these paradigms is becoming increasingly unsustainable. As online business models become progressively more data intensive, the “breathing room” that childhood has been afforded traditionally is eroding. Using the work of Erving Goffman and creativity theorists, this article argues that particularly in digital commercial contexts, a legal paradigm of childhood is needed that simultaneously focuses on childhood privacy and creating a space for creative tinkering leading to entrepreneurship in adulthood. In this vein, this article advocates a two-pronged approach to digital childhood: first, that a strong version of the minority capacity doctrine be adopted for contracts in digital spaces, and, second, that an affirmative defense and exemption of childhood be crafted in copyright law.

Dastar’s Next Stand

Mark P. McKenna Professor of Law, Notre Dame Law School [email protected] | SSRN

A number of recent cases involve trademark or unfair competition claims based on a defendant’s use of aspects of copyrighted or formerly copyrighted works (or at least works claimed to be protected by copyright), including characters, fictional places, and magic tricks. A second group of cases assert infringement of trademarks that originated more conventionally but where the allegedly infringing use is within the content of an expressive work. All of these cases put significant pressure on the boundary between copyright and trademark protection, some of them raising directly the question of whether trademark law can be used to control expressive content.

One might have thought that the Supreme Court’s decision in Dastar v. Twentieth Century Fox would definitively resolve these cases. After all, despite the fact that the Court resolved that case by interpreting the statutory language “origin of goods,” Dastar was animated in large part by the Court’s concern that requiring attribution for creative content would turn trademark law into some “mutant” form of copyright protection. Thus, one might expect Dastar to serve the same role in the trademark/copyright interface as TrafFix plays in policing the trademark/patent conflict – Dastar supplies the rules by which courts determine when parties can use trademark claims to protect works of authorship. And such an expectation would not be entirely unmet: a number of courts have in fact read Dastar to bar false designation of origin claims that were based on the defendant’s use of creative content that originated with the plaintiff. Courts have even relied on Dastar to bar false advertising claims based on claims about the “origin” of content, despite the fact that Dastar itself expressly left the door open to some false advertising claims.

Yet Dastar remains deeply controversial. More problematically, because it involved a reverse passing off claim in which the plaintiff’s content lacked secondary meaning, Dastar’s reach remains somewhat unclear. This essay argues that Dastar should be understood, or at least should be extended, to rule out categorically claims based on the content of a work. And while there may be reasons to be particularly concerned about cases involving alleged confusion resulting from the defendant’s use of the plaintiff’s creative work, I argue that Dastar’s preemptive effect should reach any claim that is based on confusion that allegedly results because of the content of the defendant’s creative work. Courts, in other words, should refuse to infer anything about the source of a work, or of any goods embodying that work, because of its creative content.

TechCollusion

Salil K. Mehra James E. Beasley Professor of Law, Temple University [email protected] | Bio | SSRN

My work-in-progress focuses on the ability of industry incumbents to form joint ventures in an effort to arrest technological progress. More specifically, the basic idea builds off of the notion that, in the context of disruptive technological change, our current understanding of tacit collusion and “plus” factors in antitrust law (especially the idea of a change in existing business practice as a “plus” factor suggesting improper collusion) is both under- and over-inclusive of collusion. This has become particularly clear in the face several of Internet-based challenges to existing industries. The basic insight is that the claimed distinction in case law between normally individually rational and exclusively jointly rational changes in policy erodes when incumbent competitors are faced with a disruptive innovation. The piece discusses collusion after Twombly, and will be relevant to and draw on the Second Circuit Starr v Sony/BMG case (involving the Internet music download joint venture by the major record labels), the DOJ case against Apple and the book publishers concening eBook licensing, and the investigation of the National Association of Realtors in connection with Realtor.com. My proposed solution combines relaxed emphasis on changed business practice as a tacit collusion "plus factor" in the context of a technology or Internet business model shift with tighter antitrust agency scrutiny of proposed Internet joint ventures by incumbents due to the incentive to use such JVs to inhibit more innovative, incumbent-challenging Internet- based business models.

USING FEE SHIFTING TO PROMOTE FAIR USE AND FAIR LICENSING

Peter S. Menell Robert L. Bridges Professor of Law & Director, Berkeley Center for Law & Technology University of California at Berkeley School of Law [email protected] | Bio | SSRN

Ben Depoorter Professor of Law, University of California Hastings College of the Law [email protected] | Bio | SSRN

The fair use doctrine seeks to facilitate socially optimal uses of copyrighted material. As a practical matter, however, cumulative creators, such as filmmakers and musicians, are often reluctant to rely on the fair use doctrine because of its inherent uncertainty, the potentially harsh remedies for copyright infringement, and the practical inability to obtain effective preclearance of rights through administrative or judicial channels. They can try to seek a license from the owner of copyright in the underlying work, but that owner has no obligation under existing law to even respond to the cumulative creator’s inquiry. Thus, a familiar refrain in professional creative communities is “if in doubt, leave it out.”

This article proposes a novel mechanism that would afford a limited, cost-effective process for pre-clearing works, promote fair negotiation over cumulative uses of copyrighted works, and reduce the exposure of cumulative creators from relying on the fair use doctrine in the vast gray area that exists. Under our mechanism, which bears some resemblance to Fed. R. Civ. Pro. 68, a cumulative creator has authority to make a formal offer of settlement to use copyrighted material for a project. If the copyright owner does not respond to the offer, the cumulative creator would be permitted to use the work provisionally by paying the settlement amount into escrow. If the copyright owner rejects the proposed license fee and sues for infringement, the copyright owner will bear the cumulative creator’s litigation costs if (1) the court determines that the use of the material qualifies as fair use or (2) in cases where the court determines that the fair use doctrine did not excuse the use but would not enjoin the use under the eBay v. Mercexchange equitable balancing test, where the cumulative creator’s offer of settlement (the proposed license fee) exceeds the amount of damages that the court determines to be appropriate. In the former case, the escrow amount is returned to the cumulative creator. In the latter case, the copyright owner receives the infringement award from the escrow account and the remainder returns to the cumulative creator. Finally, if the court finds against fair use and that the proposed license fee is below the liability award or if the court enjoins the cumulative work, then the cumulative creator would have to pay the full liability costs and the court would shift attorney fees as it deems appropriate.

Our fair use fee-shifting proposal encourages copyright owners to take settlement offers seriously and negotiate around the fair use doctrine’s inherent uncertainties. In so doing, this mechanism protects the reliance costs of cumulative creators, reduces transaction costs, and discourages hold-out behavior. Overall, our mechanism should enrich cultural production by increasing the use of copyrighted content in follow-on works while fostering markets for cumulative creativity and providing fair compensation to copyright owners of underlying works. Conceptual Separability and the Copyright/Patent Boundary

Viva R. Moffat Associate Professor, University of Denver Sturm College of Law [email protected] | Bio | SSRN

“Conceptual separability” in copyright law is the doctrine that seeks to draw a distinction between uncopyrightable works of industrial design and copyrightable works of applied art. Congress has made clear that the former should not receive copyright protection but that the latter should. Unfortunately, the courts have been unable to come up with a workable or satisfying test for drawing this distinction. As a result, the tests vary between (and even within) the circuits, and the outcomes are unpredictable. Academics and practitioners have long complained about the doctrine – without arriving at a satisfactory solution. In my view, Congressional intent in this regard is not being carried out: many works of industrial design do, in fact, receive copyright protection. And this is significant because industrial design falls squarely within the patent realm, if it is to be protected at all. Congress and the courts have made clear that inventive works, or useful articles, might receive patent protection, but that they should not be subject to copyright. If copyright protection is available, or even merely possible, any rational inventor would choose copyright over patent: it is easier to obtain and lasts much, much longer. Thus the line between copyright law and patent law should be quite clear. But in the case of some industrial design, it is most certainly not. In the article I will propose a simple rule: in the close cases – that is, when it is difficult to determine whether the protectable aesthetic elements are conceptually separable from the unprotectable functional elements – the courts should employ a default rule of no protection. This would be consistent with Congressional policy and with the notion that useful articles do not properly belong in the copyright scheme.

“Overbreadth” As Oversimplification

Emily Michiko Morris Associate Professor and Dean’s Fellow Indiana University Robert H. McKinney School of Law, Indianapolis, Indiana [email protected]

Courts and commentators alike often cite concerns about patent scope overbreadth, but the concept of patent “overbreadth” itself seems overly broad. Everything in patent law is arguably about patent overbreadth, to some extent, although what we mean by “overbreadth” in any given context obviously will depend on the context.

In many instances of reputed “overbreadth,” the overarching concern seems quite understandably to be about granting patents that are broader in scope than the patentee “deserves.” This concern is most easily understood in cases of anticipation or obviousness, where the patentee has claimed what has effectively already been invented by others. A similar argument can perhaps be made where enablement, claim indefiniteness, or even an acceptable written description – is lacking, suggesting that the patentee has not truly invented what she has claimed.

With regard to other doctrines, particularly patentable subject matter, the overbreadth concern seems merely a vague proxy for other concerns. As the Federal Circuit itself stated in Bilski, patentable subject matter concerns about preempting a field are merely a symptom, not the disease. For example, if overbreadth were truly to motivating concern, “token” efforts to narrow patent scope, such as field-of-use restrictions, post- solution activity, or Beauregard claims, would be acceptable and even desirable. Similarly, patents on truly pioneering inventions would be treated like “abstract ideas” and barred from patentability because both will block their later downstream applications. In these latter instances, then, patent scope “overbreadth” seems not only to mean something different but also to advert to different dangers than in the former instances of “just desert.” Substantial Similarity and Psychological Similarity: Perfect Strangers

David Morrison Lecturer in Law; Executive Director, The Indie Film Clinic Benjamin N. Cardozo School of Law [email protected]

Questions of similarity and dissimilarity are central to both the study and practice of intellectual property law. Trademark law’s basic consideration in determinations of infringement is consumer confusion. Similarity of marks is a basic measure of the likelihood of confusion and the concept of confusion itself – the misidentification of one object with another – is, in some ways, a very basic measure of the psychological concept of similarity. Copyright law explicitly uses similarity (and its extent) as the benchmark for infringement.

Although copyright law protects against unauthorized copying that wholly reproduces an original work, it goes significantly further than absolute reproduction and extends to the copying of protected expression that renders a new work substantially similar to the original. In most questions involving substantial similarity, and, in fact, if the test is to have any real reach and significance, the question of copying moves further from cases of pure identity (through absolute reproduction of a copyrighted work) toward works that are similar to some greater or lesser extent in their material attributes or, in certain cases, their structure and arrangement: this is true whether the basis of the complaint alleging infringement is that the copying violates the right of reproduction or the right to prepare derivative works. In other words, the test moves from protection of the whole as the whole (absolute reproduction), to protection of the whole through its features or attributes. It is this movement that describes the boundary of protection for a particular work. Although the integrity of the test for substantial similarity ultimately lies in its diagnostic capacity in cases where something less than the total work has been copied, current doctrine fails to provide a full and satisfying explanation of the underlying concept of similarity and its components, considerations, and distinctions.

Similarity is also fundamental in the study of cognitive psychology and a large body of research in that field suggests that judgments of similarity depend more upon the existence and extent of common or disparate organization (relational similarity), than the existence and extent of common or disparate features (attributional similarity). Though works exhibiting originality in their structure and arrangement are copyrightable, the kinds of structural characteristics that are typical of relational similarity are ordinarily more idea than expression. Nevertheless, works often exhibit relational similarity of a different type which is highly predictive of perceived similarity and which is revealed only when common higher- order relationships are explored. These similarities and differences are much more likely to affect individual judgments of similarity than common features with little to no analogical relationship.

Because copyright law protects against unauthorized reproductions and derivative works that are substantially similar to the original work, it would be useful for the doctrine to take into account the different ways in which works exhibit similarity and more clearly distinguish among different aspects of perceived similarity. The goal of this article will be to identify some of those distinctions and consider whether the current doctrine does or should account for them. David Morrison is Executive Director of The Indie Film Clinic and a Lecturer in Law at the Benjamin N. Cardozo School of Law. He received a B.S. in economics from the University of Alabama, a J.D. From the William & Mary School of Law, and an LL.M. in Intellectual Property Law from Cardozo. As Cardozo's IP & Information Law Program's IP Fellow, he helped to develop and create The Indie Film Clinic – the first clinical program of its kind in New York City – which provides pro bono transactional legal services to independent and documentary filmmakers. Scaling the Patent System

Christina Mulligan Postdoctoral Associate in Law, Information Society Project, Yale Law School [email protected] | Bio l SSRN l Website

Timothy B. Lee Adjunct Scholar, Cato Institute

Why do firms in some industries ignore patents when developing new products? This paper posits a simple but novel answer to this long-puzzling question: firms ignore patents because they are unable to discover the patents their activities might infringe. The costs of finding relevant patents, which we call discovery costs, are prohibitively high.

Not all industries face high patent discovery costs. Chemical patents are "indexable," meaning that relevant patents can be efficiently retrieved by chemical formula. As a result, discovery costs in the chemical and pharmaceutical industries are low, and inadvertent infringement by firms in these industries is rare. But many other patent categories are not indexable, and in some cases that makes avoiding infringement practically impossible. In software, for example, patent clearance by all firms would require many times more hours of legal research than all patent lawyers in the United States can bill in a year. The result has been an explosion of patent litigation.

This paper attacks two core premises of patent law — that parties are always able to respect each other’s patent rights, and that firms should be punished for infringement even if they could not have avoided it. It concludes with several suggestions for how to change the patent system to alleviate the problems created by non-indexable patents.

This paper is forthcoming in the New York University Annual Survey of American Law. Divisibility, Ownership, and the Exclusive Copyright License

Christopher Newman Assistant Professor, George Mason University School of Law [email protected] | Bio l SSRN

Prior to the 1976 Copyright Act, a longstanding line of cases held as a matter of federal IP policy that patent and copyright licenses “are personal to the licensee and not assignable unless expressly made so in the agreement.”1 Many contend that because it includes exclusive licenses among “transfers of copyright ownership,” the 1976 Act has to be read as overturning this rule. The Ninth Circuit, on the other hand, held in Gardner v. Nike that the 1976 Act did not abrogate the preexisting presumption of nonassignability for exclusive copyright licenses, but only meant to confer standing to sue on exclusive licensees by affording them “all of the protection and remedies accorded to the copyright owner.”2

Gardner has been almost uniformly criticized by treatise writers and other commentators. Much of this criticism rests on an assumption, asserted as though it were axiomatic, that the term “transfer of ownership” as used in section 101 must be read to mean a complete transfer of title identical in all functional respects to an assignment.3 This article questions that assumption, looking at the understanding of “ownership” and the distinction between assignments and licenses that had developed in both patent and copyright caselaw prior to the 1976 Act, as well as the purpose and implications of the move toward copyright divisibility in the 1976 Act. My goal is to provide a persuasive analysis of the term “ownership” as used in the 1976 Act, which includes identifying which powers of title are and are not essential to permit an interest to be characterized in this way.

I do not yet know precisely what conclusions I will reach in the course of completing the article, but I start with the intuition that it is possible to have various “ownership” interests that differ in significant ways, which means that the simple equation of “exclusive license” to “assignment” to “title” is unconvincing as either a textual or a conceptual matter:

• Under the pre-1976 caselaw it was possible to effect a transfer that was construed as granting “ownership” for the purpose of conferring standing to sue, even though the transferor retained certain aspects of title.

• Section 101 includes a “mortgage” as well as an “exclusive license” among

1 Unarco Industries v. Kelley Co., 465 F.2d 1303, 1307 (7th Cir. 1972). 2 Gardner v. Nike, 279 F.3d 774 (9th Cir. 2002) (holding that rule applies to copyright licenses despite changes in 1976 Copyright Act). 3 See, e.g., Nimmer, supra note Error! Bookmark not defined., at § 10.02[4][A] (“The [exclusive licensee] having acquired "title" or ownership of the rights conveyed, may reconvey them absent contractual restrictions.”). Note that Nimmer places “title” but not “ownership” in quotation marks, even though it is the latter and not the former term that appears in the relevant statutory provision. “transfers of ownership.” Mortgages are clearly ownership interests, but they are not equivalent to “title,” nor does anyone claim that the statute was intended to obliterate all distinctions between “mortgages” and “assignments.”

• Had the intent really been to permit transfer of standing to sue only in conjunction with transfer of all aspects of title concerning the exclusive right in question, this would have been fully achieved by section 201(d)(2) alone. There was no need to take the additional unorthodox step of including an “exclusive license” within the statutory definition of “transfer of copyright ownership.”

The article will also grapple with a broader theoretical issue: To what extent is divisibility of ownership to various uses of the same property (whether in traditional or intellectual property) compatible with the conception of property as an in rem right “to a thing” as opposed to that of a “bundle of rights.”

TRADEMARK APOLOGETIC JUSTICE: China’s Three Laws on Trademark Reputation

Xuan-Thao Nguyen Professor of Law, SMU Dedman School of Law [email protected]

Will Apple be ordered to apologize for its unauthorized use of the trademark “iPad” in Shenzhen, China? Will Apple face massive confiscation of infringing “iPad” products in China?

Appropriation of another’s name and reputation without authorization has long been recognized as an injury. Trademark law does not tolerate usurpation of the reputation embodied in a trademark or name that misleads or confuses the public. The injured person or business can seek remedies in the form of injunctive relief and monetary damages, which are rooted in property interest theory and damages in torts liability rules, respectively. Even if the plaintiff was successful in obtaining both injunctive relief and monetary damages, the remedies received do not truly address the harm to trademark reputation because they do not consider that the public was also harmed by the defendant’s misleading conduct. What remedy may be appropriate in addition to injunction and monetary damages? What remedy may be appropriate that would take the harm to done to both the public and the plaintiff into consideration? The answer lies in China’s jurisprudence on trademark reputation and apologetic justice. It is rather an ironic assertion given that most of the attention to China has been negative, focusing overwhelmingly on the piracy of U.S. intellectual property rights.

China has continued to surprise the international community in its efforts to transform the country from being the factory of the world into the global innovation center. While foreigners look at China as a piracy epicenter, China has unleashed its power to develop a new trademark jurisprudence through statutes, judicial directives from the Supreme People’s Court, and written decisions published by the lower people’s courts. China’s trademark jurisprudence treats injuries to trademark reputation as harmful to both the plaintiff and society. Accordingly, Chinese law gives the court discretion to order the defendant to make a public apology in a newspaper or trade journal in cases where the defendant intentionally or maliciously harmed the plaintiff’s reputation by misleading the public through unauthorized use of the plaintiff’s trademark or name. In a public apology, the defendant admits to the infringing conduct, acknowledges the trademarks or names owned by the plaintiff, apologizes for the wrongdoing, and promises not to engage in the unauthorized use of the trademark or name in the future. Generally, the content of a public apology must be approved by the court. If the defendant fails to make the public apology in a timely manner, the court may authorize the plaintiff to publish a public apology in the defendant’s name and charge the expenses to the defendant. A public apology is not in lieu of but in addition to injunction, damages and litigation cost remedies, as China has already fully embraced property and liability rules by directing the defendant to cease the infringing conduct and pay monetary damages.

A closer look at China’s trademark jurisprudence reveals a robust and complex development of these laws and the increasingly important judicial role concerning trademark reputation harm. Unlike the United States wherein the comprehensive trademark statutes provide all the answers relating to the unauthorized use of a trademark or name, China has three separate bodies of laws: Trademark Law, Unfair Competition Law and Civil Law. When pieced together, these laws present a rich body of law, including trademark reputation law. China’s three laws cannot be analyzed separately and in isolation from the Supreme People Court’s judicial directives. Judicial directives –official interpretations—of these three laws, in combination with lower courts’ published opinions applying the three laws, show the making of a dynamic trademark jurisprudence, which addresses the harm done to trademark reputation caused by the defendant’s willful conduct misleading the public. A public apology as a remedy is evidence of China’s trademark jurisprudence’s consideration for the public; the public has a part in the remedy of the harm because the public has been misled by the defendant’s conduct. Thus, justice has been achieved for the plaintiff and the public.

China’s trademark jurisprudence and apologetic justice forces US scholars and policymakers to contemplate Judge Learned Hand’s keen observation about trademark reputation and focus on the question of remedy. This does not mean that the United States will import Chinese trademark jurisprudence and apologetic justice. However, in the age of globalization and the rise of China’s Century, knowledge of China’s legal system is indispensable. After all, contrary to misunderstandings about China, the country is no stranger to trademark concepts. Names and symbols, along with their associated reputations, are an integral part of Chinese social fabric.

The article will proceed as follows. Part I discusses the three bodies of law constituting China’s trademark jurisprudence by tracing the development of Trademark Law, Anti- Unfair Competition Law and Civil Law. All of these laws contain relevant provisions pertaining to trademark reputation and remedies, including injunction, damages and public apology to eliminate any bad effects. As China Supreme People’s Court has a significant role in shaping trademark jurisprudence and apologetic justice, Part I also analyzes judicial directives that provide guidance and instructions to the lower courts in addressing trademark reputation remedies.

An analysis of only statutes and judicial directives, however, does not provide an accurate understanding of China’s vibrant development of trademark jurisprudence on reputation and apologetic justice. Part II studies judicial decisions rendered by the Chinese courts in trademark reputation cases. Judicial decisions from different levels of the people’s court explain the facts, describe the injuries, apply the law and provide the reasoning for appropriate remedies. If the finding establishes that the infringer did not willfully or maliciously use the trademark or name to mislead the public, the courts will not order a public apology. In this type of case, only injunction and damages are warranted. In other words, if the public has not been harmed, there is no need to have the public involved in healing through reading apologies in newspapers or trade publications.

What does a public apology entail? What is the content of a public apology in a trademark case? Part III provides several actual apologies published by individual and entity infringers in newspapers and trade journals. They are illuminating examples, as the infringers, in writing and in the public forum, acknowledge the plaintiff’s exclusive right in a trademark or name, admit the wrongdoing, apologize for the conduct, and promise not to commit infringing conduct in the future. These newspapers and trade journals are available in print and online for the public to read.

Learning how China’s trademark jurisprudence treats reputation and develops apologetic justice can serve as an opportunity to reflect on Judge Learned Hand’s astute observation on injury to trademark reputation. Part IV inspects U.S. law and its treatment of injury to trademark reputation. Compared to China wherein injunction and damages are routinely granted to the prevailing plaintiff, U.S. law does not authorize the courts to grant an automatic injunction upon finding that the plaintiff has succeeded on the merits. Damages are difficult to prove in U.S. trademark cases. In addition, only 2% of U.S. trademark cases advance to trial and only some of those cases receive damage awards. Most significantly, U.S. law does not recognize harm to the public. The courts only provide, if any, injunctive relief and damages. Harm to trademark reputation, particularly in cases wherein the infringer maliciously or willfully misleads the public, is harmful to both the plaintiff and the public. China’s trademark jurisprudence and apologetic justice certainly offer a model for the United States to contemplate.

Whether the United States will consider apologetic justice in trademark reputation cases is a question for further debate. At the very least U.S. businesses should not be surprised that the plaintiff in a trademark infringement action, which was filed by a Chinese company, Proview Technology, against Apple for the use of the name “iPad,” is demanding an apology in addition to injunction and damages. Knowledge of China’s jurisprudence is essential in our globally competitive and fast-changing world today.

Draft Copy TRADEMARK APOLOGETIC JUSTICE: China’s Three Laws on Trademark Reputation

2012 Copyright by Professor Xuan-Thao Nguyen*

“[A] reputation, like a face, is the symbol of its possessor and creator and another can use it only as a mask.”1 Judge Learned Hand.

“The quality of a trademark owner's reputation should lie within his own control.”2

INTRODUCTION

Will Apple be ordered to apologize for its unauthorized use of the trademark “iPad” in Shenzhen, China?3 Will Apple face massive confiscation of infringing “iPad” products in China?4

Appropriation of another’s name and reputation without authorization has long been recognized as an injury.5 Trademark law does not tolerate

*Professor of Law, SMU Dedman School of Law; Former IP Associate, Fried Frank Harris Shriver & Jacobson (NYC) and Pryor Cashman Sherman & Flynn (NYC). Many thanks Pei-Chih “Peggy” Ho, Class of 2011, SMU Dedman School of Law and Sara Alyn Horner, Class of 2012 for their superb assistance. A version of the Article was presented at Washington University School of Law in January 2012. Special thanks to Erik Darwin Hille and Khai-Leif Nguyen-Hille for their love, patience and support. 1 Yale Elec. Corp. v. Robertson, 26 F.2d 972, 974 (2d Cir. 1928). Judge Learned Hand’s phrase has been repeatedly quoted by subsequent courts. See generally Commc’ns Satellite Corp. v. Comcet, Inc., 429 F.2d 1245, 1250 (3d Cir. 1970); Holiday Inns of Am., Inc. v. B & B Corp., 409 F.2d 614, 616 (1st Cir 1969); Polaroid Corp. v. Polaraid, Inc., 319 F.2d 830 (4th Cir 1963); Fleischmann Distilling Corp. v. Maier Brewing Co., 314 F.2d 149, 159 n.14A (9th 1963); Safeway Stores, Inc. v. Safeway Props., Inc., 307 F.2d 495, 498 (2d Cir. 1962); Ambassador E., Inc. v. Orsatti, Inc., 257 F.2d 79, 82 (3d Cir. 1958). 2 Professional Golfers Ass'n of Am. v. Bankers Life & Cas. Co., 514 F.2d 665, 671 (11th Cir. 1975). 3 See Liau Yun Qing, iPads Taken Off Shelves in China Over Trademark Dispute, ZDNETASIA (Feb. 14, 2012), http://www.zdnetasia.com/reports-ipads-taken- off-shelves-in-china-over-trademark-dispute-62303847.htm.; Francis Bea, Apple Trademark Battle Threatens to Halt iPad Sales in China, DIGITAL TRENDS (Feb. 7, 2012), http://www.digitaltrends.com/international/apple-trademark-battle-threatens-to- halt-ipad-sales-in-china/ 4 See Francis Bea, Chinese Officials Raid retailers, Confiscate iPads Following Trademark Ruling Against Apple, DIGITAL TRENDS (Feb. 13, 2012), http://news.yahoo.com/chinese-officials-raid-retailers-confiscate-ipads-following- trademark-213014316.html. 5 Taussig v. Wellington Fund, Inc., 313 F.2d 472, 478 (3d Cir. 1963) (“[A]ppropriation of another's name and reputation ‘is an injury, even though the borrower does not tarnish it, or divert any sales by its use; for a reputation, like a face, is the symbol of its possessor and creator, and another can use it only as a mask. And so it 1 Nguyen usurpation of the reputation embodied in a trademark or name that misleads or confuses the public.6 The injured person or business can seek remedies in the form of injunctive relief7 and monetary damages,8 which are rooted in property interest theory9 and damages in torts liability rules,10 respectively. Even if the plaintiff was successful in obtaining both injunctive relief and monetary damages, the remedies received do not truly address the harm to trademark reputation because they do not consider that

has come to be recognized that, unless the borrower's use is so foreign to the owner's as to insure against any identification of the two, it is unlawful.’ We think it is clear from what has already been said that in this case ‘the borrower's use is (not) so foreign to the owner's as to insure against any identification of the two.’” (quoting Yale Elec. Corp. v. Robertson, 26 F.2d 972, 974 (2d Cir. 1928))). 6 Ga. Pac. Consumer Prods., LP v. Von Drehle Corp., 618 F.3d 441, 455 (4th Cir. 2010) (holding that the plaintiff G-P “has proffered sufficient evidence for a reasonable jury to find that the likelihood of confusion among such restroom visitors will adversely affect G–P's reputation among its laborers, lenders, investors, or other groups with whom G–P interacts” and recognizing that “without the ability to control the quality of the toweling used in Dispensers, G–P is subject to the risk of injury to the reputation of the G–P Marks.”). See generally 15 U.S.C. § 1125(a) (West 2012) (unfair competition against use of words or symbols that is likely to cause consumer confusion as to source). 7 Cytosport, Inc. v. Vital Pharm., Inc., 348 F.App’x. 288 (9th Cir. 2009) (affirming injunctive relief granted by the district court upon a finding that the plaintiff will likely to succeed on the merit and suffer irreparable harm in absence of preliminary injunction); Opticians Ass'n of Am. v. Indep. Opticians of Am., 920 F.2d 187, 196 (3d Cir. 1990) (holding that lack of control over one’s trademark “creates the potential for damage to ... reputation [, which] constitutes irreparable injury for the purpose of granting a preliminary injunction in a trademark case.”); U.S. Polo Ass'n, Inc. v. PRL USA Holdings, Inc., 800 F. Supp. 2d 515 (S.D.N.Y. 2011) (granting permanent injunction that prohibits the corporation infringer from using the “U.S. POLO ASSN.” name in conjunction with double horsemen mark in men's fragrances). 8 See Ramada Inns v. Gradsden Motel Co., 804 F.2d 1562, 1565 (11th Cir. 1986) (affirming the lower court’s ruling on the use of lost royalties to determine the actual damages incurred by the plaintiff from unauthorized use by a former franchisee). 9 Friend v. H. A. Friend & Co., 416 F.2d 526, 533 (1969) (stating that trademark right “is in the nature of a property right based on common law” and affirming the district court's granting of an injunction against” the defendant’s use of the mark ‘Banner’); Champions Golf Club, Inc. v. Sunrise Land Corp., 846 F. Supp. 742,757 (W.D. Ark 1994) (holding that the plaintiff is “entitled to an injunction in this case to protect its valuable property right and to terminate or prevent irreparable harm to that right”). 10 Common –law torts for trademark infringement has been codified in federal trademark and unfair competition law or the Lanham Act. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 785 (1992) (observing that the federal trademark statutes have codified common law torts for trademark infringement). “The general proof and measure of damages in a trademark action is governed by the law of damages of tort actions.” Broan Mfg. Co., Inc. v. Assoc. Distrib., Inc., 923 F.2d 1232, 1235 (6th Cir. 1991). “Under general tort principles ... the infringer/tortfeasor is liable for all injuries caused to plaintiff by the wrongful act, whether or not actually anticipated or contemplated by the defendant when it performed the acts of infringement.” Id. 2 Draft Copy the public was also harmed by the defendant’s misleading conduct.11 What remedy may be appropriate in addition to injunction and monetary damages? What remedy may be appropriate that would take the harm to done to both the public and the plaintiff into consideration? The answer lies in China’s jurisprudence on trademark reputation and apologetic justice.12 It is rather an ironic assertion given that most of the attention to

11 Vornado Air Circulation Sys, Inc. v. Duracraft Corp., 58 F.3d 1498 , 1508 (10th Cir. 1995) (affirming that the “core concepts of trademark protection are that consumers not be confused, misled, or deceived as to whose product they are buying, that sellers' goodwill—or investment in their reputation for quality—be protected, and that competition thereby be enhanced”). The remedies, however, do not concern the public. For instance, a jury in a trademark case is instructed to award damages to the plaintiff if there is approximate cause between the defendant’s conduct and the plaintiff’s injury to reputation or goodwill. See generally Aronowitz v. Health-Chem Corp., 513 F.3d 1229, 1241 (11th Cir. 2008) (affirming the jury verdict of $25,000 in damages in a trademark case where the jury was instructed, “damages sustained by the plaintiff” include “all elements of injury to the business of the trademark owner proximately resulting from the infringer's wrongful acts,” such as the costs of corrective advertising or injury to business reputation or goodwill). 12 This article addresses trademark reputation under China’s trademark jurisprudence. For normative reputation law under defamation and libel, see Article 101 of the General Principles of Civil Law of the People’s Republic of China, which provides, “Citizens and legal persons shall enjoy the right of reputation. The personality of citizens shall be protected by law, and the use of insults, libel or other means to damage the reputation of citizens or legal persons shall be prohibited.” General Principles of the Civil Law of the People’s Republic of China (promulgated by the Nat’l People’s Cong., Apr. 12, 1986, effective Jan. 1, 1987) (China), available at http://www.lawinfochina.com/display.aspx?lib=law&id=1165. Article 140 of the Opinions of the Supreme People’s Court on Several Issues concerning the Implementation of the General Principles of Civil Law of the People’s Republic of China (for trial implementation) provides that: Where anyone spreads the privacy of another person in writing or verbally, fabricates facts to overtly smear the personality of another person, or damages another person’s reputation by ways such as insulting or slandering, if there are certain consequences, it shall be determined as an infringement upon a citizen’s right of reputation. Where anyone derogates from or slanders the reputation of a legal person in writing or verbally, causing damage to the legal person, it shall be determined as an infringement upon the right of reputation of the legal person. Opinions of the Sup. People’s Ct. on Several Issues concerning the Implementation of the Civil Law of the People’s Republic of China (promulgated by the Sup. People’s Ct., Jan. 26, 1988, effective Jan. 26, 1998) (China), available at http://www.lawinfochina.com/display.aspx?lib=law&id=3700 [hereinafter Opinions of the Sup. People’s Ct. on Civil Law];see also Benjamin L. Liebman, Innovation Through Intimidation: An Empirical Account of Defamation Litigation in China, 47 HARV. INT’L L.J. 33 (2006) (analyzing the types of defamation litigation in China as a case study of the complex and evolving roles of courts, media and government in Chinese civil litigation). 3 Nguyen China has been negative, focusing overwhelmingly on the piracy of U.S. intellectual property rights.13

China has continued to surprise the international community in its efforts to transform the country from being the factory of the world into the global innovation center.14 While foreigners look at China as a piracy epicenter, China has unleashed its power to develop a new trademark jurisprudence through statutes, judicial directives from the Supreme People’s Court, and written decisions published by the lower people’s courts.15 China’s trademark jurisprudence treats injuries to trademark reputation as harmful to both the plaintiff and society. Accordingly, Chinese law gives the court discretion to order the defendant to make a public apology in a newspaper or trade journal in cases where the defendant intentionally or maliciously harmed the plaintiff’s reputation by misleading the public through unauthorized use of the plaintiff’s trademark or name.16 In a public apology, the defendant admits to the infringing conduct, acknowledges the trademarks or names owned by the plaintiff, apologizes for the wrongdoing, and promises not to engage in the unauthorized use of the trademark or name in the future. 17 Generally, the content of a public apology must be approved by the court. If the defendant fails to make the public apology in a timely manner, the court may authorize the plaintiff to publish a public apology in the defendant’s name and charge the expenses to the defendant.18 A public apology is not in lieu of but in addition to injunction, damages and litigation cost remedies, as China has already fully embraced property and liability rules

13 See generally Kenneth L. Port, A Case Against the ACTA, 33 CARDOZO L. REV. 1131, 1167 n. 169 (2012) (noting that reports have portrayed China as the main culprit for piracy and arguing that the data on piracy is exaggerated ); Geoffrey Scott, A Protocol for Evaluating Changing Global Attitudes Toward Innovation and Intellectual Property Regimes, 32 U. PA. J. INT’L. L. 1165, 1264-67 (2011) (evaluating China’s piracy problem). 14 Anil K. Gupta & Haiyan Wang, China as an Innovation Center? Not So Fast, WALL ST. J., July 28, 2011, http://online.wsj.com/article/SB10001424053111903591104576469670146238648.html (“China's R&D expenditure increased to 1.5% of GDP in 2010 from 1.1% in 2002, and should reach 2.5% by 2020. Its share of the world's total R&D expenditure grew to 12.3% in 2010 from 5.0% in 2002, placing it second only to the U.S., whose share remained steady at 34-35%. According to UNESCO, China now employs more people in science and technology research than any other country.”). China, however, faces many challenges. Id. 15 See infra Part I. 16 See infra Parts II-III. 17 See infra Parts II-III. 18 See infra Parts II-III. 4 Draft Copy by directing the defendant to cease the infringing conduct and pay monetary damages.19

A closer look at China’s trademark jurisprudence reveals a robust and complex development of these laws and the increasingly important judicial role concerning trademark reputation harm.20 Unlike the United States wherein the comprehensive trademark statutes provide all the answers relating to the unauthorized use of a trademark or name,21 China has three separate bodies of laws: Trademark Law, Unfair Competition Law and Civil Law. 22 When pieced together, these laws present a rich body of law, including trademark reputation law. China’s three laws cannot be analyzed separately and in isolation from the Supreme People Court’s judicial directives. Judicial directives –official interpretations—of these three laws, in combination with lower courts’ published opinions applying the three laws, show the making of a dynamic trademark jurisprudence, which addresses the harm done to trademark reputation caused by the defendant’s willful conduct misleading the public.23 A public apology as a remedy is evidence of China’s trademark jurisprudence’s consideration for the public; the public has a part in the remedy of the harm because the public has been misled by the defendant’s conduct. Thus, justice has been achieved for the plaintiff and the public.

19 See infra Parts II-III. 20 Experts on Chinese Intellectual Property laws, specifically trademark law often only focus on one body of law, China’s Trademark Law, and thus provide an incomplete account of China’s trademark jurisprudence. See generally Patricia Marquez, Trademark: A Comparative Look at China and the United States, 14 TOURO INT’L L. REV. 334, 336-37 (2011) (“China employs a first to file system, it does not usually recognize unregistered marks.”); Anne M. Wall, Intellectual Property Protection in China: Enforcing Trademark Rights, 17 MARQ. INTELL. PROP. L. REV. 341, 372 (2006) (noting that because Chinese law follows “the first-to-file principle,” foreign trademark owners have been caught by surprise as they enter China’s market without prior registration of trademark rights; and cannot rectify the problem of already existing registration of the trademark for the relevant goods). 21 See generally 15 U.S.C. §1051 (West 2012). 22 See infra Part I. 23 See infra Part I. 24 st See Edward Friedman, Will 21 Century Be China’s?, THE DIPLOMAT, (Nov. 19, 2011), http://the-diplomat.com/china-power/2011/11/19/will-21st-century-be- china%E2%80%99s/ (observing that the prediction that the 21st century will belong to 5 Nguyen legal system is indispensable. After all, contrary to misunderstandings about China,25 the country is no stranger to trademark concepts.26 Names and symbols, along with their associated reputations, are an integral part of Chinese social fabric.27

The article will proceed as follows. Part I discusses the three bodies of law constituting China’s trademark jurisprudence by tracing the development of Trademark Law, Anti-Unfair Competition Law and Civil Law. All of these laws contain relevant provisions pertaining to trademark reputation and remedies, including injunction, damages and public apology to eliminate any bad effects. As China Supreme People’s Court has a significant role in shaping trademark jurisprudence and apologetic justice, Part I also analyzes judicial directives that provide guidance and instructions to the lower courts in addressing trademark reputation remedies.

China was “premised on the idea that the 20th century was the American century and that U.S. predominance would be replaced by that of China”). 25 Dalila Hoover, Coercion Will Not Protect Trademark Owners in China, But an Understanding of China’s Culture Will: A Lesson the United States Has to Learn, 15 MARQ. INTELL. PROP. L. REV. 325, 343-45 (2011) (blaming Chinese cultural mores for the lack of trademark protection and enforcement). 26 Ke Shao, Look at My Sign! –Trademarks in China from Antiquity to the Early Modern Times, 87 J. PAT. & TRADEMARK OFF. SOC’Y 654 (2005) (demonstrating that the trademark concept is not foreign in China by reconstructing the evolving trademark concept from the perspective of “self” and individual rights, explaining the social functions of trademarks, and analyzing trademark regulations and protection in pre- modern imperial era). 27 ODED SHENKAR, THE CHINESE CENTURY: THE RISING CHINESE ECONOMY AND ITS IMPACT ON THE GLOBAL ECONOMY, THE BALANCE OF POWER AND YOUR JOB 157-58 (2005) (observing that “[t]he Chinese themselves are . . . very brand conscious, a legacy of Confucian hierarchy and of their imperial past where rank was prominently displayed on bureaucrats' clothing,” and therefore the recent effort of building and cultivating Chinese brands “fits with the government's strategy of consolidating strategic industries . . . to create national champions that can hold their own in global markets and . . . to restore its imperial glory”). 6 Draft Copy public has not been harmed, there is no need to have the public involved in healing through reading apologies in newspapers or trade publications.

28 Rick Burgess, Apple Sued for $1.6 Billion for Using “iPad” in China, Apology Requested, TECHSPOT: TECH. NEWS AND ANALYSIS (Feb. 9, 2012), http://www.techspot.com/news/47381-apple-sued-for-16-billion-for-using-ipad-in-china- apology-requested.html (reporting that plaintiff, owner of the registered trademark “IPAD” since 2000, brought trademark infringement suit against Apple; the lower people’s court in Shenzhen has ruled in favor of the plaintiff and Apple has appealed the case to the Higher Court). For more information on the case, see also Dave Smith, Is iPad 3 in Jeopardy? Apple Could Lose $1.6B in China Trademark Lawsuit, INT’L BUS. 7 Nguyen Knowledge of China’s jurisprudence is essential in our globally competitive and fast-changing world today.29

I. THREE LAWS ON TRADEMARK REPUTATION

China is a civil law country wherein statutory laws and regulations are the authoritative body of law;30 China does not follow precedents based in court decisions as does in the United States.31 This does not mean courts in China do not participate in the development of law. China Supreme People’s Court plays a very significant role in shaping jurisprudence.32 For example, China Supreme People’s Court provides Interpretations of China’s Trademark Law33 and the Court’s Interpretations are authoritative

TIMES (Feb. 7, 2012), http://www.ibtimes.com/articles/294485/20120207/ipad-3-apple- billion-china-trademark-lawsuit.htm. 29 Matt Peckham, iPads Snatched by Chinese Authorities, Trademark Dispute Turns Tactical, PCWORLD (Feb. 13, 2012), http://www.pcworld.com/article/249853/ipads_snatched_by_chinese_authorities_tradema rk_dispute_turns_tactical.html (reporting that many believed that “Apple's in the wrong here, and could end up paying dearly for it” and that “Apple is trampling” on Chinese trademark right). The lower people’s court in Shenzhen has ordered injunction against Apple and administrative offices has begun to confiscate Apple’s iPad infringing products sold in some Chinese cities. See Liau Yun Qing, Apple to Lose iPad Trademark in China, ZDNETASIA (Dec. 7, 2011), http://www.zdnetasia.com/report-apple-to-lose- ipad-trademark-in-china-62303147.htm. 30 Guangjian Tu, China’s New Conflicts Code: General Issues and Selected Topics, 59 AM. J. COMP. L. 563, 573 (2011) (noting that China historically is a civil law country); Charlie Xiao-chuan Weng, To Be, Rather Than to Seem: Analysis of Trustee Fiduciary Duty in Reorganization and Its Implications on the New Chinese Bankruptcy Law, 45 INT’L LAW. 6 47, 670 n.186 (2011) (“main source of law is statutes and where judicial precedents have hardly any binding effect”). 31 Kimberly N. Van Voorhis & Christie Yang, Recent Developments in Patent Law World Wide, 997 PLI/PAT 405, 419 n.58 (2010) (“As a civil law country court decisions in China have little or no precedential effect, and decisions are rarely published.”); Andrew J. Green, Tort Reform with Chinese Characteristics: Towards a “Harmonious Society” in the People’s Republic of China, 10 SAN DIEGO INT’L J. 121, 136 (courts in China “do not play the role in developing law that they do in the United States and other common law countries”). 32 Green, supra note 29, at 136 (noting that, in China’s Tort Law Reform, the Chinese Sup. People's Ct. “has displayed considerable ability in establishing legal rules through its power of judicial interpretation”). 33 Interpretation by the Supreme People’s Court Relating to Application of Law in Adjudication of Cases of Trademark Civil Disputes, (promulgated by the Adjudication Comm. of the Sup. People’s Ct., Oct. 12, 2002, effective Oct. 12, 2002), available at http://www.chinaiprlaw.com/english/laws/laws16.htm [hereinafter Trademark Law Interpretation]. For a more comprehensive understanding of the role of China Supreme People’s Court and its interpretations, see generally Li Wei, Judicial Interpretation in China, 5 WILLIAMETTE J. INT’L L. & DISP. RESOL. 87 (1997). 8 Draft Copy and supersede any antecedent inconsistent regulations on trademarks. 34

A comprehensive understanding of Chinese jurisprudence relating to trademark reputation requires an examination of Chinese laws beyond focusing on the most obvious body of law - China’s Trademark Law.35 The other two bodies of law - China’s Anti-Unfair Competition Law36 and Civil Law37- contain provisions addressing trademark reputation harm caused by unauthorized use of names.38 The three laws must be analyzed together with related Supreme People’s Court’s judicial directives.

A. China’s Trademark Law and the Supreme People’s Court

Some scholars have painstakingly studied historical record and evidence to demonstrate that China has a long history of trademark concepts and practices.39 In modern times,40 the People’s Republic of

34 Trademark Law Interpretation, supra note 31, art. 24 (“In the event of any inconsistency between any relevant antecedent regulations and these explanations, these explanations shall prevail.”). 35 Trademark Law of the People’s Republic of China (promulgated by the Standing Comm. Nat’l People’s Cong., Aug 23, 1982, effective Mar. 1, 1983) (China), available at http://www.ccpit-patent.com.cn/references/Trademark_law_China.htm [hereinafter China’s Trademark Law]. 36 Law Against Unfair Competition of the People’s Republic of China (promulgated by the Standing Comm. Nat’l People’s Cong., Sept. 2, 1993, effective Sept. 2, 1993) (China), available at http://www.ccpit- patent.com.cn/references/Law_Against_Unfair_Competition_China.htm. 37 General Principles of the Civil Law of the People’s Republic of China, THE SUP. PEOPLE’S CT. OF THE PEOPLE’S REP. OF CHINA (June 3, 2003), http://en.chinacourt.org/public/detail.php?id=2696 [hereinafter China’s Civil Law]. 38 Id. China’s Civil Law has 156 Articles adopted in 1986 that became effective January 1, 1987: Article 1 This Law is formulated in accordance with the Constitution and the actual situation in our country, drawing upon our practical experience in civil activities, for the purpose of protecting the lawful civil rights and interests of citizens and legal persons and correctly adjusting civil relations, so as to meet the needs of the developing socialist modernization. Article 2 The Civil Law of the People's Republic of China shall adjust property relationships and personal relationships between civil subjects with equal status, that is, between citizens, between legal persons and between citizens and legal persons. China’s Civil Law, supra note 35, art 1-2. 39 See generally Shao, supra note 24, at 654. The Qing Dynasty enacted intellectual property law that is similar to law found in the West. Also, during the Republic of China (1912-49), Copyright Law was enacted in 1928, Trademark Law in 1930, and Patent Law in 1944. See generally CHENGSI ZHENG, THE TEXTBOOK ON INTELLECTUAL PROPERTY LAW (1993). 40 In this context, modern time refers to after the founding of the People’s Republic of China in 1949. See generally Weiqiu Long, Intellectual Property in China, 9 Nguyen China celebrates the thirtieth anniversary of the passage of its trademark statutes in 2012.41 Much progress has been made through the lens of trademark law and practice in China.

In 1982, which is ten years after President Nixon’s historic visit, China adopted the Trademark Law.42 It is of no surprise that China adopted the first Trademark Law in 198243 because Deng Xiaoping had opened the country to foreign investment in 1979.44 The Coca-Cola Company was among the very first foreign companies to establish its brand name or trademarked soft drinks in China. It began first with permission only to sell imported Coca-Cola products to foreigners at designated hotels and stores, and then later gained government approval to build bottling plants, obtain distribution rights, and sell Coca-Cola products directly to Chinese consumers.45

China’s Trademark Law was substantially revised in 199346 and

31 ST. MARY’S L.J. 63, 65-66 (1999) (detailing the present legal system in China). 41 China Trademark Law was first adopted at the 24th Session of the Standing Committee of the Fifth National People's Congress on Aug. 23, 1982. Amendment to China Trademark Law or “Decision on the Revision of the 'Trademark Law of the People's Republic of China'' was adopted at the 30th Session of the Standing Committee of the Seventh National People's Congress on Feb. 22, 1993. China Trademark Law was amended again according to the 'Decision on the Revision of the 'Trademark Law of the People's Republic of China'' adopted at the 24th Session of the Standing Committee of the Ninth National People's Congress on Oct. 27, 2001. China’s Trademark Law, supra note 33. 42 Jerome A. Cohen, Ted Kennedy’s Role in Restoring Diplomatic Relations with China, 14 N.Y.U. J. LEGIS. & PUB. POL’Y 347, 351-52 (2011) (recounting events leading to President Nixon’s visit to China). 43 1982 is a significant year in China as the fifth Constitution was adopted, which includes intellectual property rights. See Long, supra note 38, at 66-68 (observing that the fifth Constitution was viewed as a new constitution because it is considerably different from the former constitution and it includes intellectual property rights). 44 IMMANUEL C.Y. HSÜ, THE RISE OF MODERN CHINA 858 (6th ed. 2000) (observing that after President Nixon’s visit, China’s trade with the United States rapidly grew from $92 million in 1972 to “$1,189 million in 1978, $5,478 million in 1981, $8 billion in 1986, and $13.5 billion in 1988, amounting to approximately 10 percent of China's total foreign trade”). 45 Drake Weisert, Coca-Cola in China, Quenching the Thirst of a Billion, THE CHINA BUSINESS REV. 2001 (July-Aug. 2001), https://www.chinabusinessreview.com/public/0107/weisert.html (recounting the history of Coca-Cola in China from early 1980’s to the present time). 46 Linda Yueh, Patent Laws and Innovation in China, 29 INT’L REV. L. & ECON. 304 (2009) (there are “significant revisions in 1993, which permit registration and provide protection for service marks and also enact criminal sanctions for trademark infringement”); Nadine Farid Johnson, Pursuing Trademark Reform in China, 3 NO. 3 LANDSLIDE 6, 7 n.2 (2011) (discussing the achievements made in the 1993 China Trademark revision). 10 Draft Copy 200147 to expand the scope of protection and be in compliance with the WTO Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), as China acceded to the WTO in 2001.48 Under China’s Trademark Law, trademark right begins with registration of the trademark, not with the use of the trademark in commerce.49 China’s Trademark Law refuses registration of a trademark that is identical or similar to an already registered trademark,50 and also prohibits the infringing use of a mark that is identical or similar to a registered trademark.51 These prohibitions are

47 See generally Ruixue Ran, Well-Known Trademark Protection in China: Before and After the TRIPS Amendments to China’s Trademark Law, 19 UCLA PAC. BASIN L.J. 231 (Spring 2002) (explaining China’s 2001 amendments to trademark law). 48 See generally Stephanie M. Greene, Protecting Well-Known Marks in China: Challenges for Foreign Mark Holders, 45 AM. BUS. L.J. 371, 376-77 (2008), http://www.ccpit- patent.com.cn/references/Regulations_for_Implementation_Trademark_Law_CN.htm (observing that China adopted the trademark amendments to bring its law in compliance with TRIPS by broadening the types of trademarks eligible for protection and improving remedies in trademark infringement cases); Joseph A. Massey, The Emperor is Far Away: China’s Enforcement of Intellectual Property Rights Protection, 1986-2006, 7 CHI. J. INT’L. L. 231, 236 (2006) (“With its accession to the WTO in December 2001, China made further changes to its … trademark … laws and regulations, and issued new implementing rules.”). 49 China’s Trademark Law, supra note 33, art. 3: A registered trademark means a trademark that has been approved and registered by the Trademark Office, which includes goods mark, service mark, collective mark and certification mark. The trademark registrant shall enjoy an exclusive right to use the trademark, which shall be protected by law. Art. 4 Any natural person, legal person or other organization, intending to acquire the exclusive right to use a trademark for goods produced, manufactured, processed, selected or marketed by it or him, shall file an application for the registration of the goods trademark with the Trademark Office. 50 China’s Trademark Law, supra note 33, art. 28: Where a trademark the registration of which has been applied for is not in conformity with the relevant provisions of this Law, or it is identical with or similar to the trademark of another person that has, in respect of the same or similar goods, been registered or, after examination, preliminarily approved, the Trademark Office shall refuse the application and shall not publish the said trademark. 51 China’s Trademark Law, supra note 33, art. 52: Any of the following acts shall be an infringement of the exclusive right to use a registered trademark: (1) to use a trademark that is identical with or similar to a registered trademark in respect of the same or similar goods without the authorization of the proprietor of the registered trademark (2) to sell goods that infringes the exclusive right of a registered trademark; (3) to counterfeit, or to make, without authorization, representations of a registered trademark of another person, or to sell such representations of a registered trademark as were counterfeited, or made without authorization; 11 Nguyen consistent with China as a first-to-file country, meaning trademark rights begin with registration of a trademark.52

Moreover, China’s Trademark Law grants greater protection for trademarks that are recognized as well-known.53 The protection also extends to non-registered, well-known trademarks.54 That means registration application of a well-known trademark of another will be denied, and the use of the trademark will be prohibited.55 In a trademark

(4) to replace, without authorization of the proprietor of a registered trademark, the representation of the registered trademark on the goods and resell such goods in the market; (5) to cause, in other respects, prejudice to the exclusive right of another person to use a registered trademark. 52 Eu Jin Chua, The Laws of the People’s Republic of China: An Introduction for International Investors, 7 CHI. J. INT’L L. 133, 150 (2006) (explaining that under the first- to-file system if there is a conflict between two competing applicants, the person who files first has priority over the subsequent filer); Katherine C. Spelman, Combating Counterfeiting, 417 PLI/PAT 309, 322 (1995) (“Under Chinese trademark law, registration is required for protection, and China has followed a “first-to-file” trademark system.”); 53 China’s Trademark Law, supra note 33, art. 13: Where a trademark for which the registration is applied in respect of dissimilar goods, is a reproduction, imitation or translation of a well-known trademark of another person which has been approved and registered in China, thus being liable to mislead the public, so as to cause a likelihood damage on the interests of the registrant of the well-known trademark, the application for registration shall be refused and the use thereof shall be prohibited. Art. 14 In recognizing a well-known trademark, the following factors shall be considered: (1) the recognition of the trademark by the members of the public concerned; (2) Continuous use of the trademark; (3) Continuation, extent and geographical areas of any publicity of the said trademark; (4) The records of protection of the trademark as a well-known mark; and (5) other factors demonstrating the mark is well-known. See also Leah Chan Grinvald, Tale of Two Theories of Well-Known Marks, 13 VAND. J. ENT. & TECH. L. 1, 31-33 (2010) (analyzing Chinese cases related to well-known trademarks such as Starbucks and Viagra). 54 China’s Trademark Law, supra note 33, art. 13: Where a trademark for which the registration is applied in respect of identical or similar goods, is a reproduction, imitation or translation of a well-known trademark of another person which has not been approved and registered in China, thus being liable to create confusion, the application for registration shall be refused and the use thereof shall be prohibited. (emphasis added). See also Chua, supra note 50, at 150 (if “trademarks that have not been registered in China (because registration is not available), the Trademark Law also gives protection to well-known trademarks”). 55 See Ai Guo Zhang, The Judicial Determination and Protection of Well-known st Marks in China in the 21 Century, 48 U. LOUISVILLE L. REV. 959, 961-63 (2010) (providing a history of well-known trademark protection adopted by China after it 12 Draft Copy infringement action, the prevailing plaintiff is entitled to injunctive relief, damages, and reasonable litigation costs.56

Following the adoption of China’s Trademark Law in 1982, China Supreme People’s Court has had a critical role in molding trademark jurisprudence.57 Indeed, the Court now provides a set of Interpretations on Trademark Law,58 including remedies. In the Interpretations, the prevailing plaintiffs have the right to select either actual damages or an accounting of defendant’s profits.59 Specifically, the Court instructs how losses suffered by the plaintiff in trademark cases can be calculated.60 Likewise, the Court explains how profits gained by the infringer should be quantified.61 If damages cannot be ascertained, a statutory damages amount is available under the trademark statute.62 In addition, China became a member of the Paris Convention and the WTO). 56 China’s Trademark Law, supra note 33, art. 56: The amount of compensation for the damage caused by the infringement of the exclusive right to use a trademark shall be assessed on the basis of the profits which the infringer has earned through the infringement, or the losses which the infringee has suffered, which shall include the reasonable expenses for stopping such infringement paid by the infringee. 57 See generally Xue Hanqin & Jin Qian, International Treaties in the Chinese Domestic Legal System, 8 CHINESE J. INT'L L. 299, 314 (2009) (recognizing that China’s Supreme People’s Court has even a stronger role in jurisprudence development because “The Chinese legal system is not a case law system: there is no such legal principle as stare decisis in its judicial practice. Judicial directives given by the Supreme People's Court therefore play a significant role in guiding the lower courts in the interpretation and application of law.”). 58 See Trademark Interpretation, supra note 31. 59 See Trademark Interpretation, supra note 31, art. 13: When the people’s court ascertains the amount of compensation to be paid by the infringing party pursuant to Paragraph 1 of Article 56 of the Trademark Law, it may calculate the amount of compensation on the basis of the calculating formula selected by the claimant. 60See Trademark Interpretation, supra note 31, art. 14: The losses caused by the infringement as provided for in Paragraph 1 of Article 56 of the Trademark Law may be calculated by multiplying the amount of sale reduction of the goods suffered by the claimant as a result of the infringement or the amount of sale of the infringing goods by the unit profit of the goods bearing the registered trademark. 61 See id.: The amount of gains obtained as a result of infringement as provided for in Paragraph 1 of Article 56 of the Trademark Law may be calculated by multiplying the quantity of sales of the infringing goods by the unit profit of such goods sold; if the unit profit of such goods cannot be ascertained, the calculation shall be based on the unit profit of the goods bearing the registered trademark. 62 China’s Trademark Law, supra note 33, art. 56: If it is difficult to determine the profits which the infringer has earned through infringement or the losses which the infringee has suffered as referred in the 13 Nguyen Supreme People’s Court authorizes the lower courts to exercise discretion in determining appropriate damages in cases wherein damages cannot be assessed.63 The parties, however, are free to reach an agreement on the amount of damages.64

With respect to award of reasonable litigation costs incurred in connection with trademark infringement action, China Supreme People’s Court authorizes the award to include costs associated with investigation and evidence collection.65 The lower people’s courts may award legal fees, if circumstances permit.66 Addressing delay in commencing a trademark infringement action, the Supreme People’s Court clarifies that the statute of limitations for trademark infringement is two years.67 In the

preceding paragraph, the people's court shall make a sentence of compensation under the amount of 500,000 Yuan RMB in accordance with the seriousness of infringing acts. 63 See Trademark Interpretation, supra note 31, art.16: If it is difficult to determine both the amount of gains obtained by the infringer from his infringement and the losses resulting from the infringement suffered by the victim of the infringement, the people’s court may rely on the claimant’s request or use its discretion pursuant to Paragraph 2 of Article 56 of the Trademark Law to determine the amount of compensation. In its determination of the amount of compensation, the people’s court shall take into consideration the nature, duration and consequence of the infringement, the reputation of the trademark in question, the amount of licensing fees for the use of the trademark, the type, duration and scope of the trademark license and the reasonable costs to enjoin the infringement. 64 See Trademark Interpretation, supra note 31, art. 16 (“The parties involved shall be permitted to reach a settlement agreement as to the amount of compensation pursuant to the first clause of this Article.”). 65 See Trademark Interpretation, supra note 31, art. 17(“The reasonable costs incurred to enjoin infringement as provided for in Paragraph 1 of Article 56 of the Trademark Law include the reasonable costs incurred by the claimant or his/her authorized agent to conduct investigation and evidence collection in respect of any infringement.”). 66 See id. (“At the request presented by the party in action or as the specific circumstances of the case may require, the people’s court may include legal fees in the amount of compensation pursuant to the regulations of the relevant governmental departments.”) 67 See Trademark Interpretation, supra note 31, art. 18: The statute of limitation for infringement upon the exclusive right to use registered trademarks is two years, commencing from the time when the trademark registrant or claimant knew or should have known of the infringement. If the trademark registrant or claimant brings an action beyond the two-year limitation and if the infringement continues at the time of the action, during the validity period of the exclusive right to use the trademark, the people’s court shall rule to enjoin the infringement by the defendant and the amount of compensation for the infringement shall be calculated for two years dating back from the time when the claimant brings the action before the people’s court. 14 Draft Copy event that the infringing conduct is ongoing and the trademark owner fails to bring an action within the two-years period, the trademark owner may still bring an infringement case and is entitled to injunctive relief.68 Compensatory damages in such cases, however, will be calculated for only the two years prior to the filing of the complaint with the court.69

Analyzing China’s Trademark Law for an understanding of Chinese trademark jurisprudence is incomplete, as the Trademark Law does not address the reputation or goodwill embodied in names that are not registered as trademarks but nonetheless enjoy public recognition. Additionally, Trademark Law does not contain apology remedy provision. China’s Anti-Unfair Competition Law addresses both registered trademarks and unregistered trademarks or names. As to apology remedy, China’s Civil Law includes public apology remedy provisions to eliminate bad effects.

B. China’s Anti-Unfair Competition Law and the Supreme People’s Court

In addition to Trademark Law, China’s Anti-Unfair Competition Law prohibits conduct that is deemed unfair and damaging to competitors, harming a trademark’s reputation.70 The Anti-Unfair Competition Law became effective December 1, 1993, after the National People’s Congress passed it three months earlier.71 Unfair competition is broadly defined as activities that damage an individual’s or business enterprise’s rights and interests, disturb the harmony of social economy and violate the provisions of the Anti-Unfair Competition Law.72

Article 5 of the Anti-Unfair Competition Law explicitly prohibits using someone else’s registered trademark.73 In addition, a careful examination of Article 5 reveals that it does not limit legal protection to

68 Id. 69 Id. 70 Anti-Unfair Competition Law of the People’s Republic of China, THE SUP. PEOPLE’S CT. OF THE PEOPLE’S REP. OF CHINA (Sept. 23, 2003), http://en.chinacourt.org/public/detail.php?id=3306 [hereinafter Anti-Unfair Competition Law]. 71 See Tianlong Yu, An Anti-Unfair Competition Law Without a Core: An Introductory Comparison Between U.S. Antitrust Law and the New Law of the People’s Republic of China, 4 IND. INT’L & COMP. L. REV. 315, 315-16 (1994) (background of the Chinese Anti-Unfair Competition Law). 72 Anti-Unfair Competition Law, supra note 68, art. 2. 73 Anti-Unfair Competition Law, supra note 68, art. 5 (“Managers should not use the following unfair methods in their business transactions which can damage other competitors: 1. to feign the others' registered trade mark.”). 15 Nguyen registered trademarks but encompasses a broader range of infringing conduct categorized as unfair.74 It prohibits anyone from using “the specific name, package, decoration of the famous or noted commodities, or use a similar name, package, decoration of the famous or noted commodities, which may confuse consumers distinguishing the commodities [from] the famous or noted commodities.”75 That means the protection is extended to unregistered trademarks; it protects the names, the packaging of famous or noted products76 and unauthorized use of such intellectual property is classified as unfair competition.77

Most importantly, Article 5 forbids anyone “to use the name of other enterprise or personal name and make people confuse this commodity to the other’s commodity.”78 In other words, the unauthorized use of a name belonging to an entity in connection with a product that misleads the consumer as to the origin of the product is illegal.79 The prohibition extends to the unauthorized use of a personal name in connection with a product that causes consumer confusion.80 Fraudulent misrepresentation of the quality of a product is also identified as an act of unfair completion.81 Remedies for violation of Article 5 include injunction, confiscation of illegal profits gained by the defendant from engaging in unfair competition, treble accounting of profits, cancellation of business license, and possible criminal prosecution.82

China Supreme People’s Court provides authoritative judicial

74 Id. at cl. 2. 75 Id. 76 Emphasis added here to highlight that the protection here is not for famous or well-known trademarks, but unregistered trademarks and trade dress of famous or noted products. See Interpretation of the Supreme People’s Court on Some Matters About the Application of Law in the Trial of Civil Cases Involving Unfair Competition, WORLD INTELLECTUAL PROPERTY ORGANIZATION (WIPO), http://www.wipo.int/wipolex/en/text.jsp?file_id=182407 (last visited Feb. 24, 2012) [hereinafter AUCL Interpretation]. 77 Anti-Unfair Competition Law, supra note 68, art. 5(2). 78 Id. 79 Anti-Unfair Competition Law, supra note 68, art. 5(3). 80 Id. 81 Anti-Unfair Competition Law, supra note 68, art. 5(4) prohibits others “to feign or pretend to be the certificate of attestation, mark of fame and high qualification, to feign the certificate of originality produced place of the commodities, which make others to misunderstand the qualification of the commodities because of the false certificates.” See also Yu, supra note 69, at 318-19 (listing trademark infringement and other acts prohibited under the Anti-Unfair Competition Law). 82 Anti-Unfair Competition Law, supra note 68, art. 21. See also Yu, supra note 69, at 328-29 (detailing the remedies in Article 21). 16 Draft Copy directives to lower courts in interpreting Anti-Unfair Competition Law.83 The Supreme People’s Court did not issue the AUCL Interpretation until early 2007.84 Fourteen years had passed following the enactment of the Anti-Unfair Competition Law in 1993 before the Court announced its judicial directives.85 Perhaps the Court needed time to observe and collect experience from actual cases; the Court explained in an announcement that its AUCL Interpretation is constituted in accordance with specific bodies of law “and in combination with the experiences and actual situation of the trial practice.”86

The AUCL Interpretation instructs lower courts on the protection of unregistered name or packaging of famous or well-known products as stated in Article 5 of the Anti-Unfair Competition Law.87 In addition, the Court has compiled a list of excluded features that the lower courts should not consider in analyzing whether a product should be designated as well- known.88 The AUCL Interpretation explains that a “well-known product”

83 See AUCL Interpretation, supra note 74. 84 Id. 85 See Anti-Unfair Competition Law, supra note 68, art. 33 (“This law shall become effective on December 1, 1993); AUCL Interpretation, pmbl. 86 AUCL Interpretation, supra note 74, pmbl. (“For the purpose of correctly hearing the civil cases involving unfair competition, lawfully protecting the legitimate rights and interests of business operators, and maintaining the order of market competition, the present Interpretation is constituted in accordance with the General Principles of the Civil Law of the People's Republic of China, the Anti-unfair Competition Law of the People's Republic of China, and the Civil Procedure Law of the People's Republic of China and in combination with the experiences and actual situation of the trial practice.”). 87 AUCL Interpretation, supra note 74, art.1-2. See also Aitefu Company v. Beijing Ditan Hosp. (Sup. People’s Ct. March 23, 2003) (China) (“To sum up, the specific name of a famous commodity shall be protected by law, and the owner of the commodity shall have the right to prevent others from using the specific name of its famous commodity without permission to conduct unfair competition act. But “84” disinfectant solution was not the specific name of the famous commodity, and shall not be owned by one company exclusively.”). 88 AUCL Interpretation, supra note 74, art. 2: In case of any of the following circumstances, the people's court shall not ascertain them as the typical name, package and ornament of well-known commodities: (1) the commonly-used name, graphics or model of the commodities; (2) the name of the commodities that just directly specifies the quality, major raw materials, functions, utilities, weight, quantity or any other characteristic of the commodities; (3) the shape produced due to the nature of the commodities, the shape of the commodities that should be produced for the purpose of obtaining technical effects, as well as the shape that produces substantial value to the commodities; or (4) other name, package or ornament of the commodities that has no notable 17 Nguyen refers only to products with certain market popularity in China and is known by the relevant public.89 Lower courts must consider factors such as duration, territory, volume, and target market in determining whether a product has enjoyed market popularity.90

The Supreme People’s Court expands the “decoration of the famous or noted commodities” language of Article 5 of the Anti-Unfair Competition Law.91 The Court offers its interpretation to be “the pattern of business appliances or the clothes of operating personnel, and etc.” that would constitute the “overall business image with a unique style;” and therefore, legal protection is afforded under the Anti-Unfair Competition Law.92 This protects distinctive trade dress, or the look and feel or total appearance of a product or service.93

The Court also enlarges legal protection for a name belonging to an enterprise. The name can be “a name of any” domestic enterprise or “a name of a foreign enterprise” used in China for commercial purposes.94 Such names will be protected under the Anti-Unfair Competition Law. In

characteristic. 89 AUCL Interpretation, supra note 74, art. 1 (“Well-known commodities as stipulated in Subparagraph (2) of Article 5 of the Anti-unfair Competition Law refer to those commodities that have certain market popularity within the territory of China and are known by the public concerned.”). 90 Id. (“The people's court shall take into account the time, region, volume and targets for selling such commodities, the duration, degree and scope for any promotion of such commodities, as well as the protection situation as well-known commodities, and make comprehensive judgments when affirming well-known commodities.”). 91 AUCL Interpretation, supra note 74, art. 3. 92 Id. 93 See Long, supra note 38, at 82 (noting that China enacted the Law Against Unfair Competition which offered protection to distinctive trade dress in 1993); Paul B. Birden, Jr., Trademark Protection in China: Trends and Directions, 18 LOY. L.A. INT’L & COMP. L.J. 431, 448 (1996) (mentioning trade dress protection under China’s Anti- Unfair Competition Law). The interpretation provided by the Sup. People’s Ct. on trade dress brings to mind Two Pesos, where the U.S. Supreme Court addressed the trade dress of a fast food, Mexican-themed restaurant. The trade dress in Two Pesos was described as: …festive eating atmosphere having interior dining and patio areas decorated with artifacts, bright colors, paintings and murals. The patio includes interior and exterior areas with the interior patio capable of being sealed off from the outside patio by overhead garage doors. The stepped exterior of the building is a festive and vivid color scheme using top border paint and neon stripes. Bright awnings and umbrellas continue the theme. Two Pesos, 505 U.S. at 765. See also Xuan-Thao Nguyen, Should It be a Free for All? The Challenge of Extending Trade Dress Protection to the Look and Feel of Websites in the Evolving Internet, 49 AM. U. L. REV. 1233, 1239-40 (2000) (discussing trade dress protection for look and feel of products and services). 94 AUCL Interpretation, supra note 74, art. 6. 18 Draft Copy addition, “a shop name in the name of enterprise” is also protected if the shop name has “certain market popularity” and is recognized by the relevant public.95 Any unauthorized use of protected names will be deemed unfair competition.96

With respect to the name of an individual, the Court explains that if the name of a person used in “the business operation of commodities,” the name will be entitled to protection under the Anti-Unfair Competition Law.97 Unauthorized use of the name in connection with products that cause public confusion is prohibited.98

In summary, understanding China’s trademark jurisprudence requires a search beyond China’s Trademark Law. Names, whether belonging to an individual or an entity, are protected from unauthorized use by a third party who harms the reputation of the name through misleading or confusing the public into believing that the products bearing the name come from the same origin.99 The source of legal protection for protected names is China’s Anti-Unfair Competition Law, and this law’s coverage is broader than China’s Trademark Law.100 The China Supreme People’s Court has a formative role in designing trademark jurisprudence, as seen in its extensive judicial directives interpreting China’s Anti-Unfair Competition Law.101 In the absence of the stare decisis legal system, the Court skillfully incorporated fourteen years of judicial decisions to craft its AUCL Interpretations. In some ways, not surprisingly, China’s Anti- Unfair Competition Law shares some similarities to the United States Lanham Act on Unfair Competition. Like Article 5 of China’s Anti- Unfair Competition Law, under Section 43(a) of the Lanham Act registration of a term or name is not required, yet unauthorized use of the term or name in connection with goods that causes consumer confusion is prohibited.102

95 Id. 96 Id.; Anti-Unfair Competition Law, supra note 68, art. 5(3). 97 AUCL Interpretation, supra note 74, art. 6. 98 Anti-Competition Law, supra note 68, art. 5(3). 99 Id. 100 Anti-Unfair Competition Law, supra note 68. 101 See AUCL Interpretation, supra note 74. 102 15 U.S.C. § 1125(a): (a) Civil action (1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which— 19 Nguyen

C. China’s Civil Law and Supreme People’s Court

The most important body of law for understanding China’s trademark jurisprudence is the General Principles of the Civil Law of the People’s Republic of China.103 China’s Civil Law was promulgated in 1986 and became effective January 1, 1987.104 This copious law protects the civil rights105 and interests of Chinese citizens and legal persons106 and governs civil relations within the frame work of a developing socialist country.107 Relevant articles in China’s Civil Law relating to trademark jurisprudence deserve close attention.108

(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. 103 China’s Civil Law, supra note 35. 104 China’s Civil Law, supra note 35, art. 156. 105 China’s Civil Law includes inheritance law, adoption law, family law, intellectual property law, among others. See China’s Civil Law, supra note 35. 106 “Legal person” is defined in Articles 36 and 37: Article 36 A legal person shall be an organization that has capacity for civil rights and capacity for civil conduct and independently enjoys civil rights and assumes civil obligations in accordance with the law. A legal person's capacity for civil rights and capacity for civil conduct shall begin when the legal person is established and shall end when the legal person terminates. Article 37 A legal person shall have the following qualifications: (1) establishment in accordance with the law; (2) possession of the necessary property or funds; (3) possession of its own name, organization and premises; and (4) ability to independently bear civil liability. China’s Civil Law, supra note 35, art. 36-37. 107 China’s Civil Law, supra note 35, art. 1: This Law is formulated in accordance with the Constitution and the actual situation in our country, drawing upon our practical experience in civil activities, for the purpose of protecting the lawful civil rights and interests of citizens and legal persons and correctly adjusting civil relations, so as to meet the needs of the developing socialist modernization. 108 See also Kara L. Phillips & Amy L. Sommers, A Tragedy of the Commons: Property Rights Issues in Shanghai Historic Residences, 28 PENN ST. INT’L REV. 137, 167 n. 141 (2009) (noting that China’s Civil Law discusses contractual and property rights “at Chapter 5 and contains four sections, addressing Property Ownership and Related Ownership Rights, Creditors Rights, Intellectual Property Rights and Personal Rights”). 20 Draft Copy

China’s Civil Law provides a separate section entitled “Intellectual Property Rights,” which recognizes that exclusive rights in the patents, copyrights and trademarks obtained by legal persons are entitled to protection.109 Pertinent to this paper, China’s Civil Law mandates that the “rights to exclusive use of trademarks obtained by legal persons, individual businesses and individual partnerships shall be protected by law.”110 That means if the exclusive right to use a trademark is infringed, the trademark registrant has the right to demand that “the infringement be stopped, its ill effects be eliminated and the damages be compensated” as prescribed in Article 118 of China’s Civil Law.111 The court eliminates ill effects by ordering the defendant to make a public apology in a newspaper or trade publication.112

Not only owners of trademarks enjoy legal protection under China’s Civil Law, legal persons and individuals have the legal protection of “the right of name.” Indeed, under China’s Civil Law, Chinese citizens, legal persons, businesses, partnership and enterprises all have “the right of name” and “the right to use and lawfully assign their own names”.113 Essentially, the legal protection afforded under China’s Civil Law extends to unregistered trademarks or names that have not been registered under China’s Trademark Law. Furthermore, Article 120 of China’s Civil Law mandates that legal protection as it relates to the legal person’s “right of name, reputation or honor” means that the individual or business entity has the right to “demand that the infringement be stopped,” the individual’s or business entity’s “reputation be rehabilitated,” and the “ill effects be eliminated.”114 Most importantly, the individual or business entity can demand for compensatory damages and “an apology” in addition to injunctive relief.115

109 China’s Civil Law, supra note 35, art. 94-97. 110 China’s Civil Law supra note 35, sec. 3: Article 94 Citizens and legal persons shall enjoy rights of authorship (copyrights) and shall be entitled to sign their names as authors, issue and publish their works and obtain remuneration in accordance with the law. Article 95 The patent rights lawfully obtained by citizens and legal persons shall be protected by law. Article 96 The rights to exclusive use of trademarks obtained by legal persons, individual businesses and individual partnerships shall be protected by law. 111 China’s Civil Law, supra note 35, art. 118. 112 See Fangfang Ceramics Manufactory v. Hengsheng Ceramics and Bldg. Materials Manufactory (Higher People’s Ct. of Fujian Province Dec. 30, 1998) (China) (applying art. 118 of China’s Civil Law to order the defendant to stop its infringing conduct, pay for damages, and publish an apology in a newspaper). 113 China’s Civil Law, supra note 35, art. 99. 114 China’s Civil Law, supra note 35, art. 120. 115 Id. 21 Nguyen

In addition to Articles 118 and 120 providing injunction, damages, costs and public apologies as remedies, China’s Civil Law has another relevant provision relating to civil liability when rights such as trademark rights and “right of name, reputation or honor” are infringed. Article 134 of China’s Civil Law provides a set of “methods of bearing civil liability”116 that courts can select and apply as appropriate remedies in cases where principles of Civil Law have been violated by the defendants. Among the ten methods, “elimination of ill effects and rehabilitation of reputation” and “apology” are listed in Article 134 of China’s Civil Law.117

Significantly, China Supreme People’s Court dictates through its judicial directives that the lower people’s courts follow Article 134 of China’s Civil Law in issuing remedies for the prevailing plaintiff.118 In addition to the pertinent remedies provided in China’s Trademark Law, the lower people’s courts may order the infringer to “cease and desist the infringement, eliminate interference, compensate for losses and eliminate

116China’s Civil Law, supra note 35, art. 134: Article 134 The main methods of bearing civil liability shall be: (1) cessation of infringements; (2) removal of obstacles; (3) elimination of dangers; (4) return of property; (5) restoration of original condition; (6) repair, reworking or replacement; (7) compensation for losses; (8) payment of breach of contract damages; (9) elimination of ill effects and rehabilitation of reputation; and (10) extension of apology. The above methods of bearing civil liability may be applied exclusively or concurrently. When hearing civil cases, a people's court, in addition to applying the above stipulations, may serve admonitions, order the offender to sign a pledge of repentance, and confiscate the property used in carrying out illegal activities and the illegal income obtained therefrom. 117 China’s Civil Law, supra note 35. 118 Trademark Interpretation, supra note 31, art. 21: When hearing cases of infringement upon the exclusive right to use registered trademarks, the people’s court may, pursuant to Article 134 of the General Principles of Civil Law, Article 53 of the Trademark Law and the specific circumstances of the cases, rule to order the infringer to bear such civil liabilities as to cease and desist the infringement, eliminate interference, compensate for losses and eliminate adverse effects. It may also order such civil sanctions as fines, confiscation of the infringing goods, counterfeit trademark representations and materials, tools and equipment used specifically to produce infringing goods. The amount of fines may be determined by reference to the Implementing Rules of the Trademark Law of the People’s Republic of China. 22 Draft Copy adverse effects.”119 Recent decisions published by Chinese courts have applied Articles 118, 120 and 134 of China’s Civil Law in issuing orders against defendants who have used trademarks belonging to others and harming trademark owners’ reputations.120

Combining the three laws, Trademark Law, Anti-Unfair Competition Law and Civil Law, and judicial directives present a complete view of China’s trademark jurisprudence. China extends protection to names that are registered as trademarks and those not registered as trademarks. If the unregistered names have been used by the plaintiffs in commerce to build reputation over time, they are eligible for protection. China seems to understand that trademarks and names are an embodiment of reputation and the unauthorized use misleading the public is harmful to both the plaintiff and the public. China provides similar reputation protection for trade dress, the packaging or look and feel, of a product or service.

Protection for trademark reputation as dictated by the three laws and judicial directives can be seen in the written decisions published by lower people’s courts. Judicial opinions, though not binding,121 illustrate the development of trademark jurisprudence across China. Such decisions are important, as they relate to protecting individual person’s or entity’s reputation, compensating the injured person or entity, enjoining the misleading of the public caused by the defendant’s unauthorized use of a name, and restoring public order. Public apology also plays a corrective measure in the remedy to make the injured individual or entity and the public whole again.

II. JUDICIAL DECISIONS ON TRADEMARK REPUTATION

An analysis of the official Chinese judicial decisions that are both published and translated into English indicates that Chinese courts protect registered trademarks or names of legal persons against unauthorized use, apply Articles 118, 120 or Article 134 of China’s Civil Law to eliminate ill effects, and order public apology when the defendant willfully engages in conduct that harms the reputation of the plaintiff’s name or registered trademark. Public apology is generally in addition to injunction, damages and litigation costs. Below are the decisions.

119 Id. 120 See infra Parts II-III. 121 Chua, supra note 50, at 136 (“Although there is no system of binding case precedent in China, such written decisions can at least provide guidance to the public and legal practitioners.”).

23 Nguyen A. Tianjin Goubuli Baozi Catering (Group) Company v. Harbin Tianlongge Hotel and Gao Yuan

The plaintiff in this case obtained a trademark registration for the name “Goubuli” for baozi products in July, 1980. 122 Baozi is a type of Chinese steamed bun with meat filling.123 The plaintiff brought a trademark infringement action against defendants Harbin Tianlongge Hotel and Gao Yuan for using the “Goubuli” trademark without permission in 1991.124 The defendants argued that their use of the “Goubuli” name was merely for identification purposes. Specifically, they asserted that defendant Gao Yuan was the direct descendant of Gao Guiyou, the originator of the “Goubuli” baozi, and had entered into an agreement with defendant Harbin Tianlongge Hotel to use the name “Goubuli” in the plaque hanging at the hotel entrance where the defendant Gao Yuan worked as a pastry chef.125 The plaque stated “Gao Yaolin, the Fourth Generation Offspring of and Gao Yuan, the Fifth Generation Offspring of Authentic Tianjin Goubuli Baozi.”126 In 1993, both the Harbin Xiangfang District People’s Court and the Harbin Intermediate People’s Court found non-trademark infringement in favor of the defendants.127 The plaintiff then appealed to the Higher People’s Court of Heilongjian Province.

On December 28, 1994, the Higher People’s Court found that the “Goubuli” trademark was a valid trademark registered by the plaintiff and that under trademark law the plaintiff has the exclusive right to use the trademark and enjoys the protection of the law.128 The Court noted that even though Gao Yuan called himself a descendant of the original creator of Goubuli baozi, he had neither the right to use the trademark Goubuli nor the authority to enter into an agreement with the defendant hotel for their use of the trademark. The Court concluded that the defendants’ hanging of the plaque at the hotel door entrance was for the purpose of operating the hotel, and therefore defendants were in violation of the plaintiff’s exclusive right to use its trademark. The defendants’ use was not merely to identify the offspring of the original creator of Goubuli

122 Tianjin Goubuli Baozi Catering (Group) Co. v. Harbin Tianlongge Hotel and Gao Yuan (Higher People’s Ct. of Heilongjian Province Dec. 28, 1994) (China). 123 Ye Jun, Best of the Buns, CHINA DAILY (May 21, 2004), http://www.chinadaily.com.cn/english/doc/2004-05/21/content_332721.htm. 124 Tianjin, (Higher People’s Ct. of Heilongjian Province Dec. 28, 1994) (China). 125 Id. 126 Id. 127 Id. 128 Id. 24 Draft Copy baozi. The Higher People’s Court reversed the lower courts’ decisions.129

The Higher People’s Court then applied Article 134(1), (7) and (10)130 and ordered the defendants to stop the infringing conduct, destroy the plaque, and pay 44,800 yuan to the plaintiff within ten days of the judgment. The Court also awarded the plaintiff 7,380 yuan for litigation costs. In addition, the Court ordered the defendants to “publish a statement of apology” in a newspapers of similar rank “at or above the city level in Harbin”.131 The Court proclaimed that the content of the apology “shall be subject to examination and approval of this Court” and the defendants must bear the relevant expenses.132

B. China Pharmaceutical University v. Furui Technology Co., Ltd.

China Pharmaceutical University (“CPU” or “University”) is a well-known public university in China, specifically in the field of medicine.133 Along with affiliated enterprises, CPU has transformed many of its scientific research achievements into producing medical instruments and medicines, and has brought them to the marketplace. CPU does not own a registered trademark, but enjoys a good market reputation through its affiliated enterprises and has become a “symbol of market competition in the pharmaceutical industry.”134

The defendant Furui Technology is in the business of making nutritional supplements.135 On March 2, 2004, the defendant began to sell baby nutritional supplements under the name “China Pharmaceutical University,” with the name printed on the packaging boxes and advertisement materials. The defendant insisted that its use of the name “China Pharmaceutical University” was justifiable because in 2003 it had rented a room from the Physical Education Department of China Pharmaceutical University, and the name was part of the contact address.136 CPU brought an action of unfair competition against the defendant.

129 Id. 130 China Civil Law, supra note 35, art. 134 (methods of bearing civil liability include “(1) cessation of infringements,… (7) compensation for losses; … (10) extension of apology”). 131 Id. 132 Id. 133 China Pharm. Univ. v. Furui Tech. Co., Ltd. (Higher People’s Ct. of Jiangsu Province Jan. 31, 2005) (China). 134 Id. 135 Id. 136 Id. 25 Nguyen The Nanjing Intermediate People’s Court issued its decision in late 2004.137 The Court applied China’s Anti-Unfair Competition Law and found that under Article 2 of that law CPU has the capability of a business operator through its affiliation with other enterprises, and therefore it can bring a suit against the defendant for unfair competition. The Intermediate People’s Court then applied Article 5 of China’s Anti-Unfair Competition Law, which prohibits businesses from using “any other’s enterprise name or personal name to mislead people into believing that the commodities are produced by the other enterprise or person.”138 The Court explained that the original legislative intent was to forbid businesses “from taking advantage of the reputation of any other to sell its own products, which will injure its counterparts.”139 The Court recognized that although the name “China Pharmaceutical University” is not an enterprise name, however, the name has been used to make “its medicine competitive” through its business affiliations with various enterprises,140 and therefore the name “China Pharmaceutical University” is protected from “illegal use” that would impair its reputation.141

The Intermediate People’s Court concluded that the defendant violated China’s Anti Unfair Competition Law. In reaching its conclusion, the Court first focused on the tenant lease agreement between the Physical Education Department of China Pharmaceutical University and the defendant, Furui Technology. The lease was for a term of three years, at the annual rate of 7,000 yuan. The lease agreement expressly prohibited the defendant from engaging in any commercial activity in the name of China Pharmaceutical University and that its commercial activities should have no connection with the University. The Intermediate People’s Court noted that the defendant printed the words “Honorable Production of Furui Technology, Eastern Campus of China Pharmaceutical University, Nanjing Municipality, P.R. China,” “Jiangsu Furui Technology Ltd. Co., East of China Pharmaceutical University, Nanjing Municipality, P.R. China,” and “Contact address: Box 181 of China Pharmaceutical University, Nanjing Municipality, P.R. China” on its packages and marketing materials.142 With such conspicuous use of the University’s name, the defendant “infringed on the right” of the name, “usurped the commercial reputation of China Pharmaceutical University,” “caused the confusion to the general public,” and “cheated the consumer”

137 Id. (the lower court, the Interm. People’s Ct. of Nanjing, rendered its decision on Dec. 13, 2004). 138 Id. 139 Id. 140 Id. 141 Id. 142 Id. 26 Draft Copy as to its affiliation with CPU.143

The Intermediate People’s Court then looked to Article 134 of China’s Civil Law in issuing its ruling against the defendant. The Court ordered an injunction against the defendant. The defendant was directed to cease all infringing use of the University’s name and destroy all infringing packages and marketing materials. The defendant was instructed to pay the University 100,000 yuan for economic losses along with litigation costs. The Court also compelled the defendant to make a public apology within fifteen days of the judgment in the Yangzi Evening News “so as to eliminate bad effects caused by” the defendant’s unauthorized use of the University’s name.144 The Court admonished the defendant that if it did not promptly make the public apology, “the main contents of this judgment would be published, and the fees incurred therefrom should be borne” by the defendant.145 The Court entered its decision on December 13, 2004. The defendant appealed to the Higher People’s Court of Jiangsu Province. On January 31, 2005, the Higher People’s Court of Jiangsu Province affirmed the lower court’s decision on its application of law, finding of fact and civil liability judgment.146

C. Shenhua Football Club v. Teleitong Trade Ltd Corp.

The plaintiff Shenhua Football Club is a nationally-known football club in China.147 On March 21, 1999, the plaintiff moved its headquarters office from Quyang Road, Shanghai, to Hongkou Football Stadium on Dongjiangwan Road, Shanghai. The plaintiff accused the defendant Teleitong of using the “Shenhua” name in its commercial advertisements for furniture products published in Xinmin Sports News on March 22, March 25 and April 2 of 1999. In the commercial advertisements, the defendant included the following sentence after it introduced Teleitong’s furniture line products: “Shenhua has moved to a new home, how about you?”148

The People’s Court of Jingan District in Shanghai held that under China’s Civil Law “legal persons, individual businesses, and individual partnerships shall enjoy the right of name.”149 Furthermore, enterprises

143 Id. 144 Id. 145 Id. 146 Id. 147 Shenhua Football Club v. Teleitong Trade Ltd. Corp. (Shanghai Second Interm. People’s Ct. Sept. 11, 2000) (China). 148 Id. 149 Id. 27 Nguyen such as “legal persons, individual businesses and individual partnerships” have “the right to use and lawfully assign their own names.”150 The Jingan District Court followed the judicial directive issued by the Supreme People’s Court on China’s Civil Law, which instructed that “the usurpation or false representation of another person’s name or title that has resulted in damage shall be regarded as infringement on the right of name or title.”151 Accordingly, the Jingan District Court found that “Shenhua” is the name of the plaintiff Shenhua Football Club, and therefore the plaintiff was entitled to “the right of name of legal person, and to its use. Any usurpation or false representation by others shall be prohibited.”152 In addition, the Jingan District Court recognized the fame of “Shenhua” meant that the name has become “a symbol of honor and has the capability to exert influence on the public under certain circumstances in a society of commodity economy, such name is an intangible asset for the owner for its ability to bring in commercial profit.”153 Any unauthorized use of the name is an act of infringement. The defendant’s commercial advertisements used the “Shenhua” name without authorization, and therefore the defendant must “bear civil liability.”154

The Jingan District Court then applied Article 120 of China’s Civil Law, which provides that if a citizen’s or legal person’s “right of personal name… reputation or honor is infringed upon, he shall have the right to demand that the infringement be stopped, his reputation rehabilitated, the ill effects eliminated and an apology made”.155 Under this law, the Jingan District Court could issue an injunction against the defendant and restore the plaintiff’s reputation by ordering the defendant to make a public apology. Article 120 of China’s Civil Law also provides compensatory damages to make the plaintiff whole again. Here, the defendant was ordered to pay the plaintiff 50,000 yuan for its economic losses and 7,110 yuan for litigation costs.156 In addition, the Jingan District Court also directed defendant Teleitong to publish a notice in the Xinmin Sports News apologizing to the plaintiff within ten days after the judgment. The defendant appealed to the Shanghai Second Intermediate People’s Court.

On September 11, 2000, the Shanghai Second Intermediate People’s Court held that the Jingan District Court’s factual findings were

150 Id. 151 Id. 152 Id. 153 Id. 154 Id. 155 Id. 156 Id. 28 Draft Copy correct.157 The Court recognized that, under the law the “legal person is entitled to use its name and to prohibit any other person from using it illegally.”158 Here, defendant Teleitong used the name of Shenhua Club in its commercial advertisements without consent and such use constituted “infringement upon the right of name of Shenhua Club.”159 The Court rejected the defendant’s defense that its use was not malicious and could not be considered infringement of the Shenhua name.160 Affirming the lower court’s ruling on remedies, the Intermediate Court also ordered that litigation costs incurred at both district court and appellate court levels “shall be borne” by defendant Teleitong.161

D. Fangfang Ceramics Manufactory v. Hengsheng Ceramics and Building Materials Manufactory

On February 28, 1993, the plaintiff, Fangfang Manufactory, obtained a trademark registration for “Hengsheng” in connection with ceramic tile products.162 The defendant, Hengsheng Ceramics, used the name “Hengsheng” on its ceramic tiles without the plaintiff’s authorization. The plaintiff brought a trademark infringement suit against the defendant alleging that the defendant had intentionally misled the consumer as to the source of the tiles. The defendant asserted that “Hengsheng” is part of its company name as approved by an administrative agency for enterprises.163 The Intermediate People’s Court of Quanzhou City found that, although the defendant had the right to use its company name, it had no right to use the name “Hengsheng” on ceramic tile boxes because the name had already been registered by the plaintiff as a trademark for its ceramic tile products.164 The plaintiff, as owner of the registered trademark “Hengsheng,” had the exclusive right to use the trademark. The defendant’s unauthorized use constituted infringement. The Quanzhou Court applied Article 118 of China’s Civil Law to determine the defendant’s liability.165 The defendant was ordered to stop its infringing use of the registered trademark, pay economic losses of 50,000 yuan to the plaintiff, and make an apology to the plaintiff.166

157 Id. 158 Id. 159 Id. 160 Id. 161 Id. 162 Fangfang, (Higher People’s Ct. of Fujian Province Dec. 12, 1998) (China). 163 Id. 164 Id. 165 Id. 166 Id. 29 Nguyen On appeal the Higher People’s Court of Fujian Province rejected the defendant’s argument that it merely used its company name; the defendant in fact used the registered trademark that belonged to the plaintiff. The Higher Court affirmed the lower court’s order as to injunction, damages and public apology.167 The Higher Court also instructed the defendant to destroy the infringing tile boxes.168

In summary, the above four cases illustrate the dynamic development of trademark jurisprudence wherein courts - applying the three laws - recognize property rights to trademarks and names, and therefore issue injunctions directing the infringer to cease the infringing conduct. The injunction also prevents the spread of any unfair competition conduct committed by the infringer. To compensate for the damages incurred by the complainant stemming from the infringing conduct, courts apply liability rules to order the infringer to pay. Courts also include in the damages other costs, such as attorney’s fees and expenses related to evidence collection. Injunctions and damages, however, are not the only remedies. Considering harm to trademark reputation is an injury to both the complainant and the public in cases where the defendants’ infringing conduct were intentional or malicious, the court instruct the infringer to make a public apology in addition to injunction and damages. The wrongdoer must publish the apology, the content of which is subject to the court’s approval, in a newspaper selected by the court.169

Indeed, in the above four cases, the defendants were fully aware of the reputations associated with the plaintiffs’ trademarks or names. The defendants deliberately ignored the plaintiffs’ rights and exploited the commercial value in the trademarks or names by usurping it. The

167 Id. 168 See also Starbucks Corp. and Shanghai President Coffee Corp. v. Shanghai Starbucks Cafe Co., Ltd. and Shanghai Starbucks Cafe Co., Ltd., Nanjing Road Branch (Higher People’s Ct. of Shanghai Municipality Dec. 20, 2006) (China) (affirming the lower court’s injunction, damages, cost and public apology order against the defendant for its unauthorized malicious use of Starbucks trademark); Fangfang, (Higher People’s Ct. of Fujian Province Dec. 30, 1998) (China) (affirming the lower court’s order on public apology under trademark infringement and unfair competition); Beijing Pudun Clothes Mfg. Co., Ltd. v. Beijing Xianzi Clothing Co., Ltd.(The Second Interm. People’s Ct. of Beijing Municipality Dec. 11, 2000) (China) (ordering the defendant to make a public apology for its deliberate infringement); Aiguefou Co. v. Najing No. 1 Pesticide Factory (Interm. People’s Ct. of Nanjing Dec. 30, 1998) (China) (ordering the defendant to immediately desist from infringing upon the plaintiff’s trademark right, compensate the plaintiff for economic losses, pay legal costs and auditing fee related to the litigation and make an apology to the plaintiff in Nanjing Daily). 169 For another set of cases summary, see Top 10 IPR Cases in 2004, TEE & HOWE, http://www.teehowe.com/news_detail.php?id=113&language=en (last visited Feb. 23, 2012). 30 Draft Copy defendants intentionally misled the public as to origin. Under apologetic justice, the courts addressed the harm by ordering public apologies upon finding malicious intent, in addition to the other remedies. On the other hand, when the defendant’s infringing conduct is not malicious, the court generally does not issue an order for public apology.170 Instead, the court will only order injunction, damages and litigation costs against the defendant.

III. THE CONTENT OF PUBLIC APOLOGIES

What is the content of a public apology ordered by Chinese courts against defendants in trademark infringement and unfair competition cases? A review of Chinese newspapers available online provides a window into the content of public apologies in trademark reputation cases. Consider the following apologies published in Chinese newspapers as illustrative examples:171

I, Yu Haijun (ID No. : 330825197612254618), hereby certify that I used the trademark “Su Jia Ai Hua” without the permission of Su Aihu who is the trademark registrant, and is therefore expressing my sincere apology to the trademark registrant, and ensure that I will not use the trademark “Su Jia Ai Hua” without permission again.

I, Yu Lijun (ID No. : 33082519690718451X), hereby certify that I used the trademark “Su Jia Ai Hua” without the permission of Su Aihu who is the trademark registrant, and is therefore expressing my sincere apology to the trademark registrant, and ensure that I will not use the trademark “Su Jia Ai Hua” without permission again.

I, Zhong Zhiping (ID No. : 332527196911102626), hereby certify that I used the trademark “Su Jia Ai Hua” without the permission of Su

170 See generally Beijing Delifrance Food Co., Ltd. v. Beijing Sun City Shopping Mall (Interm. People’s Ct. of Beijng Municipality January 10, 1991) (China) (issuing injunction against the defendant and ordering the defendant to pay compensatory damages, attorney’s fees, and investigation costs in favor of the plaintiff). 171 Ms. Xu Fei and Ms. Kang Na, both passed the Chinese Bar Exam before they enrolled at the SMU Dedman School of Law LLM program, 2010-11, assisted the author in the research for public apologies in intellectual property cases. Based on their research results, here is a list of newspapers where public apologies were published: Gangzhou Evening Newspaper; Xinhua Daily; South Daily; Zhejiang Legal Daily; Econ. Daily; Motor Cycle Trade Papers; Beijing Evening; China Theater News. They also translated the public apologies for me. (on file with author).

31 Nguyen Aihu who is the trademark registrant, and is therefore expressing my sincere apology to the trademark registrant, and ensure that I will not use the trademark “Su Jia Ai Hua” without permission again.

I, Yu Lijun (ID No. : 330702196809122622), hereby certify that I used the trademark “Su Jia Ai Hua” without the permission of Su Aihu who is the trademark registrant, and is therefore expressing my sincere apology to the trademark registrant, and ensure that I will not use the trademark “Su Jia Ai Hua” without permission again.

The four apologies above are made by individual infringers of the trademark “Su Jia Ai Hua”. The apologies were published in the Zhejiang Legal Daily on March 26, 2010.172 All four infringers admitted that they used the trademark owned by the trademark registrant without authorization. They expressed their apologies to the trademark registrant, Su Aihu, in public. The infringers each promised that they would not use the trademark without permission in the future.

The next apology is more lengthy, as it includes the ruling from Tianjing Supreme People’s Court against the defendant Tianjin Gang Tian Group for infringing the trademark “Yamaha.”

“According to the civil judgment from Tianjin Supreme Court, we state as follows: While reporting the 2009 and 2010 “National Catalog of manufacturers and products for Automobile, Civil refitted car and Motorcycle”, we used “Linhai-Yamaha” as the engines’ trademark, on the types of GT125T, GT125T-A, GT125T-B and GT505T-A Gang tian Motorcycles, which has been determined as infringement on the trademark of Yamaha Motor Co., Ltd in the above-mentioned judgment. The GT50T-A type Gang Tian motorcycles, also produced by our subordinate enterprise Tianjin Gang Tian Engine Co., Ltd., were attached with the mark “Engine licensed by Yamaha” at the front and rear. This expression has also been determined as infringement on the trademark of Yamaha Motor Co., Ltd in the above-mentioned paper of judgment.

172 Apology statement, Zhejiang Legal Daily, 3rd edition, (Mar. 26, 2010), available at http://zjfzb.zjol.com.cn/html/2010-03/26/content_3_1.htm;

32 Draft Copy We hereby apologize to Yamaha Motor Co., Ltd for these trademark infringements. And we have already modified the contents related to the “Linhai-Yamaha” engines in “National Catalog of Manufacturers and products for Automobile, Civil refitted car and Motorcycle”. Furthermore, we guarantee that we will not have those or similar infringing acts in the future.”

The defendants, the Tianjin Gang Tian Group made the above public apology as published in a trade publication, the Motorcycle Journal in April of 2003.173 The apology shows that the defendants admitted that they had engaged in infringing conduct in violation of the plaintiff’s trademark rights. Specifically, the defendants used the plaintiff’s Yamaha trademark in catalogs without permission. By stamping the phrase “Engine licensed by Yamaha” on their products, the defendants falsely advertised and sold their own products as Yamahas. The defendants misled the public by falsely asserting that they had received a license to distribute engine products from the plaintiff. The defendants apologized for their deeds and promised that they would not engage in similar trademark infringement conduct.

IV. TRADEMARK HARM AND APOLOGETIC JUSTICE

Judge Learned Hand perceptively observed that the unauthorized use of a trademark or name causes harm to trademark reputation and recognized that such harms constitute an injury. The United States and China each have different approaches to remedying harm to trademark reputation. China does not follow the United States’ approach to remedies in cases of trademark reputation harm. Public apology is one of the remedies in cases wherein an individual or legal person’s name is maliciously or willfully infringed. This apologetic justice is absent in United States law on trademark reputation harm.

In the United States, the plaintiff can seek legal protection for trademark reputation under the Lanham Act, the federal unfair competition law.174 The plaintiff does not need to own a registered trademark, name or

173 The Chinese and English versions of the apology are on file with the author. Another trademark infringement case was brought by Yamaha, and in 2007, the Sup. People’s Ct. in Beijing ordered the defendant to cease the infringing conduct, pay $8.3 million yuan in damages, and make a public apology. See Olivia Chung, A Trademark Milestone for Yamaha in China, ASIA TIMES ONLINE (June 29, 2007), http://www.atimes.com/atimes/China_Business/IF29Cb02.html. 174 See Laura A. Heymann, The Law of Reputation and the Interest of the Audiences, 52 B.C. L. REV. 1341, 1385-1400 (2011) (analyzing trademark reputation 33 Nguyen symbol.175 The Lanham Act prohibits any person from using in commerce any word, name, symbol, any false designation of origin, or misleading description of fact that is likely to cause confusion, mistake, or deception as to the affiliation or association of the person with another person.176 The federal unfair competition statute also prohibits the use of word, name, symbol belonging to another person in commercial advertising.177

Typically, if the plaintiff prevails under the Lanham Act, it may request the court for injunctive relief.178 Unlike in China, where injunction is routinely granted after the plaintiff’s name is found

cases under the Lanham Act); David S. Ardia, Reputation in a Networked World: Revisiting the Social Foundations of Defamation Law, 45 HARV. C.R.-C.L. L. REV. 261, 277 n.92 (2010) (noting that the Lanham Act protects and regulates reputation). Fabrication Enters., Inc. v. Hygenic Corp., 64 F.3d 53, 57 (2d Cir. 1995) (“[T]he purpose of the Lanham Act …is to secure ‘the public's interest in protection against deceit as to the sources of its purchases, [and] the businessman's right to enjoy business earned through investment in the good will and reputation attached to a trade name.”) (quotation omitted). 175 Aaron Clark, Not All Edits Are Created Equal: The Edited Movie Industry's Impact on Moral Rights and Derivative Works Doctrine, 22 SANTA CLARA COMPUTER & HIGH TEC. L.J. 51, 54 (2005) (“The Lanham Act § 43(a) embodies federal unfair competition law and is aimed at preventing and redressing ‘misrepresentations that may injure plaintiff's business or personal reputation, even where no trademark is concerned.”’ (quoting Gilliam v. Am. Broad. Cos., 538 F.2d 14, 24 (2d Cir. 1976))). 176 See Section 43 (a) of the Lanham Act, codified as 15 U.S.C. § 1125(a). In 1946, Congress passed the Lanham Act “to protect the public from deceit, to foster fair competition, and to secure to the business community the advantages of reputation and goodwill by preventing their diversion from those who have created them to those who have not.” S. Rep. No. 79-1333, at 4 (1946), reprinted in 1946 U.S.C.C.A.N. 1274, 1277. Mobil Oil Corp. v. Pegasus Petroleum Corp., 818 F.2d 254, 259 (2d Cir. 1987) (“Lanham Act extends trademark protection to related goods in order to guard against numerous evils in addition to restraints on the possible expansion of the senior user's market, including consumer confusion, tarnishment of the senior user's reputation, and unjust enrichment of the infringer.”). See also Irina D. Manta, Privatizing Trademarks, 51 ARIZ. L. REV. 381, 390-92 (2009) (reviewing the history of the Lanham Act). 177 15 U.S.C. § 1125(a): (a) Civil action (1) (1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which— (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities 178 Mark A. Lemley & Mark McKenna, Irrelevant Confusion, 62 STAN. L. REV. 413, 466 n.122 (2010) (asserting that injunctions are an appropriate remedy in cases where consumer confusion occurs as to the source of goods or services). 34 Draft Copy infringed,179 in the United States the prevailing plaintiff must proceed to the next step of establishing the four factors test in order to obtain permanent injunctive relief.180 This assumes that the plaintiff has already gone to trial and succeeded at the infringement phase.181 Currently, 98% of civil cases filed in the United States do not advance to trial; they are either settled or disposed before trials. That means only 2% of civil cases reach the trial phase in hope for permanent injunction and damages.182 Likewise, over ninety-five percent of all trademark cases settled or terminated before trial and only 2% of trademark cases went to trial in 2007.183

Unlike in China, where the plaintiff routinely received damages upon a finding of infringing use,184 damage awards in the United States are not

179 See Xuan-Thao Nguyen, The China We Hardly Know: Revealing the New China’s Intellectual Property Regime, 55 ST. LOUIS U. L.J. 773, 798-806 (2011) (discussing intellectual property cases and remedies in China). 180 See PBM Prods., LLC v. Mead Johnson & Co., 639 F.3d 111, 126 (4th Cir. 2011) (“Before an injunction may issue, however, the party seeking the injunction must demonstrate that (1) it has suffered an irreparable injury; (2) remedies available at law are inadequate; (3) the balance of the hardships favors the party seeking the injunction; and (4) the public interest would not be disserved by the injunction.”). The four-factor test was affirmed in a patent case by the Supreme Court in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). 181 Even in trademark cases where the plaintiff seeks preliminary injunction and does not go to trial, courts hold that there is no presumption of irreparable harm upon a finding of likelihood of success on the merits. The plaintiff still must establish the four- factor test established in eBay v. MercExchange in order to obtain preliminary injunction. Voice of the Arab World, Inc. v. MDTV Med. News Now, Inc., 645 F.3d 26, 34 (1st Cir. 2011) (vacating the district court’s preliminary injunction ruling and holding that “a request to preliminarily enjoin alleged trademark infringement is subject to traditional equitable principles, as set forth by the Supreme Court in eBay”). See also Salinger v. Colting, 607 F.3d 6877-78 (2d Cir. 2010) (holding that “eBay applies with equal force (a) to preliminary injunctions (b) that are issued for alleged copyright infringement”). 182 Patricia Lee Refo, Opening Statement: The Vanishing Trial, LITIGATION ONLINE (Winter 2004), http://www.americanbar.org/content/dam/aba/publishing/litigation_journal/04winter_ope ningstatement.authcheckdam.pdf (“federal courts actually tried fewer cases in 2002 than they did in 1962, despite a fivefold increase in the number of civil filings” and only 1.8% of federal civil cases were disposed of by trial in 2002 compared to 11.5 percent in 1962). 183 Gauri Prakash-Canjels & Kristen Hamilton, Basis of Damage Awards in Trademark Cases, 44 LES NOUVELLES, 125, 125 (June 2009) (“A majority of trademark cases are terminated before any court action occurs (33 percent in 2007) and another 54 percent of these cases are disposed off Pre-Trial. Only about 2 percent of trademark cases went to trial in 2007.”); Jerome Gilson & Anne Gilson LaLonde, The Lanham Act: Time for a Face-Lift? 92 TRADEMARK REP. 1013, 1019 (2002) (“Well over ninety-five percent of all trademark cases settle along the way, leaving just a tiny percentage that go to trial and a decision.”). 184 In trademark infringement cases, if actual damages cannot be established, the plaintiff can seek statutory damages up to 500,000 yuan. See China’s Trademark Law, 35 Nguyen entitled as a matter of right; they are only available if the plaintiff can prove at trial with reasonable certainty that it has indeed suffered losses due to the defendant’s particular use of the infringing mark in connection with specific products. 185 In addition, courts will only award attorney’s fees and litigation costs to the prevailing plaintiff at trial if the defendant deliberately or willfully infringed the trademark.186 In summary, under the Lanham Act, injunctive relief and damages are difficult and costly to obtain in practice.187

The uncertainty of obtaining injunction and damages at trial, high cost of litigation and the fractional number of cases filed advance to trial represent the current state of trademark cases in the United States. Consequently, the reality is that trademark cases may yield inconsistent judge-made trademark law.188 In a way, U.S. trademark law is perhaps a

supra note 33, art. 56 (“If it is difficult to determine the profits which the infringer has earned through infringement or the losses which the infringee has suffered as referred in the preceding paragraph, the people's court shall make a sentence of compensation under the amount of 500,000 Yuan RMB in accordance with the seriousness of infringing acts.”). 185 Plaintiff must demonstrate that the injury is proximately caused by the defendant’s use of the trademark. See Phoenix of Broward, Inc. v. McDonald's Corp., 489 F.3d 1156, 1167 (11th Cir. 2007) (applying the test that “whether the injury alleged is the type of injury that the Lanham Act was designed to redress—harm to the plaintiff's “ability to compete” in the marketplace and erosion of the plaintiff's “good will and reputation” that has been directly and proximately caused by the defendant's false advertising”). 186 See 15 U.S.C. § 1117(a) (West 2012); Super Duper, Inc. v. Mattel, Inc., 382 F. App’x. 308138 (4th Cir. 2010) (affirming district court did not err in determining that the trademark infringement was an “exceptional case” and thus rendering the award of attorneys' fees appropriate). 187 The difficulty can be seen in Optimum Techs., Inc. v. Henkel Consumer Adhesives, Inc., 496 F.3d 1231, 1251 (11th Cir. 2007). The district court declared a mistrial after the jury was unable to reach a verdict on trademark and unfair competition claims. The district court then ruled that the plaintiff had failed to establish a connection between the defendant’s use of the trademark at issue and the expert's damages figure of $7.6 million. Id. That means there was “no legally sufficient evidentiary basis for a reasonable jury to find for” the plaintiff on the issue of damages.” The district court awarded judgment as a matter of law to the defendant on the plaintiff’s infringement and unfair competition claims. Id. The appellate court affirmed the district court’s decision. Id. See also Competition Specialties, Inc. v. Competition Specialties, Inc., 87 F. App’x. 38, 40 (9th Cir. 2004) (after a four-day trial, the jury returned a verdict that found the defendant had infringed plaintiff’s trademark, but that no damages were proximately caused by the infringement). 188 Gilson & LaLonde, supra note 180, at 1019 (“No one knows whether the same trademark case would be decided differently from one circuit to another based on the different approaches. There are simply no empirical data, nor are there likely to be. Well over ninety-five percent of all trademark cases settle along the way, leaving just a tiny percentage that go to trial and a decision.”). 36 Draft Copy nice looking statute, but it is not effective in reality.189 Why should an individual or business pay high attorney’s fees and litigation costs to receive unsatisfactory results? The plaintiff may want more than just injunction and monetary damages, even though these two types of remedy have become increasingly difficult to obtain.190 The plaintiff wants more, but what does more means is not prescribed in the Lanham Act.191 China’s trademark jurisprudence on apologetic justice is instructive in addressing harm to trademark goodwill and reputation.

China’s trademark jurisprudence, as seen through China’s Trademark Law, China’s Anti-Unfair Competition Law and China’s Civil Law, offers a fresh look at how a country with an emerging new economic and legal power will address trademark reputation harm. Decisions rendered by Chinese courts applying the three laws192 reveal an understanding that, names or words used by legal persons in commerce are not merely names or words but are representations of the legal persons.193 The names or words embody the goodwill and reputation that have been carefully

189 Most illuminating example of the current state of trademark law is the story recounted by Gilson & LaLonde, supra note 180, at 1020: At the [Trademark Trials and Appeals Board’s] TTAB's twenty-fifth anniversary dinner, then-Chairman Saul Lefkowitz held up a shiny coin and asked the audience, “Do you know what this is?” He paused for dramatic effect. No one answered. He flipped it high in the air, caught it, and said, “This is how we decide likelihood of confusion.” 190 Heymann, supra note 171, at 1435 (describing that “[a]lthough monetary damages are typically awarded in many cases involving reputational injury, such awards tend to serve as a proxy for the degree of emotional harm alleged to have been felt by the plaintiff as a result of the harm to her reputation or, in the case of a business, the loss of selling power of the mark. There is, however, an uneasy fit between monetary awards and various justifications for the legal protection of reputation, particularly those that do not conceive of reputation as a property interest”). 191 To address the shortcomings, crafting remedies for reputation harm, as one scholar has suggested, requires a focus on audience interests that “might counsel more attention to disclaimers, retractions, and other forms of information correction as an appropriate remedy or as a consideration in determining whether further relief from the court is warranted.” Heymann, supra note 171, at 1435-36. 192 See supra Part I. 193 Peter Yu has explained how trademark protection is appealing to China as the protection and the concept of “face” are related in Chinese culture: Trademark protection creates the least friction with the Chinese culture, and the justification for trademark protection, in particular its emphasis on goodwill, is easy for the Chinese to understand. Indeed, the importance of “face” runs deep in the Chinese culture and helps explain why it is important to protect trademarks. Just as “face” is about an individual's self-respect, prestige, and social standing, trademarks, especially well-known ones, provide information about the quality, reputation, and commercial standing of the products. Peter Yu, From Pirates to Partners (Episode II): Protecting Intellectual Property in Post-WTO China, 55 AM. U. L. REV. 901, 998 (2006). 37 Nguyen cultivated by the legal persons.194 A malicious or willful unauthorized use of the names or words harms the plaintiff’s reputation and misleads the public. Such use is not just a misappropriation of property right for which injunction is routinely issued by courts.195 In addition, such use is not just an economic harm for which compensatory damages are often fashioned by courts. Even if it is an economic harm, China’s trademark jurisprudence shows that damages to trademark reputation may be difficult to establish due to the nature of the harm, and therefore statutory damages are prescribed.196 Moreover, unlike U.S. court’s reluctance to award the plaintiff with the defendant’s profit in trademark infringement and unfair competition cases,197 China Supreme People’s Court instructs the lower courts to disgorge the defendant’s profits gained from the infringing conduct.198

Most importantly, China’s trademark jurisprudence demonstrates that property interest theory and torts liability theory alone do not heal the harm to both the plaintiff and the consuming public caused by the defendant’s conduct. Therefore in addition to injunction, damages, and costs issued against the defendant, the defendant must do more to heal the harm.199 The defendant must eliminate the bad effects of the harm done to

194 See id. 195 Scholars often noted the property interest bestowed on trademarks in the United States and China. See Timothy Lau, Kyle Niemi & Lanna Wu, Protecting Trademark Rights in China through Litigation, 47 STAN. J. INT’L. L. 441, 443-44 (2011) (“Both Chinese and American law share the fundamental understanding of the ‘harm’ of trademark infringement…. Like modern American trademark law, Chinese law is therefore directed not only to prevent consumer confusion but also to protect trademarks as a property right.”). 196 See China’s Trademark Law, supra note 33, art. 56; supra Parts I-II. 197 See generally Danielle Conway–Jones, Remedying Trademark Infringement: The Role of Bad Faith in Awarding an Accounting of Defendant’s Profits, 42 SANTA CLARA L. REV. 863 (2002) (reviewing cases where courts rule that an award of defendant’s profits is only available if the plaintiff establishes that the defendant has infringed the trademark in bad faith). 198 See generally Opinions of the Sup. People’s Ct. on Civil Law, supra note 10, para. 151 (“In case anyone obtains profits by infringing upon the right to name or title, … right to reputation …, the infringer shall, in addition to compensating the losses of the victim, have his ill-gotten gains taken over.”); Trademark Interpretation, supra note 31, art. 14: The amount of gains obtained as a result of infringement as provided for in Paragraph 1 of Article 56 of Trademark Law may be calculated by multiplying the quantity of sales of the infringing goods by the unit profit of such goods sold; if the unit profit of such goods cannot be ascertained, the calculation shall be based on the unit profit of the goods bearing the registered mark. 199 I add the emphasis here to illustrate that public apology is not in lieu of injunction, damages, attorney’s fees and cost. In fact, as seen in Chinese courts’ decisions, public apology is generally the last item in the list of remedies issued by the 38 Draft Copy the plaintiff and the public. Often the defendant is ordered to make an apology in relevant newspapers or trade publications within a short period of time after the court’s judgment. The content of the apology, in many cases, must be approved by the court.200 The defendant must recognize that the plaintiff has the exclusive right to use the trademark or name, admit that it has committed a wrongdoing, apologize for the conduct, and promise that it will not engage in such conduct again. The content of the apology shows that it is not merely an “I am sorry” but is sincere and purposeful.201 Apologetic justice is not for the plaintiff alone, as the public will also see and read the newspapers or trade publications.202

Apologetic justice in trademark jurisprudence is not unique to China. Japanese courts also order apologies in trademark infringement cases. The difference between the two, however, is profound. Whereas Japanese courts may order apologies in lieu of damages,203 Chinese courts order public apologies in addition to injunction, damages, attorney’s fees and costs.204 Furthermore, Chinese courts only order public apology in cases court. Often, the order of appearance goes first to injunction, then damages, attorney’s fees and cost, and lastly, public apology. 200 Hoover, supra note 23, at 345 (noting that Chinese courts have been ordering public apology in trademark infringement cases). 201 Russell Korobkin & Chris Guthrie, Psychological Barriers to Litigation Settlement: An Experiential Approach, 93 MICH. L. REV. 107, 150(1994) (“[A] more sincere or more substantive apology could restore equity to a [harmed] relationship.”). 202 U.S. scholars have developed a substantial scholarship on apologies in the last twenty-five. Apology scholarship demonstrates the positive role of apologies in restorative justice. See generally Hiroshi Wagatsuma & Arthur Rosett, The Implications of Apology: Law and Culture in Japan and the United States, 20 LAW & SOC’Y REV. 461 (1986); John O. Haley, Comment, The Implication of Apology, 20 LAW & SOC’Y REV. 499 (1986); Heather Strang & Lawrence W. Sherman, Repairing the Harm: Victims and Restorative Justice, 2003 UTAH L. REV. 15; Max Bolstad, Learning from Japan: The Case for Increased Use of Apology in Mediation, 48 CLEV. ST. L. REV. 545 (2000); Jennifer Robbennolt, Attorneys, Apologies, and Settlement Negotiation, 13 HARV. NEGOT. L. REV. 349 (2008). 203 H. Stephen Harris, Jr., Competition Law and Patent Protection in Japan: A Half-Century of Progress, a New Millennium of Challenges, 16 COLUM. J. ASIAN L. 71, 87 (2002) (“U.S. trademark owners have been surprised to learn that a Japanese court may order a public apology to restore business goodwill, in lieu of (or in addition to) damages.”). See also Jay Dratler, Jr., Trademark Protection for Industrial Designs, 1988 U. ILL. L. REV. 887, 968 n.417 (1988) (“In Japan, a public apology for trademark infringement, usually by publication in specified newspapers, is a common remedy in trademark actions.”). 204Another difference is in calculating damages. Japanese courts have been reluctant in providing an accounting of defendant’s profits, but Chinese courts are instructed to allow the prevailing plaintiff to select defendant’s profits, instead of actual economic losses suffered by the plaintiff. See Harris, supra note 200, at 87 (Japanese courts “have been slow to recognize infringement and extremely reluctant to award damages beyond the minimal amount of lost royalty payments”). Compare Harris, supra note 200, 39 Nguyen where the defendants maliciously or willfully infringed the plaintiff’s trademark or name205 Also, if the defendant does not obey the court’s order, the plaintiff is permitted to publish a public apology in the name of the defendant and then charge the defendant for the cost.206

CONCLUSION

For the enhancement of fair competition beneficial to the society, trademark law prevents the public from being misled as to source and protects the trademark owner’s investment in building a reputation. Injunction and damages are remedies that do not truly consider harm to the public. A public apology that is both sincere and purposeful, in addition to injunction and damages, as seen in China’s trademark jurisprudence on reputation and apologetic justice, offers a new dimension to Judge Learned Hand’s astute observation on injury to trademark reputation. China’s apologetic justice instructs that courts should not indiscriminately order public apologies. Only when willful or malicious infringement of trademark reputation occurs should courts direct the defendant to make a public apology. Whether the United States will consider apologetic justice in trademark reputation cases, however, is a question for future discussion.

As for Apple, the defendant in the trademark infringement litigation in Shenzhen, it will not be ordered to apologize to Proview Technology as long as Apple has not intentionally infringed the plaintiff’s trademark, and the public has not been misled by Apple’s use of “iPad” in China.207 As Apple and the rest of us have painfully discovered: knowledge of China’s jurisprudence is paramount. Apple faced a seizure of 45 iPads in February 2012 after the lower court in Shenzhen held that Apple infringed Proview Technology’s trademark, which had been registered since 2001 for

with Trademark Law Interpretation, supra note 31, art. 13-15. 205 See Leah Chan Grinvald, Making Much Ado About Theory: The Chinese Trademark Law, 15 MICH. TELECOMM. & TECH. L. REV. 53, 92 (2008) (stating that under a distributive theory of trademark law, Chinese courts order public apology in cases where malicious intent was shown on the part of the defendant). 206 See generally Ding Xiaochun v. Nantong Educ. Bureau and Jiangsu Fine Arts Publ’g House (Interm. People’s Ct. of Nantong City Dec. 19, 2002) (China) (ordering public apology in addition to injunction, damages, and cost against defendant Jiangsu Fine Arts Publishing House; and if the defendant failed to make the public apology, “Ding Xiochun may publish the announcement of apology on Nantong Daily in the name of Jiangsu Fine Arts Publishing House” and the “expenses shall be undertaken by Jiangsu Fine Arts Publishing House.”). 207 For more information on the litigation, see iPads Removed From Shelves after Trademark Ruling, THE PEOPLE’S GOV. OF HEBEI PROVINCE (Feb. 13, 2012), http://english.hebei.gov.cn/2012-02/13/content_14603610.htm. 40 Draft Copy computer displays in China, which is years before Apple began its use of the name “iPad.”208

208 See Michael Wines, Inflaming Trademark Dispute, Second City in China Halts Sales of the iPad, N.Y. TIMES (Feb. 15, 2012), http://www.nytimes.com/2012/02/15/technology/second-city-in-china-halts-sales-of- apple-ipads.html?_r=1. 41 THE MISSING CONTEXT OF THE IP CLAUSE: MADISON, JEFFERSON, AND THE INFLUENCE OF THE FRENCH PHILOSOPHES ENCYCLOPÉDIE PROJECT

Sean M. O’Connor Professor of Law and Faculty Director, Law, Business & Entrepreneurship Program University of Washington School of Law [email protected]

Despite many Supreme Court decisions and scholarly articles, we still do not have a clear idea of what exactly the IP Clause in the Constitution means. Alternately called the Progress Clause, Copyright Clause, or Patent Clause, the language that appears in Article I, Section 8, Clause 8 is generally agreed to authorize Congress to create patent and copyright laws (although it does not mention these by name). Terms that have certain meanings today—such as “arts” and “science”—are clearly used in different ways. Existing scholarship and case law has looked primarily to English sources to interpret the Clause, with unsatisfactory results. This article argues that the proper source for interpretation should be the writings of the French Enlightenment philosophes instead. Recent research has shown that Madison, the drafter of the Clause, and Jefferson, the Framer known to have strong views on IP, were more inclined to the philosophes positions than to those of contemporaneous English Enlightenment writers. In particular, they were avid subscribers to the historic Encyclopedie project of Diderot and d’Alembert published during the late eighteenth century. While strongly influenced by the earlier British philosopher France Bacon, the philosophes held different views from contemporary British philosophers, including Locke. New English translations of Encyclopedie articles make plain what key terms of the IP Clause mean—including longstanding mysteries such as why the term “discoveries” is used instead of “inventions.” Recreating relevant parts of the philosophes and their American fans’ intellectual worldview finally provides satisfactory answers to the puzzle of the IP Clause, while providing surprising implications for what the Framers intended. Branding Privacy

Paul Ohm Associate Professor, University of Colorado School of Law [email protected] | http://paulohm.com

Forthcoming 97 MINNESOTA LAW REVIEW ___ (2013)

This Article focuses on the problem of what some have called the “privacy lurch,” which I define as an abrupt change made to the way a company handles data about individuals. Two prominent examples include Google’s decision in early 2012 to tear down the walls that once separated data about users collected from its different services and Facebook’s decisions in 2009 and 2010 to expose more user profile information to the public web by default than it had in the past. Privacy lurches disrupt long-settled user expectations and undermine claims that companies protect privacy by providing adequate notice and choice. They expose users to much more risk to their individual privacy than the users might have anticipated or desired, assuming they are paying attention at all. Given the special and significant problems associated with privacy lurches, this Article calls on regulators to seek creative solutions to address them.

But even though privacy lurches lead to significant risks of harm, some might argue we should do nothing to limit them. Privacy lurches are the product of a dynamic marketplace for online goods and services. What I call a lurch, the media instead tends to mythologize as a “pivot,” a welcome shift in a company’s business model, celebrated as an example of the nimble dynamism of entrepreneurs that has become a hallmark of our information economy. Before we intervene to tamp down the harms of privacy lurches, we need to consider what we might give up in return.

Weighing the advantages of the dynamic marketplace against the harms of privacy lurches, this Article prescribes a new form of mandatory notice and choice. To breathe a little life into the usually denigrated options of notice and choice this Article looks to the scholarship of trademark law, representing an integration of two very important but too- rarely connected areas of information law. This bridge deserves to be built, as the theory of trademark law centers on the very same information quality and consumer protection concerns that animate notice and choice debates in privacy law. These theories describe the important informational power of trademarks (and service marks and, more generally, brands) to signal quality and goodwill to consumers concisely and efficiently. Trademark scholars also describe how brands can serve to punish and warn, helping consumers recognize a company with a track record of shoddy practices or weak attention to consumer protection. In short, the information qualities of trademarks can meet the notice deficiencies of privacy law

The central recommendation of this Article is that lawmakers and regulators should force almost every company that handles customer information to associate its brand name with a specified set of core privacy commitments. The name, “Facebook,” for example, should be inextricably bound to that company’s specific, fundamental promises about the amount of information it collects and the uses to which it puts that information. If the company chooses someday to depart from these initial core privacy commitments, it must be required to use a new name with its modified service, albeit perhaps one associated with the old name, such as “Facebook Plus” or “Facebook En- hanced.”

Although this solution is novel, it is far from radical when one considers how well it is supported by the theoretical underpinnings of both privacy law and trademark law. It builds on the work of privacy scholars who have looked to consumer protection law for guidance, representing another important intradisciplinary bridge, this one between privacy law and product safety law. Just as companies selling inherently dangerous products are obligated to attach warning labels, so too should companies shifting to inherently dangerous privacy practices be required to display warning labels. And the spot at the top of every Internet web page listing the brand name is arguably the only space available for an effective online warning label. A “branded privacy” solution is also well-supported by trademark theory, which focuses on giving consumers the tools they need to accurately and efficiently associate trademarks with the consistent qualities of a service in ways that privacy lurches disregard.

At the same time, because this solution sets the conditions of privacy lurches rather than prohibiting them outright, and by restricting mandatory rebranding only to situations involving a narrow class of privacy promises, it leaves room for market actors to innovate, striking a proper balance between the positive aspects of dynamism and the negative harms of privacy lurches. Companies will be free to evolve and adapt their practices in any way that does not tread upon the set of core privacy commitments, but they can change a core commitment only by changing their brand. This rule will act like a brake, forcing companies to engage more in internal deliberation than they do today about the class of choices consumers care about most, without preventing dynamism when it is unrelated to those choices or when the value of dynamism is high. And when companies do choose to modify a core privacy commitment, its new brand will send a clear, unambiguous signal to consumers and privacy watchers that something important has changed, directly addressing the information quality problems that plague notice-and- choice regimes in ways that improve upon prior suggestions.

From Federal Common Law to Textualism: The Evolving Interpretation of Patent Cases in the Supreme Court

David S. Olson Assistant Professor, Boston College Law School [email protected] | Bio | SSRN

This paper examines the jurisprudence of the Supreme Court (and to a lesser extent, lower courts) as the Court has evolved in its approach to interpreting patent statutes. The paper contends that the Supreme Court has moved from a more common law approach to the patent statutes, especially with regard to patent doctrines such as patentable subject matter and obviousness, to a more strictly textualist approach to patent statutes. The paper compares and contrasts the Supreme Court’s patent law decisions with contemporaneous antitrust decisions to chart the similarities, and eventual dissimilarities of the Court’s approach to these two areas of law. The paper posits that the Court eventually turned towards textualism in patent law but not antitrust for at least two reasons. First, the Court never explicitly claimed congressional delegation to shape the patent laws as it did antitrust laws. But the Court did very much act as if it considered itself free to make patent common law in certain areas in the first century of the Court’s jurisprudence. Second, while hard cases remain in antitrust law, there the Court was able to adopt the framework of increasing consumer welfare to arrive at a fairly consistent approach to antitrust law. There has been no such consensus and overall unifying approach to patent law. This paper shows that, instead, various patent law doctrines remain in tension with each other as they—to greater or lesser extents—represent the conflicting underlying policy interests of patent law. The inability to resolve these underlying tensions in a comfortable way has lead the Court to give up on crafting certain areas of patent law and instead fall back to a textualism that leaves problems to Congress to solve. Notwithstanding the much-heralded America Invents Act, however, Congress unfortunately has shown itself unable or unwilling to take on the core conflicts and uncertainties of patent law. Thus, the evolution of the Court’s patent law interpretation has left patent law unmoored and inconsistent. Rhetorical Devices in Claim Construction

Kristen Osenga Professor of Law, University of Richmond School of Law [email protected]

My project is about the intersection of law and language, with a particular focus on how rhetorical devices are used in legal fora to explain scientific and technical terms to non- scientist judges, juries, and lawyers. I have touched briefly on this issue before in exploring patent claim construction, but I intend to take a much closer look at this specific problem.

In patent law, among other areas of law, scientific concepts need to be described in lay person’s terms. The scope of patent protection may turn on an understanding of science as explained via words. Most often, the interpreter of this scientific verbiage will be someone with little or no scientific background. Thus, rhetorical tools are crucial in explaining science in lay person’s terms.

Explaining terms of art used in science and technology is difficult, particularly in conjunction with the overlaying legal jargon which is also new to the layperson. Successful explanation is more than simply the choice of words used (which is of course important) but also the use of rhetoric in providing the account – narrative, metaphor, metonymy, personification, and so on. Further, the socio/economic/linguistic backgrounds of a trial audience, including the judge, the attorneys, the parties, and the jury, will vary wildly, making the selection of an efficient rhetorical device difficult. When does the introduction of science in the law require the use of rhetorical devices? What tools have been used during trial and how successfully? Are there other uses of rhetoric in law that should be applied in the science context? If the information is not conveyed successfully to the layperson, is it because the science is too hard or because the tools were not effectively used?

Traditional Knowledge Rights and Wrongs

Sean A. Pager Associate Professor of Law, Michigan State University [email protected]

After years of effort, WIPO delegates are poised in Geneva to put the finishing touches on a pair of ambitious treaties to mandate global protection for traditional knowledge (TK). WIPO’s treaty-drafting efforts has bifurcated along subject matter lines between (a) cultural expression and (b) technical know-how. Despite this formal distinction between cultural and technical realms, the two treaties overlap considerably in the legal protections they would afford. This Article argues for a sharply differentiated approach. Just as copyright and patents received different protection in conventional IP regimes, so too, the WIPO TK treaties should contour the protections they offer according to the distinct interests and values that TK protection seeks to advance in each realm. What would emerge is a more modest package of rights, not all of which requires transnational regulation. A baseline comprised of expanded international norms on unfair competition would supply a shared starting point. Beyond that, however, protection afforded to TK should vary according to the subject matter. A strong case exists for a global benefit-sharing mechanism applicable to technical traditional knowledge. The shared global interest in the efficient exploitation of ethnobiological knowledge combined with the asymmetrical nature of protagonists’ interests makes such a mechanism desirable from a game-theoretical standpoint. Moreover, the distributional inequalities associated with the status quo are particularly skewed. Benefit-sharing can be implemented through a relatively streamlined liability regime minimizing the need for global governance. Indeed, such benefit-sharing is already required under the Convention on Biodiversity. Thus, TK norm-development here can build upon existing implementation efforts. By contrast, the case for robust multinational protection of traditional cultural expression/ folklore is far less convincing. The North-South capacity gap is less acute in copyright industries as compared to patent, reducing distributive justice concerns. Instead, concerns over cultural integrity predominate. Yet, because the dilutive harm from cultural appropriation largely springs from local uses, there is less need for a global approach. Moreover, the “thick governance” required to regulate authenticity militates toward localized solutions. Eschewing global solutions would allow more contextualized tailoring of the rights, of particular importance here given the constitutional implications of speech regulation. Sean A. Pager is associate professor at Michigan State University College of Law, where he serves as Associate Director of the Intellectual Property, Information and Communications Law Program (IPIC). He teaches various intellectual property law courses. A 1998 graduate of U.C. Berkeley School of Law, Professor Pager practiced law at Howard Rice in San Francisco and clerked for Judge James Browning on the U.S. Court of Appeals for the Ninth Circuit. Prior to entering academia, Professor Pager earned an LL.M. in International Law from the European University Institute in Florence, Italy, while studying on a Fulbright Fellowship. His scholarly interests focus on the regulation of creative industries and cultural identities in intellectual property and international trade law.

Copying Norms in the Tattoo Industry Aaron Perzanowski Assistant Professor, Wayne State University Law School Visiting Associate Professor, University of Notre Dame Law School [email protected] | Bio | SSRN

This paper reports the results of the first qualitative study of the norms surrounding creative production, collaboration, ownership, and copying in the multi-billion dollar U.S. tattoo industry. Despite prevalent copying within their industry, tattoo practitioners have largely ignored formal legal structures for resolving disputes with clients, other artists within the industry, or creators outside of it. Instead, they rely primarily on a set of complex, nuanced, and occasionally conflicting norms, attitudes, and expectations enforced through informal mechanisms. Relying on data gathered through a series of qualitative interviews, this paper develops a descriptive account of creative practices within the tattoo industry and contrasts that account with existing legal frameworks and norm-based approaches in other creative communities.

Unenforceable Patents

Lee Petherbridge Professor of Law and Rev. Richard A. Vachon, S.J. Fellow Loyola Law School Los Angeles [email protected] | Bio

Jason Rantanen Associate Professor of Law, University of Iowa College of Law [email protected] | Bio

R. Polk Wagner Professor of Law, University of Pennsylvania Law School [email protected] | Bio

Despite intense criticism and startling rhetoric, inequitable conduct has remained a jurisprudential enigma. In this study we empirically examine patents that have been determined unenforceable for inequitable conduct and compare them to litigated patents. We report evidence that unenforceable patents are different from litigated patents. Unenforceable patents have significantly longer pendency, more parent applications, and contain more claims. Unenforceable patents also cite fewer U.S. patent references. Surprisingly, we find no evidence that patents with foreign inventors are more likely to be unenforceable and no evidence that the subject matter of a patent associates with an inequitable conduct determination. This report of the study also uses the newly discovered observations to hypothesize about why inequitable happens, how inequitable conduct relates to patent policy, and what if anything practitioners who are concerned about an inequitable conduct determination might take as potential warning signs.

Acupressure: The Role of Market Forces in China's Emerging Copyright Enforcement Environment

Eric Priest Assistant Professor, University of Oregon School of Law [email protected]

In Beijing, China’s largest “Youtube clones”—until recently havens for unlicensed video content—now spend tens of millions of dollars purchasing exclusive internet broadcast rights for popular television shows. In Guangzhou, a growing number of factories are purchasing authorized Microsoft Windows and Office software for the first time. What do these two narratives have in common and what accounts for them in a country widely viewed as having little practical regard for copyright despite the formal laws in place? The standard view in the U.S. is that respect for copyright in China will improve when domestic copyright interests reach a critical mass and it is “in China’s own best interests” to cultivate an effective enforcement environment, and/or when the Chinese government develops the will to expend the political capital necessary to bear down on infringers. This received wisdom suggests the narratives above are best explained by some combination of aggressive copyright litigation and government action or pressure. But neither of these explanations appears to be the central cause of the sudden reversals identified above. Rather, both trends seem to be best explained by powerful market-based pressures that do not directly derive from the copyright owners or from the application of copyright law. This paper, drawing from interviews with executives in China’s internet and content industries, seeks to provide a more nuanced picture of the copyright enforcement environment in China, and explores what lessons these case studies might teach. Do they represent “bubble” markets, or do they indicate a broader overall improvement in China’s copyright and IP enforcement environment? The paper also considers what these case studies can teach us about China’s role in, and how it is affected by, the international intellectual property system.

Evaluating Flexibility in International Patent Law

Sarah R. Wasserman Rajec Frank H. Marks Visiting Associate Professor of Law The George Washington University Law School Teaching Fellow in Law, Science & Technology Stanford Law School (Fall 2012) [email protected]

Patent law is territorial; each country grants rights that can only be enforced within its borders. However, since the late nineteenth century, when the Paris Convention became the first major international treaty to attempt a degree of harmonization of patent rights, the pendulum has been swinging towards greater harmonization and unification. Within developed countries, the movement towards stronger intellectual property rights has generally run parallel to greater domestic industrial development. However, even developed countries with strong protection for intellectual property may not always benefit from static and inflexible laws. One example is the development of a research exemption in various countries allowing companies to engage in certain acts that would otherwise constitute infringement. These exemptions are aimed at encouraging the development of and earlier market access to generic drugs. Moreover, aside from such legislative provisions, the protections afforded by a patent are only theoretically uniform within any given jurisdiction. Because of the heterogeneous nature of the inventions and technologies covered, perfect uniformity would be as difficult to assess as it would be to achieve. As a result, all patent systems contain laws that apply in a non-uniform way, by design or de facto, all of which may be termed flexibilities.

However, at the strong urging of the most developed countries, international and bilateral agreements have pursued international harmonization, cementing high minimum levels of patent rights in member countries of the WTO with few exceptions. In addition, existing exceptions allowed by TRIPS are based on current practice but do not allow for future variations. The international legal system is on a slow march to harmonize and entrench patent laws without a methodology for analyzing and evaluating existing and potential future flexibilities. This paper proposes a framework to analyze and evaluate the use of flexibilities in patent law from an international perspective. Such a framework has descriptive value for comparisons of patent protections in countries with varying levels of development. It also has prescriptive value, allowing for normative claims about what types of flexibility may be desirable departures from international standards. The proposed framework evaluates flexibilities according to the dimension of the right that it targets, the degree of flexibility, and the institutional implementation. These are lined up alongside the purpose of the flexibility and the problem being targeted, providing a methodology of assessment. This proposed framework suggests a way to evaluate the desirability—from a domestic or international perspective—of a given or proposed flexibility. It also allows for a more general assessment of deliberate and inherent flexibilities in the patent laws of countries with disparate levels of development. Lastly, it suggests some normative conclusions about the suitability of different institutions to implement patent law flexibilities.

An Impersonation Theory of Trademark Law

Lisa P. Ramsey Professor of Law, University of San Diego School of Law [email protected] | Bio

When third parties use the trademarks of others without authorization in expression, they are often accused of trademark violations. For example, when the company Think Geek advertised a product called “Radiant Farms Canned Unicorn Meat” using the slogan “Unicorn—the new white meat” as part of an April Fools prank on its website, the National Pork Board sent a cease and desist letter claiming that Think Geek infringed and diluted its trademark rights in the slogan “The Other White Meat.” Bosley Medical sued Michael Kremer when he used the Bosley Medical mark in a domain name which linked to a cybergripe website where Kremer criticized the company. People for the Ethical Treatment of Animals convinced a court to enjoin Michael Doughney from using its PETA mark in the domain name www.peta.org which linked to Doughney’s “People Eating Tasty Animals” website. A court held anti-abortion/pro-life activist Richard Bucci could not use the Planned Parenthood mark in the domain name and content of a website that suggested the markholder was the source of the expression on the site. Nine West filed suit to stop an imposter from using its mark in a fake Nine West-Model Auditions group page on Facebook with the alias “Nine West Shoes” that solicited females interested in model auditions to send photographs of their faces, bodies, and toes with their contact information. This article argues that current trademark doctrines and theories do not adequately provide guidance on how to balance trademark rights and the right to freedom of expression in cases involving unauthorized use of another’s mark in expression. This article develops a new “impersonation theory” for resolving conflicts between trademark and free speech rights in disputes involving expressive uses of marks. It argues that impersonation of a trademark holder should be a necessary, but not sufficient, condition for trademark liability in cases involving unauthorized use of trademarks in expression.

Achieving Content Accessibility in Communications and Copyright Law

Blake Ellis Reid Staff Attorney and Graduate Clinical Fellow in First Amendment and Media Law Institute for Public Representation, Georgetown Law [email protected] | Bio | SSRN

“As it is hard to interest those who have everything in those who have nothing, so it requires incessant labor to win champions among the seeing for the sightless.” -Helen Keller

The goal of promoting the creation and dissemination of accessible versions of copyrighted works that can be fully experienced by people with disabilities poses a unique media policy conundrum. Notions of distributive justice suggest that copyrighted content, particularly mass market content, should be made available in accessible formats so its cultural and societal benefits can be enjoyed by people with disabilities on equal terms. But copyright and communications law—the primary instrumentalities of media policy—have proven ill-suited to fostering ubiquitous content accessibility.

In this work-in-progress, I offer a contemporary account of content accessibility from the perspective of copyright and communications policy. In doing so, I first analyze efforts by Congress and regulatory agencies—primarily, the Federal Communications Commission—to mandate accessibility for copyrighted content, focusing in particular on efforts to make video programming accessible to people who are deaf or hard of hearing with closed captioning and to people who are blind or visually impaired with audio description. In doing so, I review barriers to these accessibility efforts, including First Amendment theories of compelled speech and chilling effects, as well as jurisdictional limitations stemming from rapid technological changes in content creation, distribution, and accessibility mechanisms.

Second, I analyze efforts by people who are disabled and sympathetic third parties to make works accessible without the cooperation of copyright owners. I review barriers to these efforts that have been imposed by copyright law and paracopyright schemes, including the anti-circumvention measures of the Digital Millennium Copyright Act, and consider the shortcomings of domestic and international accessibility reform efforts.

In setting forth these analyses, I aim to provide a framework that comprehensively describes realized and likely potential limitations on both prescribed and permissive content accessibility efforts. In doing so, I hope to lay the groundwork for future work on positive agendas for content accessibility and the unique normative considerations for requiring and permitting accessibility efforts in the context of content.

Erez Reuveni Non-resident Fellow, Stanford Law School, Center for Internet and Society; Trial Attorney, Civil Division, United States Department of Justice [email protected] | Bio | SSRN

It is said that copyright law’s primary purpose is to encourage creativity by providing economic incentives to create. Accepting this premise, the primary disagreement among copyright stakeholders today concerns to what extent strong copyrights in fact provide efficient economic incentives. This focus on economic incentives obscures what is perhaps copyright doctrine’s greatest weakness – although the primary purpose of copyright law is to encourage creativity, copyright doctrine lacks even a rudimentary understanding of how creativity functions on a neurobiological level. The absence of a cohesive understanding of the science of creativity means that much of copyright theory is premised on antiquated assumptions regarding the creative process that have no basis in cognitive neuroscience or psychology and therefore do not in fact encourage creativity effectively from a scientific perspective.

This Article fills that void by developing a coherent narrative of how creativity functions on a neurobiological level and demonstrating how copyright law specifically and information policy generally play a largely unexplored role in determining how effectively the brain’s creative process – what I term the cognitive architecture of creativity – functions both internally and when interacting with the Internet and other informational environments. Relying on this narrative, the Article argues that creativity is not an isolated singular moment of genius as theorized by contemporary copyright doctrine, but rather the product of complex interactions between individuals within a larger cultural environment that, in turn, can trigger the brain’s creative process in the right circumstances. Copyright’s goal of encouraging creativity should therefore be understood as an environmental design question, with the brain’s creative process as that environment’s hub, and copyright law and information policy as design levers in engineering that environment. Relying on this framework, the Article concludes by suggesting modifications to copyright law and policy that foster a system where the brain’s cognitive architecture interfaces effectively with the Internet to achieve copyright’s core goal of encouraging creativity.

America’s First Patents

Michael Risch Associate Professor, Villanova University School of Law [email protected] | Bio | CV | SSRN

Courts and commentators vigorously debate early American patent history because of a spotty documentary record. To fill these gaps, scholars have examined the adoption of the Intellectual Property Clause of the Constitution, correspondence, dictionaries, and British and colonial case law. But there is one largely ignored body of information – the content of early patents themselves. While many scholars debate what the founders thought, no one asks what early inventors thought - and those thoughts are telling. This article is the first comprehensive examination of how early inventors and their patents should inform our current thoughts about the patent system.

To better understand our early patent history, we read every available patent issued prior to the institution of the “modern” examination system in 1836, totaling nearly 2,500 handwritten patents. For good measure, we also read the first 1,200 patents issued after 1836, the last of which issued in the middle of 1839.

Part I discusses how vague and ambiguous patents are relevant to early judicial discussion of "principles." In conjunction with misplaced reliance on English law, the patents suggest a different interpretation of “principles” in these cases. In short, patentable subject matter jurisprudence developed in a way that was not necessarily intended by the first Congress.

Part II discusses some noteworthy patents, including asbestos and lead paint, milk of magnesia, many business methods, and a programmable loom that predated Babbage's Analytical Engine. This might lead us to reconsider how we view technological change in the patent system.

Part III presents a surprising rebuttal to those who believe that the machine-or- transformation test is engrained in American inventive ethos. This test requires that, to be patentable subject matter, a claimed process must be performed by a machine or transform matter to a different state. Though the Federal Circuit formally introduced this test in 2008, courts and scholars present it as a “historical” limitation on patentable subject matter. Examination of the first fifty years of patents shows that forty percent of patented processes would have failed the machine-or-transformation test, whether or not the patents were tested by the Patent Office. Many method patents did not involve a machine and did not transform matter to a different state or thing.

The article concludes with some suggestions about how we might rethink patentable subject matter in light of America's first patents. Strength in Stickiness: A Creativity Theory of Trademark Law

Alexandra J. Roberts Visiting Assistant Professor, BU School of Law (Fall 2012) [email protected]

Trademark law is commonly understood to reward mark owners’ financial investments and aid marketplace efficiency by enabling reputation building and reducing search costs. While the patent and copyright regimes are designed to incentivize and protect creative ideas and their embodiment, the trademark regime ostensibly rewards only capital and ubiquity. But the prevailing treatment of trademarks ignores the fondness of courts, consumers, and trademark owners for sticky marks—trademarks that are by design informative, memorable, and appealing. The strongest marks employ metaphor and metonymy, assonance and consonance, personification and pun. Sticky marks achieve the stated goals of trademark law more effectively and efficiently than do arbitrary or fanciful marks, yet the latter categories are afforded the highest level of legal protection even though, or precisely because, they are devoid of any connotations prior to their use in commerce.

This paper considers the ways in which trademark law, in its current incarnation, justly rewards the investment of creative and intellectual capital. Drawing on and comparing data from the US Patent and Trademark Office, the Trademark Trial and Appeals Board, and federal case law, it highlights the inconsistent and often illogical ways in which marks trademark examiners and courts assign marks to Abercrombie categories, which are often outcome-determinative, and proposes a model that better reflects how marks function and from where their value derives.

Alexandra J. Roberts will join the faculty of BU School of Law for the 2012-2013 academic year as a Visiting Assistant Professor, teaching Trademarks & Unfair Competition. She researches and writes primarily in the areas of Intellectual Property and Law and Literature. Her work has been published in the Texas Law Review, the Yale Journal of Law & Technology, IDEA: the Intellectual Property Law Review, and the Trademark Reporter. She is currently an associate in the Boston office of Ropes & Gray LLP, where she practices in the firm’s IP Litigation group.

PROTECTING AMERICA’S TRUE INNOVATORS

W. Keith Robinson Assistant Professor, SMU Dedman School of Law [email protected]

Statistics indicate that in the past several years patents granted to small entities have declines significantly. In the wake of this decline, the U.S. Patent system has recently undergone significant changes. For example, the United States Patent Office recently introduced a five-year strategic plan. In addition, the Leahy-Smith America Invents Act (“AIA”) was signed into law on September 16, 2011. Unfortunately, the implementation of new patent policies may have a negative impact on small entities. There is significant evidence that small entities developed several of the most important major innovations in the past forty years. However, the combination of the decline in patenting and less than favorable patent policy threatens the ability of small entities to continue to make similar contributions to the country. For example, in a recent article, Abrams and Wagner use Canadian data to empirically predict that the shift from a “first-to-invent” to “first-to-file” system will result in a significant drop in the number of patents granted to small inventors. While Abrams and Wagner focus on the “first-to-file” system, this article analyzes the new policies that may affect small entities once an applicant’s application is “in the system.” This article shows that the prosecution process puts small entities at a disadvantage in comparison to large entities. Further, the new procedures implemented because of the AIA at best maintain the status quo regarding patent prosecution and most likely will further harm small entities. The analysis includes an empirical study of data concerning MPEP 708.02(XII), which was a provision that allowed small entities filing biotech applications to take advantage of swifter examination. There is evidence to suggest that implementing a similar procedure may yield beneficial results for small entity applicants. In response, this article suggests several small procedural and/or legal modifications to the prosecution process. The goal of these modifications is to balance the USPTO’s desire to optimize patent quality and timeliness with the goal of increasing the number of filed patent applications that are granted to small entities.

Fear and Loathing and Intellectual Property

Betsy Rosenblatt Assistant Professor and Director Center for Intellectual Property Law Whittier Law School [email protected] | Bio

This paper investigates two significant intersections between intellectual property protection and shame. First, social shaming shapes the behavior of certain would-be copiers (who “fear” community reprisal in norms-based communities without formal intellectual property protection). Second, public shaming informs the activities of certain would-be enforcers (who wish to avoid the “loathing” of consumers who cabin perceived over-enforcement by condemning aggressive rightsholders as copyright and trademark bullies and patent trolls). These two shaming effects may have opposing results—on one hand, restriction on copying, and on the other, freedom to copy—but they unite to establish and enforce intellectual property “negative spaces” where innovation and creation thrive without significant formal intellectual property protection or enforcement. In areas beyond the reach of formal intellectual property protection, social shaming often provides informal or norms-based boundaries for copying that replicate formal intellectual property protection or vary from formal systems in ways tailored to suit a particular creative community. In areas reached by formal intellectual property protection, public shaming often provides incentives for rightsholders to forbear from enforcing their rights, creating bubbles of “productive infringement.” The result of these effects is an overlay of shame-driven behavior that sits atop, and informally adjusts, the boundaries of formal intellectual property protection. This, in turn, requires us to adjust our thinking about the ideal boundaries of formal protection.

Abstract: Copyright Through a Liberty Lens

Jennifer E. Rothman Associate Professor Loyola Law School (Los Angeles) [email protected]

In an effort to stem the tide of ever-expanding intellectual property rights and to establish some affirmative constitutional basis for using intellectual property ostensibly owned by others, scholars have often turned to the First Amendment. This approach has almost universally failed to convince courts and has little to offer individuals engaged in personal, rather than political or cultural, expression. In this article, Professor Rothman proposes a paradigm shift away from the First Amendment and toward an alternative constitutional model for determining when uses of copyrighted works should be permitted. The broader understanding of substantive due process and the liberty interest set forth by the Supreme Court in Lawrence v. Texas provides a fresh opportunity to consider the role of due process analysis in the context of copyright law. Rothman’s approach provides a strong justification for protecting uses that are tightly connected with an individual’s identity. Even though a liberty analysis would likely protect fewer uses than a First Amendment approach might (if it were ever embraced), the constitutional grounding for these liberty-based uses would be much more robust.

Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

Jennifer E. Rothman∗

Abstract

Table of Contents Introduction I. The First Amendment Fallacy A. Copyright as an Exception to Free Speech B. Incorporation of Speech-Protective Features C. Copyright as the “Engine of Free Expression” D. The Democratic Society Justification 1. The Personal is Not Political 2. Discounting Expression 3. Transformative Uses II. The Substantive Due Process and Liberty Turn

∗ Associate Professor, Loyola Law School (Los Angeles). Email: [email protected] or [email protected].

1 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

A. The First Amendment/Free Speech Approach 1. Property v. Speech 2. Speech v. Speech B. The Liberty Approach 1. Property v. Liberty 2. Speech v. Liberty 3. Liberty v. Liberty 4. Other Advantages of the Liberty Approach III. Privileged Uses Under The Liberty-Based Theory A. Music as the Soundtrack of Life B. Autobiographies and “Private” Letters C. Diary of A Copyright Encountered D. Religious Texts IV. Implications and Limitations A. Some Limitations B. Some Implications 1. Liberty-Based Uses Do Not Require Permission 2. Generally Without Payment 3. Entire Works Can be Used 4. As Applied v. Facial Challenges 5. Rights Beyond Contract 6. Reconceptualizing Fair Use? Conclusion

Introduction

Scholarship in the intellectual property field often focuses on when people should be able to access, use and alter intellectual property (“IP”) owned by another without legal liability for infringement. Much of this scholarship, particularly in the copyright arena, has focused on the First Amendment as the last and best protection of use rights when doctrines internal to IP law and the Progress Clause1 fail to insulate users from liability. Even though there have been ever-increasing calls by scholars for greater

1 U.S. CONST., Art. I, Sec. 8 provides that “Congress shall have power to . . . [p]romote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” I use the term “Progress Clause,” as have some others, because it best expresses the intent and language of the clause and also because nowhere does the clause expressly provide for either “copyrights” or “patents.”

2 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

First Amendment scrutiny in copyright cases,2 there has been a virtually unrelenting rejection of this approach by the courts. Scholars and advocates continue to beat the First Amendment drum despite the Supreme Court’s decision in Eldred v. Ashcroft3 which greatly limited an already hobbled First Amendment defense in copyright cases.4 Since Eldred, most courts do not even feign engagement with First Amendment analysis in copyright cases,5 and even before Eldred the First Amendment had little success as an independent defense in such cases.6 In this article, I consider a paradigm shift away from using the First Amendment to evaluate uses of copyrighted works and toward a different, but still constitutionally-grounded theory – a substantive due process, liberty-based one. While a liberty analysis would likely protect significantly fewer uses than a First

2 See, e.g., Neil Weinstock Netanel, Locating Copyright Within the First Amendment Skein, 54 STAN. L. REV. 1 (2001); Lawrence Lessig, Copyright’s First Amendment, 48 UCLA L. REV. 1057, 1061-67 (2001); Paul Goldstein, Copyright and the First Amendment, 70 COLUM. L. REV. 983, 990, 998, 1001 (1970); Melville B. Nimmer, Does Copyright Abridge the First Amendment Guarantees of Free Speech and Press?, 17 UCLA L. REV. 1180 (1970); see also infra note . 3 537 U.S. 186 (2002). 4 Id. For some recent examples of the continued reliance on the First Amendment in copyright scholarship, see, e.g., Edward Lee, Freedom of the Press 2.0, GA. L. REV. (2008); Alan E. Garfield, The Case for First Amendment Limits on Copyright, 35 HOFSTRA L. REV. 1169 (2008) ; Malla Pollack, A Listener’s Free Speech, A Reader’s Copyright, 35 HOFSTRA L. REV. 1457 (2008); Mark P. McKenna, The Rehnquist Court and the Groundwork for Greater First Amendment Scrutiny of Intellectual Property, 25 WASH. U. J. L. & POL’Y 11 (2006); John Tehranian, Whither Copyright? Transformative Use, Free Speech, and an Intermediate Liability Proposal, 2005 BYU L. REV. 1201 (2005); Rebecca Tushnet, Copy This Essay: How Fair Use Doctrine Harms Free Speech and How Copying Serves It, 114 Yale L.J. 535 (2004). 5 One recent exception is the Tenth Circuit decision in Golan v. Gonzales, 501 F.3d 1179 (10th Cir. 2007) which permitted a First Amendment challenge to the restoration provision enacted as a result of the Uruguay Rounds Agreement Act. Golan should not provide much hope for proponents of the First Amendment. First, two other Federal Courts of Appeal have disagreed with Golan and instead concluded that the First Amendment does not preclude the restoration of previously public domain works. See Kahle v. Gonzales, 487 F.3d 697 (9th Cir. 2007) cert. denied; Luck's Music Library, Inc. v. Gonzales, 407 F.3d 1262 (D.C. Cir. 2005), cert. denied. Second, even if the Supreme Court ultimately concludes that the restoration of copyright protection to public domain works violates the First Amendment, such a holding would have minimal impact in individual infringement cases and most facial challenges to copyright laws. 6 See infra note .

3 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

Amendment approach might (if it were ever embraced by courts), the protection would be more robust for these liberty-based uses. The liberty approach shifts the focus from whether the public has a privilege to use, view or access copyrighted material to whether an individual has a right to do so. I contend that if the use of a copyrighted work is integral to an individual’s identity then he or she has the right to use, without permission, another’s copyrighted work. What do I mean by identity and for a copyrighted work to be integral to that identity? Producing a complete definition of identity is challenging,7 and not necessary for my purposes. Identity at its heart revolves around our understanding of ourselves whether individually or in the context of broader socio-cultural groups to which we belong.8 Regardless of the myriad nuances of defining identity, at a minimum one’s identity is composed of one’s life history, important life-changing or psychologically-altering experiences, and one’s beliefs and values. Each person’s life, both past and present, is intertwined with copyrighted materials and therefore one’s identity is also wrapped up with copyrighted works.

7 Identity has been used in the social sciences and humanities to mean many different things. See, e.g., Rogers Brubeck and Frederic Cooper, Beyond “Identity,” 29 THEORY AND SOCIETY 1 (2000) (contending that the term identity means so many things and is so ambiguous that perhaps it should be discarded); Ted C. Llewellyn, The Anthropology of Globalization (2002) (“Part of the problem with defining ‘identity’ is that the term applies to at least three different concepts: first, how the individual perceives himself; second, how the person is popularly perceived; and third, how the individual is perceived by the social scientist). Philosophers use identity to mean sameness and focus on issues like cloning and how to tell if a person is the same if her appearance or other attributes have changed. See, e.g., E.J. Borowski, Identity and Personal Identity, 85 MIND 481 (1976). Social psychologists often consider identity in terms of self-categorization or group-categorization. See, e.g., Jan E. Stets and Peter J. Burke, Identity Theory and Social Identity Theory, SOCIAL PSYCHOLOGY QUARTERLY (2000) (describing the differences between identity theory and social identity theory). Not surprisingly legal scholars also have not agreed on what we mean by “identity.” Amartya Sen has defined identity as “how [a] person sees himself or herself. We all have many identities, and being "just me" is not the only way we see ourselves. Community, nationality, class, race, sex, union membership . . ., and so on, all provide identities that can be, depending on the context, crucial to our view of ourselves….” Amartya Sen, Goals, Commitment and Identity, 1 J. OF L., ECON.& ORG. 341, 348 (1985). Nan Hunter has referred to “identity” as “a multilayered concept [that] encompasses explanation and representation of the self.” Nan D. Hunter, Identity, Speech & Equality, 79 VIRG. L. REV. 1695, 1696 (1993). 8 See supra note .

4 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

Identity-based uses of copyrighted works should be protected not because they are private (rather than public) or non- profit (rather than commercial) as some have suggested,9 but instead because the specific uses are so integral to an individual’s identity that to deny their use would be to deny a person the ability to express, document or engage with herself and her lived experiences. Consider in the following examples what I mean by such identity-based uses of copyrighted works. The first example involves a woman who plays Journey’s “Don’t Stop Believin’” on a loop on her publicly accessible blog (her online diary) related to one particular entry that describes the painful experience of her being raped. The Journey song had been playing in the background of the car in which she was assaulted. Her blog entry and the playing of the music in conjunction with the text is part of her coping process. Suppose the band objected to her public performance and copying (to a digital format) of its copyrighted composition, lyrics and performance. Under current copyright law, she would likely be liable for copyright infringement. Her use would, however, be protected by my proposed liberty framework - - her use is an identity-based one in which she is describing and engaging with her own lived experiences, experiences that incorporate copyrighted works. The next example involves Samantha Ronson, the current girlfriend of paparazzi magnet and actress, Lindsey Lohan. The paparazzi recently caught Lohan and Ronson kissing in a nightclub and published a photograph of the two of them. Ronson subsequently posted the photo to her MySpace page.10 Under copyright law she violated the photographer’s copyright by posting his picture without permission. Neither the fair use doctrine nor the First Amendment provides Ronson a dependable defense, but a liberty interest approach establishes Ronson’s right to post a picture documenting her own life on her own webpage. Finally, consider the publication of Anais Nin’s diaries which contain extensive passages from letters written to her, including many from the prominent author, Henry Miller. Suppose

9 See, e.g., Litman; . 10 Accessible at http://viewmorepics.myspace.com/index.cfm?fuseaction=user.viewPicture&friend ID=40137611&albumId=162359

5 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. that Henry Miller or his estate had sought to enjoin the publication of Nin’s diaries because of the inclusion of his copyrighted letters. Again, current copyright law would likely have prevented Nin from going forward without Miller’s permission. Under the liberty framework Nin would be insulated from a copyright infringement claim because the letters that he wrote to her had become part of her identity and accordingly their use can not generally be restricted when her motivation in publishing them was to document or explore her own experiences. In each of these instances copyrighted works have become interwoven with individual’s lives, and the uses document (the paparazzi photo on MySpace), contextualize (sharing received letters), or reframe (the song on the blog) these experiences. When the reality of an individual’s life or identity is so inextricably tied up with a copyrighted work, a liberty interest (whether located in the due process clause of the Fifth Amendment or the speech protections of the First Amendment) should stand in the way of the enforcement of copyright law. The Supreme Court’s recent decision in Lawrence v. Texas11 opens the door to considering the applicability of substantive due process and liberty rights in the context of IP. Although Lawrence involved intimate association and has no direct application to IP, its movement away from privacy-based rights and toward a broader, more robust, liberty-based understanding of individual rights provides a foundation for scrutinizing limits on individual autonomy in a variety of contexts.12 Although the Supreme Court has concluded that one does not have a First Amendment “right to make other people’s speeches,”13 a liberty analysis demonstrates that one should have a right to use someone else’s IP to express one’s own lived experiences. Such an approach is justified not by the furtherance of a political, democratic dialogue (the standard requirement of the dominant First Amendment analysis), but rather as a fundamental expression of who one is.

11 539 U.S. 558 (2003). See discussion infra Part IV.B.4. 12 See Lawrence, 539 U.S. 558.; see also Laura A. Rosenbury & Jennifer E. Rothman, Beyond Intimacy (2008) (draft on file with authors). As I will discuss, Lawrence is not wholly novel in so concluding, but in many ways is a look back to an earlier understanding of “liberty.” See discussion infra Part III. 13 Eldred, 537 U.S. at 221.

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The shift in perspective that I suggest is not simply a theoretical matter, but is likely to have a significant impact given the shifting landscape of copyright law and copyright infringement actions. Increasingly, areas once thought outside the likely scope of copyright enforcement such as personal and private uses are coming under scrutiny. Technological advances in digital rights management (“DRM”) make it possible to control what copying individuals do and the Digital Millennium Copyright Act (“DMCA”) makes most efforts to circumvent such technological devices and mechanisms illegal. Statutory damages for copyright infringement have greatly increased – now $150,000 per incident – and copyright infringement and circumvention of digital rights management devices are both criminal offenses.14 Criminal penalties for using copyrighted and non-copyrighted expressive works are likely to increase.15 These stiffer penalties mean that an individual who is using another’s copyright even in a non-profit, localized capacity has much to lose if caught and found to have committed infringement. Gone are the days when minor copyright infringements went unpunished and undetected. We have already begun to see this in the suits filed against individual file sharers.16 As more and more interaction with copyrighted materials occurs online, we will increasingly see such actions against individuals because technology now can track these uses.17

14 17 U.S.C. §§ 504(c), 506(a); 18 U.S.C. § 2319. 15 See, e.g, U.S. v. Martignon, 492 F.3d 140 (2d Cir. 2007) (upholding Congressional authority to enact criminal bootlegging statute in excess of authority under Progress Clause) (the court did, however, remand for consideration of whether law was barred by First Amendment or Due Process Clause); (add proposed criminal IP divisions at DOJ). 16 See, e.g., Arista Records LLC v. John Does 1-19, 551 F. Supp. 2d 1 (D.D.C. 2008); London-Sire Records, Inc. v. Doe 1, 542 F. Supp.2d 153 (D.Mass. 2008); Sony Music Entertainment Inc. v. Does 1-40, 326 F. Supp.2d 556 (S.D.N.Y. 2004). More than 29,000 individuals have been sued for using the Internet to exchange music and movies since 2003. Austin Wright, College Ordered to Give Up Names of Students, VIRGINIA PILOT & LEDGER-STAR, June 21, 2008. Even more individuals have received warning notices of copyright infringement with offers of settlement. Tens of thousands of cease and desist letters have been sent and since 2007 more than 7000 college students have received such letters. Id; see also Susan Butler, Casting the Net: the RIAA Provides an Inside Glimpse into its Battle Against Illegal File Sharing, BILLBOARD 10 (June 14, 2008). 17 There are numerous companies, such as Mediasentry and Audio Magic, that provide fingerprinting technology that can track uses of copyrighted songs and videos to

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Many uses of copyrighted works that previously had been private in nature are becoming more public and therefore are increasingly at risk of being shut down or punished by the copyright system. This happens, for example, through MySpace and Facebook type websites, where personal diaries are made public or at least public to one’s “friends,” as well as through blogs and other online postings that describe people’s experiences in ways similar to more private diaries of yore. In such online venues, individuals regularly incorporate copyrighted works, such as art and music, that they have encountered in living their lives and that have become meaningful to them. It is only a matter of time before suits are filed against individuals for using copyrighted works on MySpace and Facebook pages where visual collages and music are often included without permission from copyright holders. In fact, MySpace has already been sued by the recording industry on a contributory and vicarious liability theory for facilitating the “unlawful” use of copyrighted music by its members.18 In recent years, a number of scholars have begun to worry about the enforcement of copyright law against such “personal uses.” They have primarily relied on arguments internal to copyright law or its history to justify their position– a controversial position and one not likely to be greeted with much success in the courts or legislature.19 Moreover, even those who have supported a copyright-free zone for personal uses have generally limited uses to those which are private and non-commercial.20 My criticism of the personal use literature is not only that it is too narrow, but also that it is too broad. Making private uses a copyright-free zone risks destroying markets by providing too much room for unpaid uses of copyrighted works. If any one can download a song without payment for personal use, why would anyone pay for a song? Perhaps some altruistic downloaders specific files and sources. See, e.g.,. Butler, supra note . There are also software and services that monitor the copying of text. 18 See, e.g., Complaint, UMG Recordings, Inc. v. MySpace, Inc., No. CV 06-07361 (C.D. Cal.) (Nov. 17, 2006). A number of suits have also been filed against YouTube on similar theories. 19 See, e.g., Litman, Rethinking Copyright, supra note ; Litman, Lawful Personal Uses, supra note . 20 See, e.g., Jessica Litman, Rethinking Copyright (2008) (draft on file with author); Litman, Lawful Personal Uses, supra note .

8 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. would actually pay for music (as we saw when the band Radiohead enacted a pay-what-you-think-the-album-is-worth scheme), but once an entitlement to personal downloads is established even the likes of Radiohead aren’t likely to see much cash coming in from fans. The greatest disappointment of the personal use literature, however, is that it fails to provide a broader theory for why personal uses should be exempted from copyright enforcement. A more compelling theoretical foundation is necessary if a zone of protected personal uses is going to hold up under Congressional or judicial scrutiny. Such a theoretical underpinning will also help to differentiate between personal uses that should be permitted and those which should not. Part I of the article considers why the First Amendment approach that has dominated copyright scholarship has not lived up to its hype. I develop three primary theories for why the First Amendment has generally been rejected in copyright cases. First, copyright has traditionally been viewed as an exception to the First Amendment. Second, copyright has a number of built-in speech protections that have been considered to adequately represent free speech interests. Finally, copyright has been viewed as the “engine of free expression,” 21 and accordingly the First Amendment and copyright law are treated as a symbiotic pair working together towards the same goal of promoting more speech. I conclude this Part with some thoughts on why – even if the First Amendment approach were more successful – it would provide little protection for the identity-based uses that I contend would be insulated by a liberty-based approach. In Part II, I develop my theory of why a due process, liberty interest paradigm provides a stronger foundation for use rights than a free speech approach does. Under the First Amendment paradigm speech is often compared to speech, and users generally lose out because copyright is viewed as generating more speech overall. In contrast, when the paradigm shifts to one focused on liberty, users’ rights become paramount over competing speech, property and even liberty interests of the copyright holders. The central liberty involved in identity-based uses of copyrighted works revolves around the freedom of a person not the freedom of speech

21 Harper & Row Publishers v. Nation Enters., 471 U.S. 539 (1985).

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– what is being said is much less important than why it is being said or by whom. In Part III, I consider specific categories of uses of copyrighted works that I contend should be privileged under this liberty approach. In particular, I focus on uses of copyrighted works that are integral to constructing one’s personal identity. In the IP context, liberty stands for the right of individuals to describe and share their own lives, express their emotions and to publicly communicate the expression of personally significant copyrighted works. In particular circumstances, the use of copyrighted works is simply an effort to express oneself – either one’s historical past or some other facet of one’s identity. I consider a number of non- exclusive examples of how copyrighted works form part of our personal identity – specifically in the context of music, personal letters, diaries, and religious texts. In each case, the uses identified are at risk of copyright infringement liability under the current system, but I contend that they should not be because of their integral relationship to an individual’s constitutionally-guaranteed liberty interest. In Part IV, I address some limitations and implications of this liberty-based approach. In particular, I conclude that for this narrow set of identity-based uses no permission nor payment need be made and entire works may be used. I also suggest some implications of the liberty-based approach for DRM, the DMCA’s anti-circumvention provisions and contracts limiting use rights.

I. The First Amendment Fallacy

The vast majority of scholarship related to the constitutional dimensions of copyright law has focused on its relationship to the First Amendment.22 The First Amendment has been the primary

22 See, e.g., C. Edwin Baker, First Amendment Limits on Copyright, 55 VAND. L. REV. 891 (2002); Jed Rubenfeld, The Freedom of Imagination: Copyright’s Constitutionality, 112 YALE L.J. 1 (2002); Neil Weinstock Netanel, Locating Copyright Within the First Amendment Skein, 54 STAN. L. REV. 1 (2001); Lawrence Lessig, Copyright’s First Amendment, 48 UCLA L. REV. 1057, 1061-67 (2001); Mark A. Lemley & Eugene Volokh, Freedom of Speech and Injunctions in Intellectual Property Cases, 48 DUKE L.J. 147, 206 (1998); Robert C. Denicola, Copyright and Free Speech: Constitutional Limitations on the Protection of Expression, 67 CAL. L. REV. 283 (1978); Paul Goldstein, Copyright and the First Amendment, 70 COLUM. L. REV. 983, 990, 998, 1001 (1970); Melville B. Nimmer, Does Copyright Abridge the First Amendment

10 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. avenue for proponents of users rights to provide a constitutional and theoretical basis for limiting the scope of copyright holder’s privileges. This approach has continued to dominate copyright scholarship despite its unequivocal failure to convince courts over a nearly forty-year period. Courts have long rejected independent First Amendment scrutiny in copyright cases, and the Supreme Court’s recent decision in Eldred v. Ashcroft23 virtually slammed the door shut on First Amendment review.24 Although the Court in Eldred suggested that “copyrights are [not] categorically immune from challenges under the First Amendment,”25 the space the Court left open for independent First Amendment challenges is quite small. Only when “Congress has altered the traditional contours of copyright protection” is any further First Amendment scrutiny merited. The Supreme Court did not give examples of what it meant by traditional contours, though one might reasonably conclude that a copyright statute that

Guarantees of Free Speech and Press?, 17 UCLA L. REV. 1180 (1970). A few scholars have expressed concern over conflicts between copyright law and free speech interests, but have proposed remedies unrelated to the First Amendment. See, e.g., L. Ray Patterson, Free Speech, Copyright, and Fair Use, 40 VAND. L. REV. 1 (1987) (criticizing the move towards treating copyright law as proprietary rather than regulatory regime). I note that a few recent articles have focused on internal limits in the Progress Clause itself, as well as that Clause’s relationship to the Commerce Clause. See, e.g., Thomas B. Nachbar, Intellectual Property and Constitutional Norms, 104 COLUM. L. REV. 272 (2004) (considering the possibilities of passing more expansive copyright protection through the Commerce Clause); Paul M. Schwartz & William Michael Treanor, Eldred and Lochner: Copyright Term Extension and Intellectual Property as Constitutional Property, 112 YALE L.J. 2331 (2003) (contending that courts should review copyright laws with great deference to Congress); Paul J. Heald & Suzanna Sherry, Implied Limits on the Legislative Power: The Intellectual Property Clause as an Absolute Constraint on Congress, 2000 U. ILL. L. REV. 1119 (2000) (viewing the Progress Clause as setting forth absolute limits on the scope of copyright law). 23 537 U.S. 186 (2002). 24 Eldred, 537 U.S. 186. Courts after Eldred with one notable exception, Golan v. Gonzales, 501 F.3d 1179 (10th Cir. 2007), have all rejected independent First Amendment review in copyright cases. See, e.g., Chicago Bd. of Education v. Substance Inc., 354 F.3d 624, 631 (7th Cir. 2003) (“The First Amendment adds nothing to the fair use defense.”); see also Kahle v. Gonzales, 487 F.3d 697 (9th Cir. 2007) (rejecting First Amendment challenge to restoration of copyright to public domain works) cert. denied; Luck's Music Library, Inc. v. Gonzales, 407 F.3d 1262 (D.C. Cir. 2005) (same), cert. denied. See also Netanel, Locating Copyright, supra note at 3 (noting in 2002 that First Amendment defenses had been “summarily rejected” in copyright cases). 25 Eldred, 537 U.S. at (quoting) Eldred v. Reno, 239 F.3d 372, 375 (D.C. Cir. 2001).

11 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. protected ideas or facts or perhaps eliminated the fair use defense would merit First Amendment scrutiny.26 My goal with this section is to consider some of the reasons the First Amendment has failed both to protect individual users and to limit statutory expansions to copyright law. The First Amendment has generally been rejected in copyright cases for three primary reasons. First, copyright has traditionally been viewed as an exception to the First Amendment. Second, copyright has a number of built-in speech protections that have been considered to adequately represent free speech interests. Finally, copyright has been viewed as the “engine of free expression,” 27 and accordingly the First Amendment and copyright law are treated as a symbiotic pair working together towards the same goal of promoting more speech. I conclude this discussion of the First Amendment with some thoughts on why – even if the First Amendment approach were more successful – certain types of uses, ones that a liberty-based approach might protect, would still be left out in the cold.

A. Copyright as an Exception to Free Speech

Copyright law unquestionably restricts what we are permitted to say and do; after all, it substantially limits our ability to speak (or display or sing) the copyrighted words (or images or music) of others without permission.28 Nevertheless, courts have rarely considered whether copyright runs afoul of the First Amendment. One of the main reasons for this is that copyright law has often been considered an exception to the free speech protections of the First Amendment. This understanding explains

26 The recent decision in Golan suggests that perhaps resurrection of copyrighted works from the public domain is another such example, although two federal courts of appeal have concluded otherwise. See, e.g., Kahle v. Gonzales, 487 F.3d 697 (9th Cir. 2007); Luck's Music Library, Inc. v. Gonzales, 407 F.3d 1262 (D.C. Cir. 2005). 27 Harper & Row Publishers v. Nation Enters., 471 U.S. 539 (1985). 28 Several scholars have highlighted this obvious, though often overlooked, proposition. See, e.g., Jed Rubenfeld, The Freedom of Imagination: Copyright’s Constitutionality, 112 YALE L.J. 1 (2002) (contending that copyright law imposes content-based speech restrictions deserving of strict scrutiny); C. Edwin Baker, First Amendment Limits on Copyright, 55 VAND. L. REV. 891 (2002) (same); Mark A. Lemley & Eugene Volokh, Freedom of Speech and Injunctions in Intellectual Property Cases, 48 DUKE L.J. 147, 206 (1998) (same).

12 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. both the dearth of scholarly interest in the subject until the late 1960s,29 and also the continued hesitancy of courts to provide more searching First Amendment review. The temporal proximity of the adoption of the Progress Clause, the First Amendment and the first copyright act suggests that the Founders did not see any conflict between the two constitutional clauses.30 This historical comfort continues to heavily influence the courts, as evidenced by the Supreme Court’s recent description of copyright law and the First Amendment as having a “definitional balance.”31 Even apart from the historical reconciling of the two constitutional clauses there are other reasons why copyright law has been deemed an exception to free speech. Although the language of the First Amendment seems absolute,32 it has never been so interpreted by the courts and even scholars who have argued for more absolute free speech protections have placed significant limits on their theories.33 There have long been a

29 Early treatises and histories of copyright law (as well as more recent ones) simply did not address the issue. See, e.g., Lyman Ray Patterson, COPYRIGHT: A HISTORICAL PERSPECTIVE (1968); Horace G. Ball, LAW OF COPYRIGHT AND LITERARY PROPERTY (1944); Richard C. DeWolf, AN OUTLINE OF COPYRIGHT LAW (1925); Arthur W. Weil, AMERICAN COPYRIGHT LAW (1917); Eaton S. Drone, A TREATISE ON THE LAW OF PROPERTY IN INTELLECTUAL PRODUCTIONS (1879). Some scholars implicitly considered dangers to free expression, but none to my knowledge considered bringing the First Amendment to bear. See, e.g., Ralph R. Shaw, LITERARY PROPERTY IN THE UNITED STATES (1950) (expressing concern over possible dangers to academic freedom). 30 The draft of the Constitution was completed in 1787 and ratified by all 13 states by 1790. The Bill of Rights, including the First Amendment, was finished in 1789 and ratified in 1791. The first copyright act was passed in 1790. 1 Stat. 124; 1st Cong., 2d Sess., c. 15 (May 31, 1790). To date there is no evidence that there was any debate or concern regarding the interplay of the two provisions. One possible explanation for this oversight that I will not discuss in detail here is that for many years the focus of copyright development was on whether the right should exist at all, with whom it should vest (authors or publishers) and whether the right was a natural one – protected by common law – or only a statutory privilege. Changes in copying technology and the expansion of the scope of statutory copyright law no doubt have driven scholars from the late 1960s to today to consider potential conflicts between the First Amendment and copyright law that were not as apparent in 1790. 31 Eldred, 537 U.S. at 219. 32 U.S. CONST. Amdt 1. 33 See, e.g., Alexander Meiklejohn, FREE SPEECH AND ITS RELATION TO SELF- GOVERNMENT (2001 ed.) (first published in 1948) (contending that political speech deserved absolute protection, but other speech deserves less absolute protection under a liberty analysis contained within either the Fifth or Fourteenth Amendments).

13 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. variety of exceptions to speech protections, such as for obscenity, fighting words, true threats, incitement, and child pornography.34 Copyright and other IP laws have often been viewed as one of these categorical exceptions to the First Amendment.35 Even Justice Douglas, one of the great proponents of free speech, pointed to copyright law as the only constitutional route for state-sponsored censorship.36 A discussion of why we have such exceptions and what the justifications for these exceptions are is outside the scope of this article; I briefly note, however, two of the most common explanations. The first is that categories of unprotected speech are considered of no or low value. For example, defamatory speech generally sits outside the First Amendment’s protections because the statements at issue are false and therefore valueless.37 Similar arguments have been made about uses of another person’s copyrighted work; in particular, that using another’s copyrighted work has little value because someone else’s speech is being made. Accordingly, no new ideas have entered the marketplace of ideas. A second explanation for speech exceptions is simply that for a given category of speech pressing competing public goals are so well established that a categorical, rather than an individual, speech exception has been made. The exceptions for true threats and incitement are good examples of such categorical determinations.38 In the context of copyright law the argument for a categorical exception is that as a society we are better off with the

34 See, e.g., Brandenburg v. Ohio, 395 U.S. 444 (1969) (incitement is exception to First Amendment); Roth v. United States, 354 U.S. 476 (1957) (obscenity is categorical exception to First Amendment); Chaplinsky v. New Hampshire, 315 U.S. 568 (1942) (fighting words are an exception to the First Amendment); Jennifer E. Rothman, Freedom of Speech and True Threats, 25 HARV. J. L. PUB. POL’Y 283 (2001) (discussing the speech exception for true threats and when threats should be categorized as “true”). 35 See, e.g., Eugene Volokh, THE FIRST AMENDMENT AND RELATED STATUTES, PROBLEMS, CASES AND POLICY ARGUMENTS (2nd ed 2005). 36 U.S. v. 12, 200 Ft. Reels of Super 8mm Film, 413 U.S. 123, 130-31 (1973) (Douglas, J., dissenting). Justice Douglas suggested, however, that some First Amendment review remained even in copyright cases. 37 I note, however, that at least as to public figures to prevent a chilling effect on the press, the Supreme Court has limited liability even for falsehoods if they were not printed with actual malice (i.e. knowledge or reckless disregard as to the statements’ veracity). See New York Times v. Sullivan, 376 U.S. 254 (1964). 38 Rothman, True Threats, supra note .

14 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. incentives that copyright provides to creators even though some speech is sacrificed in the process.39 I do not think that copyright was meant to be a categorical exception from the First Amendment. It’s scope is simply too wide to leave unmonitored by free speech concerns. At the same time, I do not think it is possible that the First Amendment was intended to shut down copyright law. Accordingly, there must be some balance reached between copyright law and free speech concerns. Such a balance must mean something more than the “definitional balance” proposed by the Supreme Court because a definitional balance means that the two bodies of law are already balanced by definition and no further scrutiny is required – except perhaps if the definition of copyright itself is changed.40

B. Incorporation of Speech-Protective Features

Even though scholars have generally rejected the exceptionalist approach, their efforts to read both constitutional provisions together has lead to a number of conclusions that make First Amendment review unlikely. The first conclusion is that copyright law has a number of built-in speech protection that are sufficient in almost every instance to address First Amendment concerns.41 These incorporated speech protections include the idea- expression dichotomy, the lack of protection for facts, and the fair use doctrine.42 The idea-expression dichotomy sets forth the principle that copyright only protects the expression of ideas, not the underlying concepts. For example, anyone is free to write a story about a school for young wizards but if the details and plot

39 See discussion infra Part I.C. 40 The “traditional contours” discussion in the opinion is likely limited to such defintional alternations in copyright law. 41 See, e.g., Paul Goldstein, Copyright and the First Amendment, 70 COLUM. L. REV. 983, 990, 998, 1001 (1970); Melville B. Nimmer, Does Copyright Abridge the First Amendment Guarantees of Free Speech and Press?, 17 UCLA L. REV. 1180 (1970); but see Note, Lionel S. Sobel, Copyright and the First Amendment: A Gathering Storm? 19 COPYRIGHT L. SYMPOSIUM 43 (published 1971) (written & submitted to competition in1969) (criticizing the speech-protective fair use decisions in Rosemont and Geis and viewing copyright simply as an exception to the First Amendment). 42 17 U.S.C. §§ 102(b), 107; Feist Publications v. Rural Tel. Serv. Co., 499 U.S. 340 (1991). The seminal common law articulation of the fair use defense can be found in Folsom v. Marsh, 9 F.Cas. 342 (D. Mass. 1841).

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(i.e. the expression) get too close to Hogwarts from the Harry Potter series then copyright law will come into play. One can copy underlying facts, but one cannot copy the original selection and arrangement of these facts.43 The fair use doctrine provides an exception or defense to copyright infringement for certain uses deemed “fair.” The doctrine is codified in Section 107 of the Copyright Act which sets forth four factors that courts must consider when evaluating uses.44 The first factor considers the purpose of the use, particularly whether it is for profit or not, as well as whether the use is transformative. The second factor considers whether the underlying work merits thick or thin copyright protection. The third factor considers the “amount and substantiality” of the material used by the defendant. The fourth and final factor considers the impact of the use on the market or value of the copyrighted work. Numerous concerns have been raised about the adequacy of these built-in doctrines. I will only briefly mention a few here. First, ideas and facts can not always substitute for expression.45 Sometimes the expression itself is the idea or fact at issue or the idea can simply not be separated from its expression. It is difficult to imagine, for example, how one could adequately describe T.S. Elliot’s poem The Wasteland using only its ideas and facts. A room full of English professors could not even agree on the facts, let alone the ideas, imbedded in the poem.

43 See Feist Pubs., 499 U.S. at . 44 Section 107 provides in pertinent part that: “[T]he fair use of a copyrighted work … for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include— (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.” 17 U.S.C. § 107. 45 See, e.g., Netanel, Locating Copyright, supra note ; Rubenfeld; see also Wendy Gordon, Reality as Artifact: From Feist to Fair Use, 55 LAW & CONTEMP. PROBS. 93 (1992) (describing how copyrighted works can become facts that should be available for use).

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The fair use doctrine that many scholars identify as the most speech-protective of the internal doctrines of copyright law has been deemed virtually impossible to predict and one of the most murky and mystifying concepts in the law.46 Fair use has also increasingly become beholden to a market effects analysis and whenever licensing is theoretically possible such a defense is generally rejected.47 Despite concerns about the adequacy of these internal doctrines, courts and scholars have almost universally pointed to this incorporation of First Amendment protections as greatly limiting the scope of independent First Amendment review.48 Although the Supreme Court in Eldred stopped short of saying that these built-in or incorporated doctrines are coterminous with the First Amendment, it suggested that in almost every case these built- in doctrines are the sole avenue of speech protection. Even scholars, such as Neil Netanel and Lawrence Lessig, who have contended that there should be more independent First Amendment scrutiny of copyright law have acknowledged that these built-in doctrines are speech-protective and generally sufficient in the vast majority of copyright infringement cases. 49 This concession turns out to be much larger than Netanel and others may have thought, leaving little room for First Amendment review. Netanel and Lessig’s hope of striking down the CTEA (Sonny Bono Copyright Term Extension Act) on the basis of the First Amendment was undercut in part by their acceptance of incorporation; courts are much less concerned about the excesses of term extensions if there are built-in doctrines that ameliorate any damage to free speech interests in individual cases.

C. Copyright as the “Engine of Free Expression”

46 ; see also Jennifer E. Rothman, Why Custom Cannot Save Copyright's Fair Use Defense?, 93 VA. L. REV. IN BRIEF 243 (2008); Richard A. Epstein, Some Reflections on Custom in the IP Universe, 93 VA. L. REV. IN BRIEF 207 (2008), available at http:// www. virginialawreview.org/inbrief/2008/01/21/epstein.pdf.; Jennifer E. Rothman, The Questionable Use of Custom in Intellectual Property, 93 VA. L. REV. 1899 (2007). 47 See Rothman, The Questionable Use of Custom, supra note ; James Gibson, Risk Aversion, YALE L.J. 48 See, e.g., Eldred, at ; Nimmer, supra note , at ; Goldstein, supra note , at . 49 See, e.g., Netanel, Locating Copyright, supra note , at ; Lessig; but see Rubenfeld, supra note , at .

17 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

Another reason that the First Amendment has failed to limit copyright law, is that the copyright system is considered to further First Amendment goals. Nimmer and Goldstein both concluded that copyright law and the First Amendment were essentially harmonious because copyright itself serves First Amendment goals by encouraging the creation, distribution and publication of works.50 Put another way, the incentive rationale that for many stands at the heart of the constitutional basis for copyright protection serves the First Amendment’s interest in promoting speech. If the copyright regime is viewed as promoting speech interests by providing incentives to create, then there is little room for First Amendment scrutiny. As the Supreme Court has articulated, copyright is the “engine of free expression” and accordingly the First Amendment is no obstacle to the enforcement of copyrights. 51 Putting aside both longstanding and recent challenges to the legitimacy of the incentive rationale,52 if one accepts, as the courts and most scholars have done, that copyright protection generates more speech, then one must engage in balancing these two speech interests (generating speech versus allowing speech). When doing this evaluation, courts and scholars generally adopt a utilitarian

50 Goldstein, Copyright and the First Amendment, supra note , at 990, 998, 1001, Nimmer, supra note , at . 51 Eldred, 537 U.S. at 219; Harper & Row Publishers v. Nation Enters., 471 U.S. 539, 558 (1985) (describing copyright as the “engine of free expression”); see also Netanel, Democratic Civil Society at 341. 52 See, e.g. Kal Raustalia & Christopher Sprigman, The Piracy Paradox: Innovation and Intellectual Property in Fashion Design, 92 VIRG. L. REV. 1687 (2008); Emmanuelle Fauchart & Eric Von Hippel, Norms-Based Intellectual Property Systems: The Case of French Chefs, 19 ORG. SCI. 187 (2008). For an earlier incarnation of this argument, see Justice Breyer's, then Professor Breyer’s, article, The Uneasy Case for Copyright: A Study of Copyright in Books, Photocopies, and Computer Programs, 84 HARV. L. REV. 281 (1970). Although the case for the incentive rationale is generally overstated and there are compelling arguments that copyright extensions, particularly retrospective ones, and resurrections do little to add to the incentive to create, I nevertheless think that at its core providing some copyright protection is crucial for supporting the robust, independent (i.e. not patron or government supported) production of creative works. Even though many authors, musicians and artists would continue to create absent any remuneration, the amount of time they could devote to such work would be greatly reduced by the necessity of getting a “day job” to support themselves. The quality of works might also suffer since the materials for creation can be costly, and artists would no doubt need to cut corners.

18 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. approach in which the result that leads to the most speech overall is the best one. All trespasses to another’s copyrighted work risk reducing speech in the future or elsewhere and thus courts engage in broad utilitarian calculations of the overall speech markets. This type of calculation makes the First Amendment of very limited value in copyright cases.53 Moreover, speech that uses or incorporates prior works is not valued as much as works viewed as wholly novel (to the extent that such works exist) because such derivative works do not add (as much) to the “marketplace of ideas.” The fact that most copyright scholars situate their First Amendment analysis in the democratic society paradigm exacerbates this symbiotic view of copyright law and free speech. Although there are many different approaches to the First Amendment,54 the vast majority of scholarship in the copyright arena situates itself in a “democratic society” approach to interpreting and applying the Amendment.55 The democratic society approach to the First Amendment justifies free speech protections in the name of promoting democracy. The democratic society rubric and its corollary, the “marketplace of ideas” approach, both feed into the notion that the primary aim of both copyright law and the First Amendment is to encourage the production and dissemination of ideas. As I will discuss in subpart D below, there are other problems with the democratic society

53 See also discussion infra Part II.A. 54 th Alexander Meiklejohn, FREE SPEECH AND ITS RELATION TO SELF-GOVERNMENT (4 ed. 2007) (originally published in 1948) (contending that the First Amendment should be protected when it furthers the objective of self-government); C. Edwin Baker, Harm, Liberty and Free Speech, 70 S. Cal. L. Rev. 979, 981 (1997) (speech should be protected “because and to the extent that it is a manifestation of individual autonomy); Charles Fried, The New First Amendment Jurisprudence: A Threat To Liberty, 59 U. CHI. L. REV. 225 (1992) (positing autonomy as the primary principle of the First Amendment); Martin H. Redish, The Value of Free Speech, 130 U. PA. L. REV. 591 (1982) (identifying self-fulfillment as the primary objective of the First Amendment); Thomas Scanlon, A Theory of Freedom of Expression, 1 PHIL. PUB. AFF. 204 (1972) ( ); Thomas I. Emerson, Toward a General Theory of the First Amendment, 72 YALE L.J. 877 (1963) ( ). 55 It is beyond the scope of my argument to resolve the long-standing debates on the purposes behind and the scope of the First Amendment. Nevertheless, the fact that copyright scholars have generally rejected the applicability of autonomy interests in the realm of copyright and First Amendment defenses is undeniable and has lead to a particular understanding, a problematic one, for how the First Amendment should be analyzed in copyright cases.

19 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. approach, but at the very least it feeds into the blanket exemption of copyright law from First Amendment scrutiny. It is true that even under the democratic society rubric some limits on copyright law might be recognized if changes to the law actually discourage the creation of new works. Both Netanel and Lessig, for example, have claimed that the extension of copyright terms, by delaying the entry of works into the public domain, works against both copyright’s and the First Amendment’s goals of promoting progress and if left unchecked would ultimately generate less, rather than more, speech. Overall, however, this approach solidifies the general understanding that copyright furthers First Amendment goals more broadly and therefore copyright law should not be limited in individual cases on the basis of free speech concerns.

D. The Democratic Society Justification

Even if it were a more successful vehicle in copyright cases, the currently articulated First Amendment approach is a highly restrictive one. In particular, the primacy of the democratic society perspective leads to a very particular vision of what sort of uses of copyrighted works should be constitutionally protected and when – favoring uses that contribute to broad public debate, and that are transformative.

1. The Personal is Not Political

In the democratic society view of the First Amendment, individuals are of secondary concern and their role only relevant when in service to broader societal goals other than autonomy (or self-fulfillment or self-expression). As Alexander Meiklejohn said “[w]hat is essential is not that everyone shall speak, but that everything worth saying shall be said.”56 Simply put, the democratic society focuses on groups, not individuals.57 Scholars and jurists have often rejected the application of self-fulfillment and autonomy-based justifications for the First Amendment in the context of copyright law. Nimmer, for example, thought that “free

56 Alexander Meiklejohn, POLITICAL FREEDOM (1948). 57 See, e.g., Netanel, Democratic Civil Society, supra note , at 342.

20 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. speech as a function of self-fulfillment does not come into play. One who pirates the expression of another is not engaging in self- expression in any meaningful sense.”58 Nimmer was not alone in his views – scholars and courts have routinely viewed those who use another’s expression as either lazy or pirates, rather than as individuals referring to a very real part of their world.59 Not only does the democratic society rubric dismiss individual-based goals of the First Amendment, such as autonomy, self-fulfillment or self-expression, but it also favors particular types of uses – ones that constitute public dialogue on political issues, rather than on cultural or artistic matters. Expression that furthers individual values is simply not important. Nimmer, for example, saw a role for the First Amendment in limiting copyright protection only when the use at issue furthered the “democratic dialogue” about an issue of great public import. Paul Goldstein similarly contended that copyright infringement should only be excused, without regard to market effect, when the “infringed material is relevant to the public interest and the appropriator’s use of the material independently advances the public interest.”60 Uses that furthered an individual’s interests were simply not matters for the First Amendment. Even scholars who have expressed a broader view of what types of uses should be viewed as meriting First Amendment protections have suggested that only uses which contribute broadly to a cultural dialogue are worthy of independent free speech protection. Neil Netanel, for example, expressly placed copyright in a “democratic paradigm” and defined copyright as “in essence a state measure that uses market institutions to enhance the democratic character of civil society.”61 Although Netanel admits that speech has a role in promoting “individual autonomy,”62 he does not consider autonomy in his analysis of what uses should be permitted when the First Amendment is applied in the copyright context. To the extent that individual expression is valuable it is primarily because it is in service to his preferred goal of furthering

58 Nimmer, supra note , at 1192 (emphasis in original). 59 See also Denicola, supra note , at (rejecting the relevance of the individual development theory of the First Amendment in the copyright context). 60 Goldstein, Copyright and the First Amendment, supra note , at 988. 61 Netanel, Democratic Civil Society, supra note , at 290 (emphasis added). 62 Netanel, Locating Copyright, supra note at 62.

21 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. the democratic project. Accordingly, Netanel favors uses that are transformative and that contribute new material to the democratic dialogue.63 Like Nimmer and Goldstein, Netanel enumerates several areas of preferred uses of copyrighted works. He suggests that special protection may be warranted for “news reporting and political commentary, as well as church dissent, historical scholarship, cultural critique, artistic expression, and quotidian entertainment.”64 Although some of these enumerated categories go beyond the expressly political, they all focus on a public dialogue on common ground rather than on individual justifications for using copyrighted works. Ultimately, Netanel is concerned with “public education, self-reliant authorship, and robust debate,”65 not with individual creators and users. There is nothing wrong with these scholars’ concerns about public dialogue and matters of broad public concern. Many of the uses of copyrighted works they pinpoint are deserving of protection; however, identity- based and personal uses are also valuable and need their own basis for protection. The dominant democratic society view provides little comfort for those wanting to engage in such uses.

2. Discounting Expression

The democratic society justification also favors the use of ideas rather than expression because only the ideas underlying the expression are generally perceived to be relevant to the democratic dialogue.66 In Nimmer’s view there is “no First Amendment justification for the copying of expression along with ideas simply because the copier lacks either the will or the time or energy to create his own independently evolved expression.”67 Nimmer concluded that the only situations meriting First Amendment protection were graphic works generally related to the news because otherwise the ideas and facts would be adequate.68 Nimmer imagined that such an exception would only apply in

63 See, e.g., Netanel, Locating Copyright, supra note , at 16-19 and n. 61. 64 Netanel, Locating Copyright, supra note , at 7. 65 Netanel, Democratic Civil Society, supra n. , at 291. 66 See, e.g., Nimmer, supra note . 67 Nimmer, supra note , at 1203. 68 Id.

22 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. extreme circumstances.69 Similarly, Denicola thought that the First Amendment would primarily come into play in the context of a visual record of historical events.70 In First Amendment cases, outside of copyright law, the Supreme Court has not differentiated between expression and ideas or facts. As Jed Rubenfeld has noted, the Supreme Court did not protect the right of Cohen to express the idea or fact contained in his statement “Fuck the Draft,” but instead protected his right to that exact expression.71 The need to use expression is particularly true in the context of more personal, identity-based uses. In fact, if only the broad principles of self-government and the public interest in democratic dialogue mattered there would be many alternatives to “Fuck the Draft,” but if one’s ability to express one’s exact sentiments matters then nothing comes close to “Fuck the Draft.”72 Moreover, it seems a dangerous precedent for courts to have the power to determine when ideas and facts are sufficient stand-ins for the prohibited expression.

3. Transformative Uses

The democratic society justification to analyzing copyright uses also favors transformative uses because those uses supposedly add more to the democratic dialogue.73 Netanel deems non- transformative uses “slavish copying” and contends that such copying should fall outside of both First Amendment and fair use protection.74 Even the few scholars to have suggested a non- democratic society have favored transformative uses. Jed Rubenfeld, for example, thinks that “non-imaginative” or non-

69 Nimmer gives two primary examples of the narrow circumstances when the First Amendment should protect the use of expression. The first is the famous photograph from the My Lai massacre during the Vietnam War. The second is the film footage of the assassination of President John F. Kennedy. In each case, Nimmer viewed the works as essential to the democratic dialogue on a matter of great public importance in which only the expression itself of the work could adequately convey the message. 70 Denicola, supra note , at . 71 Rubenfeld, supra note , at . 72 Cf. USOC v. SFAA (rejecting a First Amendment defense to trademark infringement and holding that there were adequate alternatives to the “Gay Olympics,” such as the “Gay Games”). 73 See, e.g., Netanel, Democratic Civil Society, supra note , at 362-63. 74 Id.

23 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. transformative uses are pure piracy.75 Transformative uses do add to the “marketplace of ideas”; however, these very emphasis on increasing or maximizing overall speech ignores the fundamental value of non-transformative uses. It is often such non- transformative uses that are the closest to the heart of individuals and which should accordingly be protected by a liberty interest. I discuss in Part III a number of example of identity-based uses that depend on non-transformative uses of copyrighted works.

II. The Substantive Due Process and Liberty Turn

In a world of ever-expanding copyright laws, substantial statutory damages for copyright infringement and criminal enforcement of copyrights, the failure of the First Amendment approach is particularly glaring. Given my analysis in Part I about why the First Amendment has not provided much assistance, I now consider why shifting the paradigm to a substantive due process, liberty-based approach could provide a more robust grounding for protecting certain uses of copyrighted works.76 The recent reinvigoration of substantive due process in Lawrence v. Texas77 provides a window into one possible avenue for evaluating when individual uses of copyrighted works might deserve constitutional protection. In striking down Texas’ ban on homosexual sodomy, the Supreme Court in Lawrence set forth a robust reading of the Constitution’s protection of negative liberty rights, as set forth in both the Fifth and Fourteenth Amendments.78 The Court in Lawrence embraced the concept of “liberty” as an individual right distinct from the more limited privacy right that had dominated substantive due process analysis since Griswold v.

75 Rubenfeld, supra note at . 76 The Progress Clause itself may limit what copyright laws Congress can pass, but it says nothing about how to resolve individual cases of copyright infringement and conflicts with any competing interests of a defendant in a given case. 77 539 U.S. 558 (2003). 78 The Fifth Amendment provides in pertinent part that : “No person shall be … deprived of life, liberty, or property, without due process of law….” U.S. CONST. Amdt. V. The Fourteenth Amendment has a virtually identical provision precluding violations of due process by the states. See U.S. CONST. Amdt. XIV. The Fourteenth Amendment’s protection of “liberty” has been held to incorporate the protection of free speech and the specific dictates and law of the First Amendment against violation by the state.

24 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

Connecticut.79 The Supreme Court in Lawrence described liberty in broad terms: “Liberty presumes an autonomy of self that includes freedom of thought, belief, expression, and certain intimate conduct.”80 The liberty protected by the due process clause, according to the Court, “has a substantive dimension of fundamental significance in defining the rights of the person.”81 I do not think that Lawrence and its progeny will usher in a new Lochner era of substantive due process review in which courts routinely strike down laws viewed as irrationally limiting economic or other liberties.82 I do, however, think that Lawrence signals a renewed understanding of individual liberties – one that brings liberty out of the closet of privacy. While the evolution of this approach to personal liberties will no doubt take some time and its path is difficult to predict,83 Lawrence provides a powerful signal that some uses of copyrighted works that are essential to a person’s “autonomy of self” should have constitutional protection. My claim here is less a doctrinal one – that courts should consider substantive due process defenses instead of First Amendment ones – than a theoretical one. My primary contention is that a liberty analysis, derived both from our understanding of substantive due process and from the self-expression (rather than the marketplace of ideas) justifications for the First Amendment, provides a compelling and promising lens for looking at uses of copyrighted works. One could contend that this “liberty approach” is still a First Amendment analysis, but an autonomy-based one rather than a

79 381 U.S. 479 (1965). 80 Lawrence, 539 U.S. at 562 (emphasis added). 81 Lawrence, 539 U.S. at 558. 82 Lochner v. New York, 198 U.S. 45 (1905) (invalidating labor law on basis of interference with the liberty to contract). 83 Some courts are already resisting the broader approach of Lawrence and are clinging to the more specific, though now questionable, approach of Washington v. Glucksberg, 521 U.S. 702 (1997). Glucksburg required courts to only consider as substantive due process rights, rights that are “deeply rooted in this Nation's history and tradition,” Id. at 721. Courts have also generally continued to rely on the strict scrutiny and rational basis frameworks despite language in Lawrence that calls into question these approaches to evaluating violations of substantive due process rights. See, e.g., Abigail Alliance for Better Access to Developmental Drugs v. Von Eschenbach, 495 F.3d 695 (D.C. Cir. 2007) (en banc) (rejecting substantive due process right to access to experimental drugs by terminally ill patients on basis that was no historical root of right and that government position was rationally related to state interest).

25 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. democratic society approach.84 Or one could say that I have adopted a Meiklejohnian approach of putting the self-expressive aspects of free speech into the “liberty” provision of the Fifth Amendment. I do not seek, however, to resolve here debates among constitutional law scholars about the true purposes of the First Amendment or its interplay with the substantive due process clause.85 My point instead is that a liberty and autonomy-based focus on IP use rights leads to a very different understanding than that currently advocated by scholars concerned about the scope of copyright law. This paradigm shift changes the focus of constitutional review in copyright cases and allows me (and hopefully others, including courts) to connect up with another developed body of constitutional law. The central liberty involved in identity-based uses of copyrighted works revolves around the freedom of a person not the freedom of speech – what is being said is much less important than why it is being said or by whom. I will develop in more detail in Part III some examples and categories of uses that implicate an individual’s liberty right, but in

84 Some Supreme Court justices and scholars have pointed to the self-expression and self-fulfillment roles of the First Amendment. See, e.g., Police Dep’t of Chicago v. Mosley, 408 U.S. 92, 95-96 (1972) (“To permit the continued building of our politics and culture, and to assure self-fulfillment for each individual, our people are guaranteed the right to express any thought, free from government censorship.”) (emphasis added); C.B.S. Broadcasting Sys., Inc. v. Democratic Nat’l Comm., 412 U.S. 94, (Brennan, J., dissenting) (“The First Amendment values of individual self-fulfillment through expression and individual participation in public debate are central to our concept of liberty.”) (emphasis added). See also supra note . 85 I note that at least with regard to the Fourth Amendment one common understanding in constitutional law, though the matter is far from settled, is that a more specific constitutional provision trumps a less specific one. See Graham v. Connor, 490 U.S. 386, 394-95 (1989) (contending that no separate substantive due process scrutiny is merited when Fourth Amendment analysis applies directly); Albright v. Oliver, 510 U.S. 266, 273-74 (same). Numerous scholars and jurists, however, have suggested otherwise, especially in the context of the First Amendment and substantive due process. See Albright v. Oliver, 510 U.S. 266, 286 (1994) (Souter, J., dissenting) (contending that more than one constitutional provision can apply even if a specific constitutional provision is on point); Griswold, 381 U.S. 479 (suggesting that the right to privacy may be protected by a concurrence of several different constitutional provisions); U.S. v. Martignon, 492 F.3d 140, 152 n.7 (2d Cir. 2007) (suggesting that criminal law penalizing recording of musical performances might run afoul of both the First Amendment and the Due Process Clause); see also Kenneth L. Karst, The Freedom of Intimate Association, 89 YALE L.J. 624 (1980) (noting that the right of intimate association may be located in a variety of constitutional provisions, including the First, Fourth, Fifth, and Fourteenth Amendments, but concluding that there is no need to locate the entirety of the right in a single constitutional provision).

26 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. this part I suggest the reasons why a substantive due process, liberty approach is a more promising place to situate use rights than the dominant First Amendment approach. At its core, the liberty approach shifts the landscape from comparing speech and favoring approaches that maximize speech to an approach that compares liberty interests more broadly and maximizes liberty overall.

A. The First Amendment/Free Speech Approach

Under the First Amendment approach, uses of other’s copyrighted works are generally treated as either property or speech. In either case, the copyright owner’s countervailing privileges and rights are likely to be paramount.

1. Property v. Speech

When copyright is treated as property, courts routinely dismiss free speech claims, concluding that no one can claim speech rights in someone else’s property. The Supreme Court in Eldred emphasized that there is no First Amendment right to “make other people’s speeches.” In other words, there is never a free speech right to use someone else’s copyrighted works.86 Admittedly, I find this conclusion problematic on First Amendment grounds because it seems to covert the “freedom of speech” into “freedom of [your own, original never before said] speech” – a quite limited reading of the First Amendment that I do not think can stand any serious scrutiny. I will not belabor this critique here because my primary aim here is not to debunk the roadblocks to the adoption of a more searching First Amendment scrutiny, but instead to consider the value of an alternative approach. The facile sentiment expressed in Eldred undeniably dominates the First Amendment analysis in copyright cases and connects up with other free speech cases in which property rights greatly limit the scope of the First Amendment.87 One may have a

86 Eldred, 537 U.S. at 221. 87 There are good reasons to question the treatment of intangible property as being the same as tangible property, especially when a competing speech interest is at stake since there is no interference with the property owner’s ability to use the work in the context of intangible property. Despite these misgivings, courts have routinely analogized

27 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. right to speak, but usually not on, and almost never with, someone else’s property.88 One can burn a flag in the public square or on your own front lawn, but you can’t burn someone else’s flag or your own flag on your neighbor’s lawn. Similarly, one can make and sell t-shirts with your original photograph on it, but you can’t sell t-shirts with Robert Mapplethorpe’s photograph on it. Thus, when the property rights of a copyright holder are compared with the speech rights of a user, the property right will generally prevail.

2. Speech v. Speech

Treating copyrighted works as a form of speech rather than property does not make it any easier for individuals to justify the use of copyrighted works. This is true because under such an approach the copyright owner’s speech is being compared with the user’s speech. As discussed, because copyright is viewed as the “engine of free expression” users’ speech interests become copyright to real property. See Stewart E. Sterk, Intellectualizing Property: The Tenuous Connections Between Land and Copyright, 83 WASH. U. L. Q. 417 (2005). 88 See, e.g., Hudgens v. NLRB, 424 U.S. 507 (1976) (no First Amendment right to strike or picket on private property of shopping center); Lloyd Corp. v. Tanner, 407 U.S. 551 (1972) (no First Amendment right to handbill in shopping mall and holding that there are generally no “rights of free speech on property privately owned and used nondiscriminatorily for private purposes only.”). See also Louis Michael Seidman, The Dale Problem: Property and Speech Under the Regulatory State (January 9, 2008) (working paper), draft available at http://ssrn.com/abstract=1082114. But see Marsh v. Alabama, 326 U.S. 501 (1946) (holding that one could not prohibit leafleting in a company town because although the town was privately owned it functioned like a traditional town and accordingly needed to permit some zones for free speech). There are a number of ways to distinguish the speech cases related to real property. First, in the context of tangible property, there are almost always alternative methods of speech. If a person cannot burn another person’s American flag, she can always buy or borrow another one. She could even make her own flag. When copyrighted works are at issue, however, there is no substitute or alternative method to making the same speech. If the copyright holder does not give permission for the use there are no other avenues for making the same expressive statement. This critique fits more broadly into an overall critique of the tangible property analogies for IP. It nevertheless remains the case that the language of copyright and the First Amendment treats the copyright holder’s property as inviolable and paramount to any speech interests of the user. A second potential difference in the copyright context is that the property- based speech restriction depends on the content, though not the viewpoint, of the speech. By contrast, in the tangible property context speech restrictions based on property rights generally turn on time, place and manner restrictions that are unrelated to the specific content of the speech.

28 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. secondary. Shoring up the copyright regime is viewed as promoting more speech overall.89 Some loss of individual speech is tolerated because society will be better off with more speech in the aggregate. In some sense this analysis echoes one justification for time, place and manner restrictions. If everyone could protest on the same day in the same place all of the messages would be drowned out, but if only one message can be conveyed at one time speech is more effective. Copyright – so the argument goes – similarly limits some speech so that there will be more speech (including copyrighted works) overall. Accordingly, when speech is posited against speech, the copyright holder almost always wins.

B. The Liberty Approach

The liberty approach avoids the problem of copyright law being a speech-producing engine. Under a liberty approach, we do not compare speech with speech, and then ask which speech is more valuable or which speech is more likely to generate the most speech overall. Instead, we compare an individual’s liberty interests with a copyright holder’s property right, speech right, or liberty interest. For reasons I will discuss, each of these categories is likely to be more successful for a potential user than the First Amendment approach.

1. Property v. Liberty

In the liberty analysis framework we are most likely to find ourselves comparing property rights with liberty interests. Generally speaking, rights to property do yield when significant personal liberty interests are at stake. This is particularly true when private property has been opened up to the public in some way. It is on this basis that many of the civil rights acts were passed and enforced without being considered takings of private property. 90

89 See discussion supra at Part I.C. 90 Cf. Heart of Atlanta Motel v. U.S., 379 U.S. 241 (rejecting plaintiff’s argument that Civil Rights Act requiring non-discrimination in rental of motel units unconstitutionally burdened the owners property rights). Although these cases involve the constitutionality of government statutes, the logic behind the courts’ rejection of property and liberty challenges to such laws is telling.

29 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

Liberty-based uses of copyrighted works only arise when an individual has lawfully accessed or encountered the copyrighted work. In every instance, the copyright holder has therefore opened his or her work up to the public. By doing so creators are aware that such works will be integrated into others’ lives. By making their works public, creators must yield to the countervailing interests of individuals who have incorporated their works into their lives.91 The arguments for preferring liberty rights over property rights are particularly strong in the context of intangible property. First, intangible goods are non-rivalrous so allowing some uses when a liberty interest is at stake does not significantly interfere with the ability of a copyright holder to use her work. In contrast, in the context of tangible property the impact of a use by a third party is much more significant, for example, forcing a landowner to permit a carnival on her land would be quite intrusive and would restrict her full use and enjoyment of her land. Allowing a limited set of free (or even reasonably fared) uses would potentially reduce a copyright holder’s income, but it would not be so detrimental as to either destroy the value of the work or discourage future creations by other authors or copyright owners.92 Moreover, although the Constitution provides a basis for copyright law, it is a privilege granted at the will of Congress, not a common law right; therefore it is an expressly limited property right.93 By contrast, protection of liberty rights, at least negative ones, is granted by the Constitution and generally thought of as an

91 Cf. Marsh v. Alabama, 326 U.S. at 506 (“Ownership does not always mean absolute dominion. The more an owner, for his advantage, opens up his property for use by the public in general, the more do his rights become circumscribed by the statutory and constitutional rights of those who use it.”); 92 I discuss whether and when one must pay for such uses in Part IV. 93 There has been scholarly debate on this point since the inception of copyright law and it continues today, but the issue has been settled by the Supreme Court. Wheaton v. Peters, 33 U.S. 591 (1834) (holding that whatever its origins, copyright is now a creature of statutory privilege). At the time of the decision in Wheaton, the copyright statute only applied to published works (unpublished works were still governed by common law copyrights) – this is no longer the case. See also Mark Rose, AUTHORS AND OWNERS: THE INVENTION OF COPYRIGHT (1995); L. Ray Patterson, COPYRIGHT IN HISTORICAL PERSPECTIVE (1968). Cf. Donaldson v. Beckett, (1774) (majority of House of Lords in England concludes that statutory copyright law – under the Statute of Anne – eliminates any common law protections for copyrights that might have existed prior to its passage).

30 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. expression of an a priori natural right.94 Accordingly, liberty interests should prevail against copyrights when the two rights come into conflict.

2. Speech v. Liberty

If one analyzes copyright owners versus users’ rights as a battle between copyright holders’ speech rights and users’ liberty rights, the liberty rights are also likely to prevail. Users of others’ copyrighted works are not likely to interfere with the initial ability of creators to speak; therefore, the two interests will generally not come into conflict. In some instances one might view such a use as compelled speech (a free speech violation) because a creator is arguably forced to say something she did not intend. When the origin of the user’s speech is clear, however, I do not think there is a compelled speech problem. Moreover, by putting the work into the public eye, the creator has lost some of her control over what is subsequently done with the work. Very often copyright owners are not the creators of the copyrighted content – a fact that makes the compelled speech argument even less convincing.

3. Liberty v. Liberty

The final possible comparison in the liberty context is to compare liberty with liberty interests. One possible opposition to my proposal is that there are countervailing, perhaps stronger liberty interests by authors and creators over their copyrighted works. One person’s liberty interest cannot run roughshod over another’s. If one takes as one’s primary goal autonomy and individual expression, then the rights of users must be tempered when their autonomy interests interfere with the autonomy of others, especially that of creators who also have a liberty interest in a

94 Negative liberty interests are those that prevent the government from taking action, e.g., such as enforcing copyrights or other laws in contravention of a person’s liberty. Positive liberty rights are those that would require the government to take affirmative steps to satisfy a liberty interest, such as requiring the government to give everyone affordable public transportation or a free car. I do not address affirmative liberty interests here.

31 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. particular work.95 The distinction between positive and negative liberty interests makes clear why a comparison of liberty interests should favor users over creators here. The federal government has no obligation to grant affirmative liberty rights to creators, but may have an obligation to grant negative liberty rights to prevent the enforcement of copyright laws against individuals who are using other’s copyrighted works to further their own individual liberty interest. Moreover, even if some obligations to authors are created by a liberty approach, such obligations are more likely to be in the form of requiring attribution rather than prohibiting uses.96 Additionally, because copyright protection often rests in publishers not creators, the competing interests weigh more heavily on the side of the individual user because the creator has already given up his or her liberty interest. Additionally, because the works have been made public the author has voluntarily given up some of her liberty interest in the work. Creators knowingly release their works (and copyrights) to publishers, producers and distributors and are aware that members of the public will then interpret their work as they please, often incorporating the works into their lives. In fact, many creators hope that people will do just that. Creators cannot have it both ways, relinquishing their liberty rights and then trying to regain them to prevent others from exercising their own liberty rights. In contrast to speech where the limitation on one person’s speech leads to more speech overall, in the context of copyright law, the limitation on one person’s liberty seems to have a limited effect on the other’s person’s liberty. So under a utilitarian framework, liberty would be maximized overall by permitting some liberty-based uses of copyrighted works.

95 Although I focus here on autonomy interests, I recognize that it can be difficult given cultural and psychological constraints to ever be purely autonomous. See, e.g., Martha Fineman, THE AUTONOMY MYTH (2005). Nevertheless, I think that providing individuals with greater freedom to express themselves and their experiences is a step in the right direction toward greater, if not complete, autonomy. 96 See Rebecca Tushnet, Payment in Credit: Copyright Law and Subcultural Creativity, 70 LAW & CONTEMP. PROBS. 135 (2007) (discussing online norms in fan fiction culture for providing attribution); see also Rothman, The Questionable Use, supra note at (discussing that attribution customs are more worthy of consideration than many other customs).

32 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

In the table below I summarize the foregoing discussion and the competing interests at stake between copyright holders and users and the likely outcomes under each comparison.

Table 1. Competing Interests

Category Copyright Holder’s User’s Approach Likely Outcome Interest Interest

I (intangible) Property Speech No Right to “Make Someone Copyright Owner Else’s Speeches” Preferred

II Speech Speech More Speech Overall Favored Copyright Owner Preferred

III (intangible) Property Liberty Liberty Interest Should Generally User Preferred if be Favored Liberty at Stake

IV Speech Liberty Interests Must be Balanced Generally No Conflict

V Liberty Liberty Interests Must be Balanced Can Harmonize Interests

4. Other Advantages of the Liberty Approach

Not only does the liberty approach shift what is being compared to a framework that is likely to be more successful for some categories of users than a First Amendment approach, but the liberty approach also has a number of other benefits. First, the free speech approach leads to a degree of moralizing that has been explicitly rejected in the substantive due process context. Users of other’s copyrighted works, even when using those works for their own self-expression, are often derisively described as “pirates,” or “free riders.” Shifting the lens to a liberty-based approach will not only focus on articulating positive attributes of the uses, but also

33 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. will remind scholars and courts alike that moral judgments should be disfavored in constitutional evaluations.97 Second, the liberty approach is better designed to transcend market-based analysis. The democratic society justification for the First Amendment is ultimately beholden to the market because the market drives production and more speech overall is the paramount value of this paradigm. Even the few scholars to have proposed a more individual-focused approach to resolving conflicts between the First Amendment and copyright law have used market harm as a limiting principle and proposed compulsory licensing, reasonable royalty or some other tariffing scheme.98 It is therefore difficult to escape the market-based arguments without proposing some other value behind use rights. The liberty approach that I propose shifts the emphasis to the individual and permits a recognition that copyright may not always be in service to an individual’s liberty interest. When a conflict arises between the liberty interests of a copyright holder and a user, the fundamental premise of copyright law cannot be said to further those liberty interests overall. Accordingly, an individual determination must be made in each case rather than having a blanket preference for copyright holders. Third, the argument that built-in speech protections sufficiently protect users has less currency in the liberty lens analysis. The built-in speech protections have the most value under the democratic society rubric where ideas and facts and fair use are generally adequate. For liberty-based uses, however, the expression is generally more important than the ideas or facts, for reasons I will elaborate on in the next part. Moreover, fair use, as I also will discuss, is primarily driven by market concerns and has little room to consider uses that are driven by autonomy-based motives. I have tried in this section to present a sketch of why as a theoretical matter substantive due process adds something important to the picture. I will now turn to a more detailed treatment of the specific liberty interests that I identify and when I

97 See Lawrence, 539 U.S. 558 (constitutional basis for laws must be derived from source other than public morals); Suzanne Goldberg, Morals-Based Justifications For Law-Making: Before and After Lawrence v. Texas, 88 MINN. L. REV. 101 (2004). 98 See, e.g., Baker, supra note ; Rubenfeld, supra note ; see also Netanel, supra note at .

34 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. contend enforcement of copyright law unconstitutionally limits an individual’s negative liberty interests.

III. Privileged Uses Under A Liberty-Based Theory

The liberty lens that I propose takes a very personal and individual-based approach to uses of copyrighted works. Accordingly, many of the most often debated controversies in copyright law that scholars have devoted much of their time to, especially in the First Amendment context, are not ones that a liberty analysis has much to say about. The liberty approach would not generally step in, for example, to assist with facial challenges to copyright laws, such as a challenge to extensions of copyright terms.99 But the liberty approach does have a lot to offer on the topics of “personal uses,” derivative works, and to some extent digital rights management, anti-circumvention laws and consumer contracts limiting fair use rights or expanding the scope of copyrights. In the context of real and personal property, Margaret Jane Radin has told a compelling story of how property can become integral to our personhood.100 In the intellectual property context, IP rights not only affect the personhood of creators of intellectual property, but also the personhood of everyone who lives in our society – a society that is populated by such IP. Each of us creates copyrighted works, interacts with and inhabits copyrighted works. Sometimes a story that we read is affecting, sometimes it is not, and sometimes that story becomes so interwoven with our own lives that it is difficult to describe or live our own lives without reference to that story. In the latter instance, I contend that the copyrighted work has so entered an individual’s life that a liberty interest protects certain uses of that work. Driven in part by recent efforts to enforce copyright law against average, non-commercial users, several scholars have tried to articulate reasons to protect readers, listeners and viewers from

99 I note, however, that as a work has been under copyright for a longer period of time, it becomes increasingly likely that it has become incorporated into an individual’s life history or into the culture or lexicon. 100 Margaret Jane Radin, Property and Personhood, 34 STAN. L. REV. 957 (1982).

35 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. the ever-expanding copyright enforcement regime.101 Jessica Litman, for example, concludes that “copyright law was designed to maximize the opportunities for nonexploitative enjoyment of copyrighted works in order to encourage reading, listening, watching and their cousins.”102 She refers to such personal uses as “copyright liberties.” Her point is not a liberty-based one, however, but rather that copyright historically provided room for readers and listeners (i.e. users) and that such internal constraints should continue to be read into copyright law. I agree with Litman that there should be greater consideration of personal uses by the current copyright system and a recognition that the public has always been at the heart of the copyright system. Nevertheless, several features of her and other approaches to personal uses give me pause. First, I’m doubtful that the battle to roll back copyright law to a day, if ever there was one, when personal uses didn’t count is likely to be fruitless.103 Second, a broad exclusion for personal copying might swallow up copyright

101 See, e.g., Jessica Litman, Lawful Personal Uses, 85 TEXAS L. REV. 1871 (2007); Julie Cohen, The Place of the User in Copyright Law, 74 FORDHAM L. REV. 347 (2005); Jessica Litman, The Exclusive Right to Read, 13 CARDOZO ARTS ENT. L.J. 29 (1994). 102 Litman, Lawful Personal Use, supra note , at 1879. 103 There is an ongoing disagreement among scholars about whether in Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), the Supreme Court acknowledged that personal copying could be infringing. Many contend that because a fair use was found for the time-shifting actions of recording shows for subsequent watching that the Court excluded personal uses from the purview of copyright law. I think quite the opposite is true. If the Court had intended to exclude personal copying from the scope of the Copyright Act it would not have needed to engage in the detailed analysis of what type of use was made. The very fact that the Court emphasized that time-shifting was occurring, rather than some other use, suggests that the Court would not have been persuaded of fair use if viewers at home were recording show to create a home library of works. Moreover, as technology has improved digital recordings enable the creation of substitutionary copies in a way not possible at the time of Betamax. Additionally, at the time that Sony was decided there was no home market in old television shows. Today, there is a robust market for DVDs of old television shows. It is therefore not at all clear that Sony would come out the same way if decided today because there is unquestionably now an existing market for purchasing television shows. Compare Sony with Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) (rejecting the space-shifting defense to copyright infringement in the online music swapping context) and Mai Systems Corp v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993) (holding that loading software on to computer’s temporary memory infringes its copyright). Even at the time Sony barely garnered a majority. See Jessica Litman, The Sony Paradox, 55 CASE WESTERN L. REV. 917 (2005) (detailing the internal Supreme Court memoranda in the case).

36 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. protections themselves by destroying commercial markets all together. At the same time, Litman’s and others’ vision of permissible uses is a highly constrained one. A use is a personal one, in Litman’s view, only if the use is made for “herself, her family or her close friends” and is private. Finally, and most importantly, the personal use literature to date has failed thus far to develop a fleshed out legal theory for why personal uses should be protected at all and which uses should be permitted and which should not. Litman grounds her proposal in the Progress Clause itself and copyright history, rather than on any broader theoretical or constitutional foundation. My liberty-based approach provides the opportunity to establish such a foundation for personal uses. The promotion and protection of “personhood” and “autonomy of self” have long been considered constitutional goals set forth in the substantive and procedural protections of the “liberty” provided for in the Fifth and Fourteenth Amendments. Even though procreation, marriage, child-rearing, and more recently intimate association have often dominated substantive due process analysis, the underlying justifications for keeping the government out of these realms resonates with a certain subsection of uses of copyrighted works. Consider this language from Planned Parenthood of Southeastern Pennsylvania v. Casey: “[C]hoices central to personal dignity and autonomy are central to the liberty protected by the Fourteenth Amendment. At the heart of liberty is the right to define one’s own concept of existence, of meaning, of the universe, and of the mystery of human life.”104 Copyrighted works in certain circumstances make up a significant part of the meaning and existence of individuals and accordingly define their “personhood.”105 What a person reads has long been considered a fundamental piece of who that person is. As Justice Marshall said “[w]hat [a person] eats, or wears, or reads” all sit “close to the heart of the individual.”106 Without some liberty to use copyrighted

104 505 U.S. 833, 851 (1992). 105 Id. 106 Kelley, U.S. at 252-53 (Marshall, J., dissenting)

37 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. works without permission (and without payment) a person cannot be said to truly be in “possession and control of his own person.”107 For some time now, the liberty interest has primarily been located in a privacy-based conception of the “right to be let alone.”108 But for liberty rights to mean anything in the context of copyrighted works, something more affirmative in nature than a mere “right to be let alone” must be protected. The Supreme Court has described the liberty interest as one which protects individuals and their ability “to be free in the enjoyment of all [their] faculties.”109 One can not truly be free if one cannot refer to either one’s own life or the realities of the external world. Often doing both requires explicit reference and use of copyrighted works. When an individual describes his own reality, he cannot help but refer to works created by others. The liberty turn requires courts and scholars to consider the impact of restrictions on uses of copyrighted works on individuals, rather than more broadly on the “public interest,” the “democratic society,” or our political process. Individuals personally invest in copyrighted works and when they do they acquire some liberty interest in using them. Copyright holders cannot own reality. Copyrighted works often become imbedded in our lives. In particular circumstances, the use of copyrighted works is simply an effort to express oneself – either one’s historical past or some other facet of one’s identity. My goal in this section is to highlight some examples when I think that the liberty interest should protect uses of copyrighted works from liability for copyright infringement. I defer a more detailed discussion of limits on this principle to the next section. I will now consider a number of non-exclusive examples of how copyrighted works form part of our personal identity – specifically in the context of music, personal letters, diaries, and religious texts. In each case, the uses identified are at risk of copyright infringement liability under the current system, but I contend that they should not be because of their integral

107 Union Pac. Ry. Co. v. Botsford, 141 U.S. 250 (1891). 108 See Olmsted v. United States, 277 U.S. 438, 478 (1928) (Brandeis, J., dissenting) (“([T]he right to be let alone [is] the most comprehensive of rights and the right most valued by civilized men.”); Samuel D. Warren & Louis D. Brandeis, The Right to Privacy, 4 HARV. L. REV. 193 (1890). 109 Lochner v. New York, (Harlan, J., dissenting 1905).

38 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. relationship to an individual’s constitutionally-guaranteed liberty interest.

A. Music as the Soundtrack of Life

I consider music as my first example in part because it is almost unavoidable to hear music playing in the background of our daily lives – whether at sporting events, in the car, or in an office building. Music is truly the soundtrack of our lives and sometimes particular songs are playing at particularly memorable moments in our lives. These songs become permanently etched in our memories. To limit our ability to refer to such songs would be to ask each of us to erase our memory banks or to censor our own reality. The liberty interest cannot tolerate such a result. How many of us have made a mix tape, CD or MP3 playlist for a friend or romantic partner? Often these mixes allow us to share songs that have been important to us throughout the years or that mark a particular time or memory, whether it be a first kiss or learning of the death of someone close to you. A copyright owner should not be able to prevent you from sharing your memories with others. Copyright law should not be permitted to limit such individual uses of songs or even mixes of such songs because to do so is truly to control a person’s identity. Consider the popular websites, MySpace and Facebook, in which individuals are able to create online profiles or diaries that describe themselves. Many individuals have songs that play on these pages. Often these songs have special meaning to the owner of that page. Consider the suggestion from the legal dramedy, Ally McBeal, that everyone needs a theme song.110 Once you find your theme song, I contend that a copyright holder should not prevent you from using it – even in a public forum like MySpace. One example that I recently saw was a MySpace page of an out and proud gay man who in addition to posting a vibrant rainbow flag on his page has the song “Proud” by the band Queer as Folk playing on his page.111

110 The suggestion came from Ally McBeal’s therapist – played by Tracey Ullman. Ally ultimately selected “I Know Something About Love” as her theme song. 111 See http://profile.myspace.com/index.cfm?fuseaction=user.viewprofile& friendid=65173388.

39 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

Consider also the example from the Introduction of the woman who tries to work through her experience of being raped by playing on her publicly accessible blog (her online diary) the Journey song that had been on in the background when she was raped. Her use is an identity-based one in which she is describing and engaging with her own lived experience. Current First Amendment and internal copyright doctrines provide her little protection for her use. In some instances copyrighted works are not personally unique to an individual, but form part of a broader component of our culture or subculture. Singing “Happy Birthday” at your child’s first birthday party may have little to do with the democratic project or a public dialogue, but it has a great deal of individual meaning.112 Likely throughout your life at every birthday celebration that song has been sung to you and your intimates. Over the course of time it forms part of your personal and cultural identity. The liberty approach protects these personally expressive uses of music – even though they use the actual expression of copyrighted works in their entirety, the uses are not transformative, and have little role in the democratic project. Both the market- focused fair use regime and the First Amendment approaches provide little assistance to an individual who wants to use a particular song in a public venue, on a mix tape or to illustrate an online journal entry or MySpace page. As I will discuss in Part IV, under the liberty approach, an individual must still initially pay for a song, but should not have pay again for posting it, performing it or changing it to a digital format.

B. Autobiographies and “Private” Letters

Another area where a liberty interest should protect uses is the publication of personal letters when those letters were received by the author of a new work, such as an autobiography. Personal letters are protected by copyright law and such copyrights have often been asserted to restrict biographical works about well-

112 The song “Happy Birthday to You” was first published in 1893, and copyrighted in 1935. The copyright is still in effect. See Profitable “Happy Birthday,” Times of London at 6 (Aug. 5, 2000).

40 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. known figures, even when the recipient of the letter has given permission for its publication.113 Consider the case of Sinkler v. Goldsmith.114 In that case, Lorraine Sinkler sought a declaratory judgment that she could publish letters that she had received from Goldsmith. At the time of the lawsuit, Goldsmith was dead and his wife sought to stop the publication of letters he had sent to Sinkler. Goldsmith had founded a non-traditional spiritual/religious movement, The Infinite Way. Sinkler had joined the movement and developed an extensive correspondence and relationship with Goldsmith. In fact, Sinkler began ghostwriting monthly letters and other works for Goldsmith which were sent to and purchased by his followers. An Arizona district court rejected a First Amendment argument by Sinkler that she had a right to publish the letters that she had received from Goldsmith. The court also rejected a fair use defense because the letters were unpublished.115 A liberty approach would have allowed Sinkler to publish the letters that she had received as part of her personal telling of her life story – a life that included not just the fact of those letters but their content. Consider also the diaries of Anais Nin in which she details, among other things, correspondence between her and the writer Henry Miller.116 A First Amendment approach to cases like Sinkler and Anais Nin’s diaries treats the copyright holder’s interests as primary and concludes that any public interest in the underlying material could be achieved through synopsizing the underlying ideas and facts of the letters. The liberty approach analyzes the situation quite differently. Recipients of letters would have their own independent liberty right to quote liberally from and to reprint letters in their entirety. Such uses would not defeat the author’s copyright in the letters. Instead, for the recipient of the

113 See, e.g., Salinger v. Random House, Inc., 811 F.2d 90 (2d Cir. 1987) (rejecting fair use defense by biographer who liberally paraphrased from Salinger’s letters that had been held in university archives); Meeropol v. Nizer, 560 F.2d 1061 (1977) (rejecting fair use finding for defendant’s use of Rosenbergs’ private letters in biography about the famous couple). Notably, Warren and Brandeis’ original call for privacy was based in part on common law copyright protection for unpublished letters. See Samuel D. Warren & Louis D. Brandeis, The Right to Privacy, 4 HARV. L. REV. 193 (1890). 114 623 F. Supp. 727 (D. Ariz. 1985). 115 Id. The fair use defense is almost always rejected when a work is unpublished. See, e.g., Harper & Row. 116 See Diaries of Anais Nin. Nin’s correspondence to Miller was further memorialized with reprints of all of their letters in A LITERATE PASSION: LETTERS OF ANAÏS NIN & HENRY MILLER, 1932-1953 (1987).

41 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. letters, the letters become a part of her reality and identity. Accordingly, copyright law should not stand as an obstacle to an individual publishing a received letter.117 Separate from copyright concerns, there are legitimate privacy concerns about publishing private letters. The letter’s author might have her own liberty interest in the content of the letter. I contend, however, that unless some particular understanding was reached between the parties prior to receipt of a letter, the party who receives the letter should have the freedom to do with that letter what she wishes. If one wants letters to remain private, one should not send them. The letters do, however, need to be sent in order for a recipient to assert her right to use them. One could not break into someone’s house, discover an unmailed letter or unsent email and then make it public. A user’s liberty interest does not extend to a right or privilege of first access.118 Access must have already been granted. The right of first communication remains sacrosanct.

C. Diary of A Copyright Encountered

Not only should individuals be able to replay the soundtracks of their lives and refer to and publish letters they have received, but individuals should also be able to refer to life experiences even if those experiences include copyrighted material. Consider the example of one online journal, the Millions Blog, written by a number of fiction writers, journalists and fans of their works.119 One of the contributors to the blog is an avid reader of The New Yorker magazine. In particular, he spends substantial time reading the short stories in the magazine. He decided to write a blog entry about his year of reading stories in The New Yorker. He catalogued each story, by title, author, date of issue and provided a synopsis of the story. Suppose The New Yorker decided to sue either on the basis that he copied the underlying work or that he created a derivative work.120 Should a copyright

117 Her right does not extend to a third party author, though she could use a publisher to put out the work. 118 There may, however, be a right to continued access once initial access is given. 119 http://www.themillionsblog.com/2006/01/year-in-reading-new-yorker-fiction.html. 120 Derivative works are those which are based on an original work but which are not substantially similar to the original; for example, sequels, merchandizing etc.

42 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. action by the magazine be successful? Several cases suggest that there could be liability for copyright infringement in such a case.121 Similar issues have arisen with other blogs – some blogs, for example, aggregate news stories from multiple sources or catalogue episodes of favorite TV shows – in each instance the websites have been held liable for copyright infringement.122 I contend that the blogger, however, should be protected by a liberty interest because the author is simply recording his lived experiences, experiences that could not otherwise be described. Fair use would likely fail here – not only have similar cases so concluded, but courts are increasingly rejecting fair use where there is virtually any way that a copyright holder could monetize a use. Given that the blogger could have licensed the stories from the New Yorker, a fair use defense would likely be rejected. In contrast, under a liberty analysis the blogger would be protected since the use was motivated by his intent to document and describe his lived experiences. Identity-based uses can involve images, as well as words and music. Consider the example from the Introduction – the one in which Samantha Ronson, Lindsey Lohan’s girlfriend, posted to her MySpace page a paparazzo’s photograph of her and Lohan kissing. Under current copyright law, Ronson violated the photographer’s copyright by posting the picture without permission.123 Neither the fair use doctrine nor the First Amendment provides Ronson a likely defense, but a liberty interest approach establishes Ronson’s right to post a picture documenting her own life on her own webpage. When an individual is documenting his or her own life, the privileges of copyright holders cannot prevent such uses of their copyrighted works. This is true whether the use is private or public, commercial or not.

Copyright holders have the exclusive right to prepare derivative works. 17 U.S.C. § 106. 121 Nihon Keizai Shimbun, Inc. v. Comline Business Data, Inc., 166 F.3d 65 (2d Cir. 1999) (rejecting fair use defense (and 1st amendment arguments subsumed within) for abstracts of news stories). Cf. Castle Rock Entertainment, Inc. v. Carol Pub. Group, Inc.,150 F.3d 132 (2d Cir. 1998); Twin Peaks Prods v. Publications Int’l Ltd., 996 F.2d 1366 (2d Cir. 1993). 122 See supra note . 123 I note that Rohan and Lohan’s right of publicity is not violated because there would be a successful newsworthiness/First Amendment defense by the photographer.

43 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

D. Religious Texts

Copyrighted works often are integral to an individual’s religious experiences. Although the Koran and Judeo-Christian bibles are generally thought to be free of copyright protections, various editions of those texts with editor’s commentary and new translations are not.124 Moreover, most religious texts for more recently developed religions are still protected by copyright law. Numerous religious groups have used copyright laws to wield power over their members, as well as against dissenters and splinter groups from mainline churches.125 The First Amendment and internal limits on copyright law have often been of little avail in such instances. The actual expression of the underlying copyrighted works is crucial for religious practice and commentary.126 When an individual’s free exercise of religion is implicated, the use of copyrighted works unquestionably implicates a liberty interest because one’s religious faith and beliefs are fundamental aspects of an individual’s identity. Consider the Ninth Circuit case, Worldwide Church of God v. Philadelphia Church of God, Inc.127 A religious organization, Worldwide Church of God (“WCG”) was developed by Herbert Armstrong. Armstrong wrote a book entitled Mystery of the Ages (“Mystery”). The copyright for the book was held by WCG. Two years after Armstrong’s death, the WCG decided to stop distributing and publishing Mystery in large part because the church doctrine had changed. The new church leaders thought Mystery was outdated and culturally insensitive. In particular, its leaders viewed Mystery as racist and out of step with the church’s current support for divorce and its rejection of Armstrong’s belief in divine healing. After Armstrong’s death, a splinter group of the church formed as the Philadelphia Church of God (“PCG”) and

124 Cf. United Christian Scientists v. Christian Science Board of Directors, 829 F.2d 1152, 1159 (D.C. Cir. 1987) (noting that copyright laws often protect religious texts). [add cites] 125 [add scientology lawsuits]. 126 United Christian Scientists, 829 F.2d at 1163 (“Words, of course, stand for religious positions of vast significance in the lives of thousands of believers.”). 127 227 F.3d 1110 (9th Cir. 2000). See also Bridge Publications, Inc. v. Vien, 827 F. Supp. 629 (S.D. Cal. 1993) (enforcing copyright law against defendant who used scientology texts in class on scientology and rejecting both fair use and First Amendment arguments that needed access to texts to practice her religion).

44 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. began using Mystery for its services and personal religious observance. This splinter group wanted to continue to practice the religion as originally set forth by Armstrong. Accordingly, the PCG copied portions of Mystery and distributed them free of charge to its adherents. WCG sued to stop PCG from copying and distributing Mystery. The Ninth Circuit rejected First Amendment and fair use defenses in the case. The court focused on the lack of transformativeness in the copying – a common problem in the First Amendment and fair use approach.128 A liberty approach would result in a different outcome because the use by PCG was a highly personal one, fundamental to each member’s religious and personal identity.

IV. Implications and Limitations

Thus far, I have set forth reasons that a liberty approach is on strong theoretical ground and suggested a number of situations in which the liberty interest is raised and should insulate otherwise infringing uses from liability. In this final part, I suggest some limitations on the scope of the liberty interest as well as some implications of the proposed approach.

A. Some Limitations

All constitutional rights (and most laws) present line drawing problems for courts and scholars. If the challenges of demarcating protected and unprotected zones or balancing competing interests stood as obstacles to constitutional rights, such rights would be meaningless. Nevertheless, some limiting principles are necessary to prevent a liberty approach from destabilizing copyright law. Such accommodations have been considered elsewhere where competing constitutional rights are involved and one must consider the nature and strength of rights on both sides of the equation.129 Substantive due process rights cannot be limitless. The Supreme Court in recent years has articulated a test restricting substantive due process rights to those that are rooted in history and

128 See discussion supra Part I.D. 129 See, e.g, Hudgens, 424 U.S. at 522.

45 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. tradition.130 The Supreme Court in Lawrence, however, made clear that the historical and traditional grounding of the specific right, e.g., homosexual sodomy, is less important than the theoretical grounding of those specific rights in larger longstanding historically-embraced principles such as intimate association or personal autonomy. Taking autonomy as a jumping off point provides a strong foundation for a variety of more specific rights. Limits on substantive due process should focus more on competing or conflicting interests than on initially justifying specific rights that are grounded in principles of autonomy. In the context of copyright law, the liberty interest in identity-based uses directly stems from our understanding of personhood and autonomy of self.131 When copyrighted works are used to describe one’s own experiences and the use is presented as such there should be the greatest level of constitutional protection afforded such uses. Defendants cannot use a liberty argument as a subterfuge for otherwise infringing activity by simply stating that the work is important to them personally. Courts will need to carefully evaluate the facts of a specific case to confirm that a defendant is not pretending to attach some important personal meaning when there is none. The motive of the use must be an identity-driven one, not one to profit from the work of another. Such determinations of motive are made elsewhere in IP cases and throughout the law,132 and there is no reason to think they will be any more difficult to make in the context of copyright cases and the proposed liberty-based analysis. Even though the motive is not to profit from the use, there can be an overall interest making a work for profit. Take for example the context of selling an autobiography that contains some letters written by someone else but sent to the writer. The autobiographer should be able to sell her work for a profit, unless the autobiography is told entirely or predominantly by another’s copyrighted words.

130 See Glucksburg. 131 See discussion supra Part III. 132 See, e.g., Simon & Schuster, Inc. v. Dove Audio, Inc., 970 F. Supp. 279 (S.D.N.Y. 1997) (despite claim that title of book was inspired by childhood teacher, the timing of the publication suggested that it was a copycat work based on plaintiff’s bestseller); [add ACPA & related cases].

46 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

Not every use of another’s copyrighted work will raise a liberty interest sufficient to overcome copyright protection. Under a broad view of autonomy, there may be a general liberty interest in using copyrighted works, but such uses may cause a variety of harms – to copyright holders, creators and the public more broadly (if there is damage to overall copyright system). The accommodation of such competing interests will require weighting of the relative interests, as well as the likely harms derived from the uses. For reasons discussed in Part III, when a user’s liberty interest is robust, the creator’s competing property, speech and liberty interests are unlikely to outweigh the user’s rights.133 Identity-based uses of copyrighted works are at the center of the liberty interest. The liberty interest in such instances will be nearly absolute. As uses move away from these central identity- based uses, they will increasingly be less compelling when compared against the competing interests of copyright holders, creators and broader calculations of the public interest.

B. Some Implications

1. Liberty-Based Uses Do Not Require Permission

When identity-based uses are at issue, no injunctions, criminal charges or other penalties should apply. Consider the previously discussed scenario in which a woman posts the Journey song “Don’t Stop Believin” to her blog. The song was playing when she was assaulted and she therefore has an unequivocal liberty-based interest to use this particular song. Journey might well decline to give permission for such a use. Musicians often refuse to grant permission to television shows and films to have its music playing during rape scenes and Journey might not want the public to form negative associations with their song. Regardless of whether she asks for permission or is denied permission, the use is a constitutionally protected one and no liability can follow her use. But what if she decides to fictionalize her story in a semi- autobiographical webisode (or movie)? She still has a liberty- based interest in being able to describe reality, even in fiction, but the specificity of the Journey song is no longer as important. The

133 See discussion supra Part III.

47 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. rape scene in her webisode is no longer about her life, but about her character’s life. In the context of the webisode, the song is fungible – it does not really matter whether the song is by Journey or another band – though there may be certain songs that are more appropriate than others given the themes and period of the work and the lyrics and popularity of the song. Nevertheless, there is likely an array of song choices that can be made.134

2. Generally Without Payment

Scholars who have called for greater First Amendment scrutiny in copyright cases have almost uniformly suggested that such uses should be paid for in some manner – whether in advance through a licensing regime or after the fact via the assessment of reasonable royalties.135 The modern law and economics movement has no doubt exacerbated this trend in copyright scholarship leading to a presumption that payment is always warranted. Such a conclusion, however, is out of step with long-standing principles of copyright law which has always accepted some free (as in gratis) uses. Fair uses have never been fared uses – if a use is a fair one, one need not ask permission to use the copyrighted work nor pay for that use. Identity-based uses of copyrighted works should not be tariffed through a compulsory licensing system, reasonable royalty or other paid use approach. In the context of the Journey song, the blogger has already paid once to access the song and should not have to pay again to copy it or post it publicly to her online diary. Identity-based uses are not fungible and the individual’s liberty interest justifies non-payment.

134 I leave for another day the implications of the liberty-based approach to uses of copyrighted works in fiction, but because such uses have moved out from the heartland of identity-based uses there will need to be greater accommodation of the copyright holder’s interests. I think that injunctive relief in such instances will generally not be warranted, but a compulsory licensing or reasonable royalty approach may make sense in that context in a way that it does not for identity-based uses. 135 See, e.g., Nimmer, supra note , at ; Goldstein; see also Neil Weinstock Netanel, Impose a Non-Commercial Use Levy To Allow Free Peer-to-Peer File Sharing, 17 HARV. J.L. & TECH. 1 (2003) (suggesting a non-commercial use levy on internet based uses of copyrighted works via fees on such things as internet access).

48 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

The idea that one may have a right to use property without paying is not unique to copyright law. Even in First Amendment law (outside the copyright context), in the few instances where one can use someone else’s property one need not pay for the right to do so. One can, for example, strike on private property – if the strike is directed towards the owner of that property – without paying a rental fee.136 To the extent that there is some market harm in the context of identity-based uses of copyrighted works the liberty-based interest trumps the property interests of the copyright holder.137

3. Entire Works Can Be Used

Given that identity-based uses are non-fungible, are there any limits on the amount of the underlying work that can be used? In some areas of the law, courts have adopted necessity-based tests to determine how much a person can use of someone else’s property or quasi-property. In the context of the nominative fair use defense in trademark law, for example, a defendant can only use so much of a mark as is necessary to make his point. Such a limit in the context of identity-based uses would not make sense since there is often no specific “point” being made in such uses. Moreover, setting a necessary limit will give too much latitude to second guess identity-based uses. The relevant inquiry should instead focus on the motive of the use – if the motive is driven by identity rather than profiting from someone else’s work, great latitude should be permitted for uses, including uses of works in their entirety. The blogger’s motivation to use the entire Journey song was derived from her actual experience and her effort to both describe and engage with that experience. Whether she needed to use that much of the song for her purposes should not be an inquiry we defer to courts. Similarly, in the case of the splinter church group, the case involving the Worldwide Church of God and the copying of the underlying religious text of its founder – the primary motivation of the copying was not to profit from the copyrighted work of another but to allow religious worship using that text.

136 I note that sometimes public spaces require payment of a reasonable permit fee. 137 See discussion supra at Part III.B.

49 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

Again, concerns about market harm from using the entirety of the works should be dismissed when compared with the fundamental liberty interest involved.

4. As Applied v. Facial Challenges

The liberty interest has little to say about many of the facial challenges that many copyright scholars have focused their attention on, for example copyright term extensions and the restoration of copyright protection.138 The liberty interest, however, likely would have something to say about the applicability of some of those laws in individual cases. For example, consider a violinist who has relied on the public domain nature of a musical work that he uses as his signature piece. His relationship to this public domain work rises to the level of a liberty interest and the restoration of that work’s copyright status should not affect his continued privilege to use that work. In fact, one of the only copyright cases permitting a substantive due process argument to proceed involved an argument that a group of artists had gained a substantive due process interest in public domain works that they had used for their work and artistic expression.139 One area where the liberty interest approach may have a contribution in a facial challenge is in the context of the DMCA’s anti-circumvention provisions and the scope of permissible digital rights management (DRM). Individuals who have a liberty interest in using a copyrighted work must have a way to do so. Either DRM needs to be limited to permit such uses or the DMCA needs to permit the sale and development of devices that permit such uses. Courts have routinely rejected First Amendment challenges to the anti-circumvention provisions of the DMCA,140 but a

138 See, e.g., Netanel, Locating Copyright (focusing on using the First Amendment to scrutinize broad changes to the Copyright Act, such as copyright term extension, but virtually dismissing the value of the First Amendment in the context of individual lawsuits). 139 Golan v. Ashcroft, 310 F. Supp.2d 1215, (D. Colorado 2004), affirmed on other grounds, Golan v. Gonzalez (10th Cir. 2007). 140 See, e.g., United States v. Elcom Ltd., 203 F. Supp. 2d 1111 (N.D. Cal. 2002) (concluding ban on sale and manufacture of devices to circumvent digital rights management does not violate the First Amendment) (the court also considered and

50 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. substantive due process liberty analysis might lead to a different conclusion. Otherwise the law is analogous to giving women the right to an abortion, but passing laws prohibiting all doctors from performing such procedures.

5. Rights Beyond Contract

A number of courts have permitted fair use to be limited or altered by contract.141 The liberty approach, however, would invalidate provisions of contracts that require consumers to give away their liberty interests in using copyrighted works. In the extreme, courts have invalidated contracts for servitude; it should follow that they should also invalidate contracts that require individuals to give up fundamental aspects of their own identity.

6. Reconceptualizing Fair Use?

The liberty interest that I identify could not simply be incorporated or subsumed into the fair use analysis. Fair use has often been categorized by courts as about the public interest writ large. As the Second Circuit has described, “the [fair use] doctrine offers a means of balancing the exclusive right of a copyright holder with the public’s interest in dissemination of information affecting areas of universal concern, such as art, science, history or industry.”142 The express fair use provision in Section 107 of the Copyright Act emphasizes these public justifications for uses by enumerating criticism, news reporting and teaching, but does not engage with more liberty-based and individual justifications for uses.143

rejected a due process claim based on vagueness, not on a substantive liberty interest basis). 141 See, e.g., Bowers v. Baystate Techs., Inc., 320 F.3d 1317 (Fed. Cir. 2003); but see CBC (8th Cir. 2008). 142 Triangle Publications, Inc. v. Knight-Ridder Newspapers, Inc., 626 F.2d 1171, (5th Cir. 1980); Meeropol v. Nizer, 560 F.2d 1061, 1068 (2d Cir. 1977); Rosemont Enters., Inc. v. Random House, Inc., 366 F.2d 303, 307 (2d Cir. 1966) (describing fair use as doctrine that permits subordination of “copyright holder’s interest in a maximum financial return to the greater public interest in the development of art, science and industry”). [Add legislative history discussion, latman, sen and h.reps] 143 See 17 U.S.C. § 107; see also New Era Pubs, Intl. v. Carol Publishing, Grp., 904 F.2d 152 (2d Cir. 1990) (“As long as a book can be classified as a work of criticism,

51 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission.

The fair use factors do a better job of protecting public, rather than individual, interests.144 The first fair use factor, for example, evaluates the character and purpose of the use and favors critical uses (whether of a scholarly or creative/parodic nature) and transformative ones. The fourth fair use factor – the effect on the market for the work – also favors critical uses because they are viewed as not interfering with a natural market of the underlying work since a creator will not generally sell or market works critical of his original work.145 Fair use, at least in its current incarnation, is therefore not up to the task of protecting identity-based uses with any reliability. I therefore prefer a separate liberty interest analysis, situated outside fair use. Nevertheless, empowering courts, litigants and others to infuse the fair use analysis with consideration of not just the public, but the individual value of the use could be beneficial. Moreover, if copyright reform is in our future, as some have recently posited, then newly drafted fair use factors could take into consideration such individual, liberty-based uses. My goal, however, is not to revitalize fair use – something I’m deeply skeptical will be successful – but instead to provide an alternative independent framework for evaluating the legitimacy of uses that may not be protected by fair use.

Conclusion

Courts have only rarely considered liberty-based challenges in copyright cases and so far there have been few success stories. If both First Amendment and substantive due process claims are made, courts often view the due process claim as subsumed in the First Amendment analysis.146 To be fair to my proposed theory, however, very few litigants have raised substantive due process arguments and most predated the decision in Lawrence. Moreover,

scholarship or research…[the first fair use factor] cuts in favor of the book’s publisher”). 144 I am not alone in so concluding. See, e.g., Jessica Litman, Lawful Personal Uses, supra note at . 145 Even under the expanded fair use regime in which licensing is broadly included under the market effect umbrella, something I and others have criticized, critical works are generally not expected to be licensed under a voluntary licensing regime. 146 See, e.g., Chicago Sch. Reform Bd, 79 F. Supp. 2d at ; see also supra note .

52 Rothman – Copyright Through A Liberty Lens Preliminary Draft – 8/2/08 Please do not cite, circulate or quote without permission. until now there has not been a scholarly theory upon which courts or litigants could rely. Lawrence in some sense clears the decks and provides an opportunity to rethink what role, if any, substantive due process and a liberty interest could play in IP cases. The liberty approach would lead to a very different set of protected uses than the currently articulated First Amendment approach would. I do not contend that a liberty-based approach is sufficient to safeguard all uses of other’s copyrighted works that might be warranted. There are instances in which I think the public interest does require, on a First Amendment basis, some dissemination of works. I do not challenge the position of scholars to date that the First Amendment should play a larger role in protecting uses of copyrighted works. Instead, I posit that the liberty-based approach provides a compelling alternative basis for protecting some uses. My goal here has not been to provide a single system to protect all justifiable uses of copyrighted works, but instead to provide a theoretical and constitutional fail-safe for those uses most integral to individuals. As more and more of copyright law becomes statutory rather than common law and it expands at a breakneck pace, there needs to be some theoretical and constitutional basis for limiting its reach, as well as a framework that one could potentially use for any statutory reforms. A liberty analysis provides a promising avenue for limiting the reach of technology and copyright over very personal, even if public, uses of copyrighted works. Even when personal uses are not political, private nor non-profit, they still are often fundamental to our personhood and our constitutional right to liberty.

53 Sex Exceptionalism in Intellectual Property

Jennifer E. Rothman Professor of Law and Joseph Scott Fellow, Loyola Law School [email protected] | Bio l SSRN

The state has long attempted to regulate sexual activity through a combination of criminal and civil sanctions and the award of benefits, such as marriage and First Amendment protections, for acts and speech that conform with the state’s vision of acceptable sex. Although the penalties for non-compliance with the state’s vision of appropriate sex are less severe in intellectual property law than those, for example, in criminal or family law, IP law also signals the state’s views of sex. Sex has long played a role in determining the scope of IP protection, especially in the context of copyright and trademark law. At common law, works, inventions, and marks deemed sexually explicit or simply suggestive were denied the protection of the law. Even today they remain disfavored in some contexts. A consideration of the treatment of sex in IP highlights some of the dangers of the differential treatment of sex in general and also some of the pitfalls of using the IP system to further goals unrelated to its core missions. This Article describes some of the ways IP law continues to devalue and channel sex. First, it considers trademark law’s explicit and implicit disfavoring of sexual content. This is most evident in trademark dilution law, where courts have read in an explicit prohibition on using marks or colorable imitations in sexual contexts. Second, the Article analyzes the ways that copyright law continues to treat works with sexual content differently and sometimes less favorably than other works. Finally, the project situates IP law’s treatment of sex in a broader critique of the law’s sex exceptionalism and normativity. Using copyright and trademark to channel sex provides yet another avenue for the law (and in this case art and commerce) to shape a vision of sex that is narrow, discriminatory, pejorative, and exclusionary. Works, marks, and uses of them should not be disfavored solely because they have sexual content nor should courts be in the business of assessing what constitutes good or bad sex.

Who are these People? New Generation Employees and Trade Secrets

Abstract

Elizabeth A. Rowe University of Florida, Levin College of Law

Traditional approaches to examining the efficacy of trade secret protection in the workplace are often focused on technological and process based measures. Indeed, much attention has focused on the use of technology, by itself, to stem trade secret misappropriation. This Article offers a novel approach to the problem by incorporating contextual factors that might be important to trade secret protection and focuses on the people. It also, for the first time, applies sociological theories about employee theft to trade secret misappropriation.

Working from the outside in, the Article examines first the reported societal effects on the values of those workers who make up the largest segment of today’s workplace. Namely, the characteristics of those labeled Generation X and Generation Y (collectively referred to in the Article as “New Generation Employees.”) Unlike the Baby Boomers these New Generation Employees, for instance, are likely to change jobs quickly, protect and prioritize their self-interests, expect immediate gratification and rewards from employers, start their own companies, and use technology with great ease.

The Article then discusses how the attitudes and behaviors of these New Generation Employees map closely to the circumstances that are often present in trade secret misappropriation cases. This suggests a possible upward trend in trade secret misappropriation as New Generation Employees outnumber others in the workforce. Moreover, the attitudes and behaviors of this group are integrated with sociological theories of employee theft in a framework that (a) offers some explanations about what motivates employees to misappropriate trade secrets and (b) offers corresponding general preventive measures to protect trade secrets in the workplace.

Finally, the Article considers more broadly the importance and usefulness of studying attitudes, behaviors, and cultural influences in intellectual property. Changes in attitude about intellectual property in general might have implications for innovation, protection, compliance, and enforcement norms in the United States. The Article also posits that this kind of analysis which combines social science with intellectual property law might also be of some benefit to the frustrations United States companies experience in dealing with the foreign enforcement of their intellectual property rights.

Outsourcing Trade Secret Misappropriation

Elizabeth A. Rowe Professor of Law, University of Florida Levin College of Law [email protected] | Bio

When a foreign individual or company misappropriates the trade secrets of an American company, and the acts of misappropriation occur entirely outside of the United States, the trade secret law of the United States generally will not apply. This represents the principle of extraterritoriality, and identifies a major vulnerability for companies that choose to conduct operations or engage in other business abroad. In such situations, the substantive and procedural laws of another country are likely to define whether the allegedly misappropriated information is protected and has been misappropriated.

Indeed, the civil trade secret jurisprudence in the U.S. currently lacks a specific framework for determining when U.S. trade secret law will apply to misappropriation that has occurred on foreign soil. I will explore this void in the law, and compare how extraterritorial jurisdiction is addressed in other areas of intellectual property. Moreover, a recent Federal Circuit opinion provides an interesting enforcement alternative that appears to circumvent jurisdictional issues for U.S. companies.

Using section 337 of the Tariff Act of 1930 (a trade statute that protects United States industry from unfair foreign competition) the Federal Circuit upheld the International Trade Commission’s decision to apply U.S. trade secret law to misappropriation that occurred in China. The Article will therefore further examine the significant implications of this new alternative. While it provides a welcome remedy to U.S. companies that have suffered misappropriation overseas, it nonetheless raises some interesting theoretical questions. Chief among these is whether the decision can be reconciled with existing principles of trade secret law and extraterritorial jurisdiction.

Orphan Works as Grist for the Data Mill

Matthew Sag Associate Professor of Law, Loyola University Chicago [email protected] | Bio | SSRN

The phenomenon of library digitization in general, and the digitization of so-called ‘orphan works’ in particular, raises many important copyright law questions. However, as this article explains, correctly understood, there is no orphan works problem for certain kinds of library digitization.

The distinction between expressive and nonexpressive works is already well recognized in copyright law as the gatekeeper to copyright protection—novels are protected by copyright, telephone books and other uncreative compilations of data are not. The same distinction should generally be made in relation to potential acts of infringement. Preserving the functional force of the idea–expression distinction in the digital context requires that copying for purely nonexpressive purposes (also referred to as non- consumptive use), such as the automated extraction of data, should not be regarded as infringing.

The nonexpressive use of copyrighted works has tremendous potential social value: it makes search engines possible, it provides an important data source for research in computational linguistics, automated translation and natural language processing. And increasingly, the macro-analysis of text is being used in fields such as the study of literature itself. So long as digitization is confined to data processing applications that do not result in infringing expressive or consumptive uses of individual works, there is no orphan works problem because the exclusive rights of the copyright owner are limited to the expressive elements of their works and the expressive uses of their works.

Reverse-Engineering Textual Meaning

Zahr K. Said Assistant Professor, University of Washington School of Law [email protected] | Bio

Scholars agree that despite its best intentions, copyright law is not aesthetically neutral. But they part ways over whether this lack of neutrality creates meaningful problems that the law should attempt to resolve. Typically, the aesthetic neutrality analysis arises with respect to choice of medium, style of work, subject matter depicted, and fairness of subsequent uses. In this paper, I argue that one way to get at the question of neutrality is to use “textual meaning” as a proxy. Whenever judges talk about the “meaning” of a text (here text is broadly defined to include any kind of expressive work), they are making a set of anterior interpretive and theoretical choices. Indeed, judges in copyright cases are often less than ideally straightforward about how they decide to interpret the works at the center of litigation. While procedural (and sometimes substantive) rules can govern how a judge must approach a particular work, more often than not, judges possess considerable latitude in deciding how they will choose, for lack of a better term, to read the works at issue. And how they read the text will often determine how they decide the case. I use a handful of copyright cases to demonstrate how theories of textuality are implicit in the judicial decisionmaking process, though not typically viewed as such. In particular, I examine how the judicial decision to consider or not to consider, inter alia, the author’s intention; extrinsic evidence concerning dissemination and reception of the work; and intrinsic evidence including formalist analysis of the work; can be outcome-determinative. My intention here is not to revive tired debates about the theoretical place of authors, nor to rehash their storied “death.” Rather, I aim to show that how one chooses to read a work matters. What a text is thought to mean and how it means can play an important role in copyright litigation. Therefore, we ought to be mindful of how courts seek to “discover” and reveal that meaning.

Why Gardens, Perfumes, Recipes, DNA, and Mathematical Formulae Are Not Copyright Subject Matter

Pamela Samuelson Professor, Berkeley Law School & School of Information [email protected]

U.S. copyright law vests exclusive rights in authors of “original works of authorship fixed in any tangible medium of expression.” The statute identifies eight specific types of works that are encompassed within this general category as copyright subject matter. The legislative history, as well as the structure, of this provision contemplate that the eight are listed not exclusive. One reason for the inclusive and general nature of the copyright subject matter provision was to make it possible to add new subject matters to copyright if advances in technology brought new types of authorship into being. But how expansive is copyright subject matter under U.S. law? If there are some types of intellectual creations that would meet copyright’s originality and fixation criteria, should they be deemed copyright subject matter? What kinds of limits are there to categories of things that should be deemed “works of authorship”? This article will consider some policy reasons why gardens, perfumes, recipes, genetically modified DNA, and mathematical formulae should not be considered copyright subject matter.

BE CAREFUL WHAT YOU WISH FOR: TRADE SECRETS AND THE AMERICA INVENTS ACT

Sharon K. Sandeen Professor of Law, Hamline University School of Law [email protected] | SSRN

In 1974, numerous businesses and practicing lawyers anxiously awaited the decision of the U.S. Supreme Court in Kewanee v. Bicron Oil Corp. (See The Evolution of Trade Secret Law and Why Courts Commit Error When They Do Not Follow the Uniform Trade Secrets Act, 33 Hamline L. Rev. 493 (2010).) At issue was whether the preemption principles that had been announced ten-years earlier in the famous Sears/Compco cases would be applied to preempt state trade secret law. A collective sigh of relief was heard among the business community and practicing bar when the U.S Supreme Court ruled that state trade secret law was not preempted by U.S. patent law. Since that time, it has been assumed that trade secret law and patent law can co-exist. This paper examines whether this assumption is still accurate in light of the recent adoption of the Leahy-Smith America Invents Act (the AIA) and the changes it has wrought to patentable information that is held in secrecy.

In a previous article, Kewanee Revisted: Returning to First Principles of Intellectual Property Law to Determine the Issue of Federal Preemption, 12 Marquette Intellectual Prop. L. Rev. 299 (2008), I explored whether the underlying reasoning of Kewanee continued to be viable in light of post-1974 changes to the scope of patent and copyright protection. I concluded that although the result of Kewanee was still correct, its underlying reasoning did not withstand the test of time. I was particularly concerned with the preemption analysis “as applied” and argued that when trade secret law is properly limited (as defined by the Court in Kewanee), it is not likely to be preempted by patent and copyright law. This does not mean, however, that individual trade secret claims can never be preempted.

My concern in this article is different from the concern that animated my earlier work. The question that this article seeks to answer is: In light of the AIA can it still be argued, as the Court in Kewanee stressed, that inventors are more likely to choose patent law over trade secret law? Or do the changes to the definition of “prior art” under the AIA make it more likely that businesses will choose to protect their information as trade secrets?

Before the adoption of the AIA, businesses arguably faced a clearer choice between trade secret protection and patent protection because secret uses of putative trade secret information would count as prior art for purposes of determining the patentability of an invention. The classic case that illustrates this principle involved oil drilling technology. (See Rosaire v. National Lead Co., 218 F.2d 72 (5th Cir. 1955).) Although the invention was not visible to passers-by because it was used underground, the open and non-secretive performance of drilling operations within the United States met the “known and used” limitation of 35 U.S.C. § 102(a) and served to invalidate the plaintiff’s patent. This language no longer exists under the AIA, raising the issue whether it can still be assumed that most inventors will choose patent protection over trade secret protection when it is available.

In order to answer the foregoing question it is necessary for me to surmise (like the Court in Kewanee did) how a reasonable inventor might act given the choice of patent and trade secret protection in the post-AIA era. Fortunately, unlike the Kewanee Court, I need not rely upon simple logic or the assumed value of patents since numerous studies concerning inventor motivations now exist to strengthen my analysis. However, because the AIA has only recently been adopted and has yet to go into full-effect, it is anyone’s guess how it will ultimately play out. Hopefully, this article will assist businesses and their lawyers to make the optimal choice between patent and trade secret protection. Governmental Innovation Mechanism Choices (with reference to Climate Change)

Joshua Sarnoff Associate Professor, DePaul University College of Law [email protected] | SSRN

Numerous options exist for governments to develop technologies. These include: (1) procurement, using government purchasing power to demonstrate commercial viability and reduce risks of market entry; (2) direct development, using government funding and personnel to develop technologies; (3) subsidies, including tax credits, refunds, and other mechanism that fund research and development (particularly through universities) and including purchases (such as feed-in tariffs) that promote market substitution behaviors; (4) various government encouragements (such as voluntary programs and certifications) and threats (of more aggressive government regulation, such as compulsory licensing or antitrust scrutiny); and (5) ex-post market entry regulatory actions (including acting on threats and directly regulating price or supply). Few studies exist of the comparative performance and relative costs and benefits of choosing any of these mechanisms. Yet trillions of dollars will soon be spent on upgrading our energy, transportation, and other infrastructure and on purchasing mitigation and adaptation technologies to respond to climate change. This article will discuss the current state of analysis and will propose comparative tests that could be developed and used to determine what government choices may work best over time, in what cultures and circumstances.

Teams, Creativity, and the Firm

Anthony J. Casey Assistant Professor, The University of Chicago Law School

Andres Sawicki Bigelow Teaching Fellow and Lecturer in Law, The University of Chicago Law School Associate Professor, University of Miami School of Law (Fall 2012) [email protected] | Bio | SSRN

This paper will examine the intersection of intellectual property law and theories of the firm. The existing literature in this area has almost exclusively applied the property- rights theory of the firm pioneered by Grossman, Hart, and Moore. We have two claims. First, we will show that the property-rights theory of the firm leaves significant gaps in our understanding of the production of intellectual property goods. Second, we will explain how other theories of the firm—especially those associated with the work of Coase, Alchian and Demsetz, and Williamson—can help fill those gaps.

The property-rights analyses suggest that as intellectual property rights become stronger, parties can better reduce hold-up threats by more effectively allocating residual-control rights ex ante; market transactions over residual-control rights can then supplant vertical integration as a mechanism for organizing innovative and creative production. On this view, optimally strong property rights reduce the frequency of integration. But the property-rights theory cannot explain organizational behavior when intellectual property rights are weak (or nonexistent) and there is correspondingly little (or nothing) for parties to transfer. This is because that theory depends on the ability to transfer residual-control rights. And, crucially, a primary input of intellectual production—the creative function of the mind—cannot be owned in the property-rights sense. Parties cannot effectively allocate residual-control rights to creative mental inputs to the production of intellectual property goods; these creative mental inputs therefore cannot form part of the property-rights firm.

Nonetheless, we do see organizations of creative inputs that look like firms. For example, movies are made by hierarchies with a director or producer who allocates and reallocates resources without resort to a market. Similarly, there is an emerging market for hierarchically-authored novels. We intend to show that these firms are designed not to reduce hold up but to capture the value of collaborative creation that is facilitated by team production in a managed hierarchy. Viewing these organizations as firms, we suggest a broader approach incorporating other theories of the firm (with some focus on team production) to explain how the production of intellectual property goods is organized.

This approach has important payoffs for our understanding of organizational theory in the production of intellectual property goods. We do not reject property-rights theories entirely; while those theories can help explain the integration of intellectual or creative inputs with complementary assets in larger production and development functions, they do not provide a satisfactory explanation for the organization of the intellectual inputs themselves. Thus, while current theories of intellectual property and the firm suggest that suboptimally weak property rights lead to larger firms, we suggest that for the production of much of intellectual products, weak property rights (and rights in creative inputs are generally weak) will tend to make firms smaller. Moreover, while existing theories suggest that advances in contracting will tend to make firms small, we suggest that advances in contracting will often cause firms to grow larger because benefits other than the reduction of hold up can be obtained by integration.

We also explore the implications of our analysis for particular intellectual property doctrines. Consider, for example, the derivative works right. This doctrine strengthens copyright protection in exactly the manner that we suggest will allow collaborative firms to integrate creative inputs by enabling specialization in the monitoring of particular kinds of creative inputs. A strong version of this right would give the copyright holder control over a broad range of follow-on work; a weak version would give very little control. Thus, contrary to existing theories, we argue that the stronger the derivative works right, the larger the firm.

In short, the organization of collaborative creative inputs into a firm cannot be explained by a property-rights theory because the sources of the inputs often cannot be integrated in the property-rights sense of obtaining rights of residual control. In those instances, the theories we explore here provide a better explanation of how inputs to the production of intellectual property are organized. The Presumption of Validity in Patent Litigation: An Experimental Study

David L. Schwartz Assistant Professor, Chicago-Kent College of Law [email protected] | Bio

Christopher B. Seaman Visiting Assistant Professor, Chicago-Kent College of Law Assistant Professor, Washington and Lee University School of Law (Fall 2012) [email protected] | Bio

In this project, we are experimentally testing the importance of burdens of proof in determining the validity of a patent in litigation. The genesis of these experiments is the Supreme Court decision in Microsoft Corp. v. i4i Limited P'ship, 131 S. Ct. 2238 (2011). In i4i, the Court rejected Microsoft's claim that a jury need only be persuaded by a preponderance of the evidence to find a patent invalid, at least when the evidence before the factfinder regarding invalidity was not considered by the PTO during the examination process. Instead, it reaffirmed that an invalidity defense must be proven by clear and convincing evidence. But the Court also concluded that if the party challenging a patent's validity relied on evidence not previously considered by the PTO, then the jury should be instructed that this burden "may be easier to sustain." Id. at 2251.

Currently, there is a dearth of evidence about whether modifying or eliminating the clear and convincing evidence presumption would result in different outcomes regarding patent validity in litigation. In this project, we have conducted a series of experiments to empirically examine this issue. In these experiments, each subject received short fact pattern simulating the information considered by a juror in a patent infringement lawsuit. The fact pattern is loosely based upon a real case involving relatively simple technology—golf ball design. See Callaway Golf Co. v. Acushnet Co., 576 F.3d 1331 (Fed. Cir. 2009). After reading the fact pattern and a summary of the parties' arguments regarding invalidity, subjects received one of three jury instructions informing them of the burden of proof: (1) a control version (clear and convincing evidence), (2) a first treatment version with the language based on the Court's decision in i4i (clear and convincing evidence, but this burden is easier to satisfy if the invalidity claim relies on evidence not previously considered by the PTO), and (3) a second treatment version (preponderance of the evidence).

Our results suggest that the effect of the Supreme Court’s i4i decision may be more complicated than is apparent from an analysis of the decision itself. Following the Supreme Court's reasoning in i4i, we anticipated that the burden of proof for an i4i-type instruction would result in an intermediate standard between plain clear and convincing evidence (highest) and preponderance of the evidence (lowest), and the percentage of invalidity findings by respondents would reflect this. This expectation was partially supported by our experiment, which found a statistically significant difference in

subjects' decisions between the clear and convincing standard and the preponderance of the evidence standard, with the latter more likely to result in judgments of invalidity. However, the i4i-type instruction surprisingly resulted in invalidity decisions that were statistically indiscernible from the preponderance of the evidence standard. These findings were robust even when we made semantic changes to the wording of the i4i- type instruction. We plan to perform further experiments to understand more about the role of burden of proof instructions in patent cases. If our preliminary results hold after additional experiments, they may reshape views about the i4i decision and jury instructions in patent litigation more broadly.

Selling Information

Jeremy N. Sheff Associate Professor of Law, St. John’s University School of Law [email protected] | Bio | SSRN

The boundaries between the distinct subfields of intellectual property—and in particular between trademark on the one hand and patent or copyright on the other—are under increasing strain. As copyrighted works fall out of the public domain, cases like Dastar v. Twentieth Century Fox and Fleischer Studios v. A.V.E.L.A. will increasingly test the boundaries between trademark and copyright. And as useful products take on social connotations and the rents flowing from patent monopolies continue to increase, the boundary between patent and trademark has come under strain in functionality cases from Traffix Devices vs. Marketing Displays to Louboutin v. Yves Saint-Laurent. There is an ad hoc quality to the courts’ approaches to these boundary problems, rendering the boundaries themselves unstable. Some theoretical support for the decisions in individual cases is warranted.

In this article I hope to begin to provide such support. I will argue that the distinction between trademark rights on the one hand and patent or copyright rights on the other can be discerned by examining the role of information in the transactions the parties to these boundary disputes are engaged in. I submit that trademark law is less about incentivizing the laborious creation and dispersal of new information (which then itself becomes the subject of commercial exchange, as in copyright and patent) than it is about regulating the flow of information that already exists, as an aid to the completion of transactions in goods and services other than the information in question. Therefore, I propose a distinction between claims to rights in information that has value in itself and claims to rights in information that has value only as an adjunct to transactions in other goods or services. Where the claimed subject matter is information that has value in itself, the intellectual property right at stake must be either a patent or a copyright, and is subject to all the limitations of those forms of intellectual property. Where the claimed subject matter has value only in the context of a transaction in some other good or service, the intellectual property right at stake must be a trademark, and is subject to all the limitations of trademark law.

This simple distinction has far-reaching implications, particularly for the scope of competition. Recognizing intellectual property rights in information that has value in itself forecloses competition to a far greater extent than recognizing rights in information that merely facilitates transactions in other things. This is because the latter type of information can usually be conveyed via a variety of means, but information that has value in itself is unlikely to have equally satisfactory substitutes. Thus, the question whether an intellectual property claimant or its adversary is selling information, or is instead using information to sell something else, has tremendous implications for the allocation of value in markets where those parties operate. Answering this question thus ought to be a threshold step in intellectual property disputes at the boundaries of multiple regimes.

This article will survey the various doctrines within intellectual property law that implicate the distinction between information that sells and information that is sold, and suggest opportunities for refinement. In particular, while courts often treat cases at the boundaries of intellectual property regimes as all-or-nothing questions as to the existence of a right in the plaintiff, recognizing the distinction I have proposed suggests opportunities for less absolutist resolutions of competing claims. This is particularly true in hybrid cases where the subject matter in dispute has value both as information in itself and as a vehicle for information about some other good or service, or where the subject matter of exchange bundles independently valuable information together with some other good or service. In such cases, innovative doctrinal approaches including limitations on the scope of otherwise valid intellectual property rights, tailored remedies, burden-shifting regimes, and defenses may be appropriate means of reinforcing the boundaries between intellectual property regimes so as to promote salutary competition both in markets for information and in markets for other goods and services. Patent Examination in the Venetian Republic (1414-1788)

Ted Sichelman Associate Professor, University of San Diego School of Law [email protected] | Bio

Sean O’Connor Professor of Law and Faculty Director, Law, Business & Entrepreneurship Program University of Washington School of Law [email protected]

The Venetian Republic is widely recognized as adopting the first formal patent system in its Patent Act of 1474. Legal scholars have generally assumed that after the passage of the Act, the patent examination process adhered to the requirements and process set forth in the Act. In this article, using original documents from the Venetian State Archives, we show that the examination process often deviated substantially from the provisions in the Patent Act. Rather, the Patent Act merely confirmed via example previous “customary law” regarding the examination and grant of patents, and did not intend to override the flexibility present in the customary law. We posit that this misunderstanding of how the Patent Act functioned in practice stems from the apparent fact that no legal scholar has yet to examine the original archival documents, instead relying upon the writings of historians and political scientists, who have typically failed to understand the legal nuances of the Venetian patent system. Here, we present a detailed account of how Venetian and foreign inventors applied for patents, how the examination process worked, and the specific requirements needed to be met in practice to secure a Venetian patent. An accurate description of this process is important to fully understanding the drivers and effects of the first patent system in the world, and its ramifications for patent law today. Clarifying the Analogous Arts Test

Brenda M. Simon Associate Professor, Thomas Jefferson School of Law [email protected] | Bio | SSRN

Only art from a field sufficiently analogous to that of the invention can be considered in determining obviousness. Consequently, obviousness often hinges on whether the court or an examiner deems a reference analogous art. The analogous arts test has been criticized for its subjectivity and viewed as an expedient for approving “complex inventions difficult for judges to understand” and excluding “less mysterious inventions a judge can understand.”1

In KSR, the Supreme Court indicated that a person of ordinary skill should take into account references in other fields, stating that if “a work is available in one field of endeavor, design incentives and other market forces can prompt variations of it, either in the same field or a different one.”2 Courts have expanded the scope of analogous arts to cover ever more divergent fields of invention, yet it is questionable whether evidence from those of ordinary skill in the art would have supported such a broad conception of analogous arts. In light of the expansive range of references available through computerization, crowd-sourcing, and enhanced search capabilities, the question becomes where the limits on analogous art should be.

In determining the scope of analogous arts, courts and examiners should assess whether those of ordinary skill in a given art actually would have considered a reference at the time of invention. Courts should be acutely sensitive to the risks of hindsight bias when relying on their own “common sense” in lieu of expert testimony and other evidence. Focusing the analogous arts determination should help mitigate its subjectivity and bring clarity to a test that can be useful in ascertaining obviousness.

1 Panduit Corp. v. Dennison Mfg. Co., 810 F.2d 1561, 1572 (Fed. Cir. 1987). 2 KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 417 (2007) (emphasis added). The Confusion Trap: Rethinking the Parody Doctrine in Trademark Law

David A. Simon Fellow, Project on Law & Mind Sciences & Visiting Researcher, Harvard Law School [email protected]

In this Article I examine the parody doctrine in U.S. trademark law using two lenses. The first lens is trademark doctrine itself. Here I explore the various approaches courts use to resolve trademark disputes involving parody. The other lens is copyright law. Though this lens I examine how courts deciding trademark parody disputes employ the Supreme Court’s most recent decision on parody in copyright, Campbell v. Acuff-Rose. I also use this decision to examine the relationship between copyright and trademark parody claims. In other words, I ask the following questions: how, if at all, are copyright and trademark claims related in parody cases.

Each perspective reveals something different. The first perspective shows that most courts resolve infringement claims by evaluating parody within some form of the likelihood of confusion test. It also shows that most courts assess dilution claims by analyzing parody as a form of noncommercial speech. The second perspective shows that copyright and trademark claims are related in a positive direction: if a parody case involves both copyright and trademark claims, courts always find for the defendant (no infringement) on both claims. Filtering the analysis through these two lens, I seek to sketch two revised parody tests—one for infringement and one for dilution. Both tests attempt to differentiate parody analyses from the traditional likelihood of confusion and dilution tests. These new approaches—which strengthen speech protections but do not create absolute defenses—account for the legitimate interests of both trademark owners and parodists. David A. Simon is currently based at Harvard Law School, where he is a Visiting Researcher and a Fellow at the Project on Law & Mind Sciences. He is also a Ph.D. candidate at the University of Cambridge - Trinity College, where he is writing a dissertation on the philosophy and psychology of moral rights in copyright law. David has written and published widely on various issues in intellectual property, and has also published articles on constitutional law and judicial behavior. Measuring the Incentive Effects of Innovation Thresholds in Intellectual Property

Christopher J. Sprigman Class of 1963 Research Professor University of Virginia School of Law [email protected] | Bio

IP law establishes legal rules aimed at bolstering innovation by providing incentives to creators. Whether it does so successfully, however, has rarely been studied. In this paper, I will report the results of experiments testing the differential effects of rules conditioning protection of creators’ work on the creators achieving certain thresholds of creativity. The experiment is meant to model our copyright and patent laws, which set very different thresholds for the amount of creativity necessary to secure IP rights. Copyright law requires only a minimal spark of creativity to merit protection, while patent law, through its novelty and nonobviousness requirements, insists upon a showing of very significant creativity relative to copyright. Based on recent research in the social sciences, I suspect that these different creativity thresholds may generate different incentive effects on creators.

I have designed different creativity tasks – one based on a version of the old “Oregon Trail” computer game and one based on “Odyssey of the Mind” verbal problems – that enable us to measure the quality of creators’ innovation when subjected to different rules regarding the minimum threshold of creativity sufficient for protection. The initial data suggest that the different IP regimes in fact have a significant impact on creators’ behavior – creators perform better when subjected to a high (patent-style) threshold for success than for a low (copyright-style) threshold. The presentation will describe these data and discuss their implications for IP law and policy.

Individuality or Multiplicity of “the Work”: Tracing an Evolving (and Perennial) Concern of Copyright Law and Policy

Eva E. Subotnik Assistant Professor, St. John’s University School of Law [email protected] | Bio l SSRN

Copyright law has traditionally been concerned with “the work.” Copyright protection attaches at the level of the work, and it is on a work-by-work basis that infringement claims typically have been assessed. Of late, however, some of the most controversial models for operating in copyright space have emerged at the level of multiple works. For example, the practice of bulk registration of photographs through registration of an automated database that does not identify the individual photographers’ names has come under challenge. Likewise, the litigation model under which certain news outfits “outsourced” the copyright policing of their works to Righthaven LLC provoked concern among some. Perhaps most pressing are the problems that arise out of mass digitization projects. At one point, the Google Books litigation, through the proposed settlement, might have served as a judicially-approved, streamlined mechanism for resolving copyright claims appurtenant to millions of works. Now, whether the case can still serve as such a vehicle will depend, in part, on how the court resolves whether “individual issues predominate” with respect to copyright ownership and fair use. Although they are just examples, each of these instances has reflected the challenges posed by the modern desire to make use of copyrights, and of copyrighted works, en masse, especially in the absence of a comprehensive licensing system. In this article, I am teasing apart the kinds of “individual” and “multiple” dynamics at play in these and other recent developments. For example, in some instances the relevant issues relate to ways of structuring a single copyright holder’s relationship to his or her multiple works. Other instances relate to mechanisms for dealing with multiple authors’ relationships to their individual or multiple works. Looking back in time, I will consider some ways in which these tensions in the appropriate focus of copyright were in fact present under pre-digital copyright regimes. By tracing the evolving practices that press the copyright system to confront how various stakeholders seek to manage and use multiple works, I hope to draw some useful conclusions about how copyright should be viewed today. At bottom, I argue that through such comparative analyses we can more clearly resolve whether copyright law and policy in the modern technological era should be driven principally by concerns about individual, or multiple, works. Reconceptualizing the Idea of Responsibility in Copyright Law

Haochen Sun Visiting Professor of Law, UC Davis Law School (Fall 2012) Assistant Professor of Law and Deputy Director, Law & Technology Center, University of Hong Kong [email protected] | Bio

(forthcoming in Harvard Journal of Sports and Entertainment Law (winter 2012))

This Article puts forward a new ethical theory of copyright protection by examining the ethics of responsibility that should be channeled into copyright law. It considers how and why copyright law should be reformed to embrace a strong vision of copyright holders’ responsibilities. It argues that a copyrighted work is not only the embodiment of its author’s thought and personality, but also the embodiment of the social enterprise of sharing intangible resources to promote creativity, of shaping people’s cultural power, and of pursuing the quest for justice. These social values inherent in all copyrighted works provide the ethical justification for introducing into copyright law the ethics of responsibility and enforcing it as a core function of copyright law. Following the ethics of responsibility that this Article proposes, copyright law should function to grant exclusive rights to copyright holders, and also to impose social responsibilities on them. Moreover, the Article argues that the ethics of responsibility can address the limitations of the First Amendment and the Copyright Clause of the U.S. Constitution in protecting the public interest in access to copyrighted works.

This Article is divided into three parts. Part I reveals that there has been a massive irresponsibility mentality among many copyright holders. It further examines the roots of the irresponsibility mentality and the reasons why copyright law has failed to deal with this problem. Part II considers the ethical basis for imposing responsibilities on copyright holders. It shows that while individual rights are crucial for each individual, responsibilities are crucial for shaping social membership. Copyright holders have dual identities as individuals and as social members. Responsibilities should be imposed on copyright holders because they are social members who receive benefits from publicly available cultural resources and are situated in the larger network of cultural participation and distribution of social resources. It then argues that copyright law should have dual functions: protecting copyright holders’ rights and enforcing their responsibilities.

Part III of this Article moves on to explore the extent to which the ethics of responsibility can be translated into legal rules in copyright law. It argues that this transition should involve two crucial steps of implementation. The first step deals with the assimilation of what I call the responsibility policy into copyright law as a central concern for making legislative and judicial decisions on copyright protection. The second step involves applying the responsibility policy and redefinition of the nature of copyright limitations in order to reform copyright law. The reform should introduce legal rules to enforce two kinds of copyright holders’ responsibilities: negative responsibilities and collective responsibilities. Learning By Doing Madhavi Sunder Professor of Law, UC Davis [email protected]

Modern intellectual property laws are understood as a tool for promoting knowledge disclosure. But as “learning-by-doing” and theories of tacit knowledge show, knowledge is disclosed not just by reading but by doing and interacting with others in social settings. While many have described the role of learning by doing in the realm of science, this Article explores the ways in which physical, or haptic engagement in social settings matters for the humanities. What is the role of music, dance, and dramatic performance in human life? This Article critically considers the law regulating such human activities, the law of cultural merchandising. While other work addresses the important activity of fan fiction—extending the fictional world through written stories—this paper explores the efforts to extend stories through the material world. Children have always imagined themselves as part of the literary fantasy worlds about which they read, from Grimm’s fairytales to the folktales of Hans Christian Anderson. But over the past three decades the phenomenon of putting oneself into the story has transformed from child’s play into serious business. Today, cultural merchandising from Star Wars action figures, to Harry Potter wands, and Indiana Jones Lego play sets is a $100 billion dollar a year enterprise. Cultural play increasingly involves “officially licensed” cultural merchandise—from games and toys to lightsabers and wands, Darth Vader costumes and Harry Potter glasses, to wizard’s and witch’s fare to taste. Cultural merchandising is so profitable it has become a driver of cultural production itself, with Hollywood studios choosing which projects to pursue based on the merchandising potential of the film or television series. How should the law regulate who has the right to bring alive a fictional universe by allowing for physical play with intangible worlds?

Madhavi Sunder is Professor of Law at the University of California, Davis. A graduate of Harvard College and the Stanford Law School, she clerked for Judge Harry Pregerson of the Ninth Circuit Court of Appeals. She practiced law in New York with Cleary, Gottlieb, Steen & Hamilton. She has been a visiting professor at Yale Law School, the University of Chicago Law School, and Cornell Law School. Her articles have appeared in the Yale Law Journal, the Stanford Law Review, the California Law Review, and Law & Contemporary Problems. She is the author of a new book, From Goods to a Good Life: Intellectual Property and Global Justice, published by Yale University Press in 2012. Fair Use, Transaction Costs, and Computable Contracts

Harry Surden Associate Professor of Law, University of Colorado Law School [email protected]

The fair use doctrine protects certain non-authorized uses of copyrighted works from copyright liability. Wendy Gordon and others have argued that we should understand some fair use contexts in terms of transaction costs. When transaction costs are high relative to the value of a use of a work, a market transaction authorizing the use will not occur. In these contexts, fair use can be justified to remedy this market failure. In this variant of fair use, the goal is to ensure that a class of desirable uses still occurs even when transaction costs prohibit explicit authorization. Such a fair use justification may require reexamination in light of increased automation in contracting.

Computable contracts are contracts expressed in terms of computer-processable data rather than in ordinary writing. Firms create computable contracts so that computer systems can understand and automatically assess compliance with some or all of the terms of the agreement. For example, in the last decade within the financial domain, firms have begun to routinely express contractual arrangements for standardized financial instruments in this data- oriented, computable form. There is reason to believe that similar data-oriented contractual and licensing arrangements will become more common in the intellectual property realm with impending electronic infrastructure advances.

Computable contracting has the effect of reducing certain transaction costs involved in contracting. This paper argues that market-failure fair-use justifications will be undermined as contracting transaction costs decrease due to increased automation. Current justifications are premised upon and presume a traditional contracting paradigm in which contracting transaction costs often result in a market failure for low-value uses of copyrighted works. Computable contracting changes this default assumption by reducing transaction costs for small valued uses in domains where they are applicable. This article explains how the fair use doctrine will require re-evaluation in light of these contextual changes concerning its foundational premises. Moreover, certain other non-economic fair-uses that are currently, but implicitly, protected by contracting transaction costs may also erode as an artifact of increased automation.

From Real-Time Intercepts to Stored Records: Why Encryption Drives the Government to Seek Access to the Cloud

Peter Swire C. William O'Neill Professor of Law, Ohio State University Senior Fellow, Center for American Progress Senior Fellow, Future of Privacy Forum [email protected]

This paper explains how changing technology, especially the rising adoption of encryption, is shifting law enforcement and national security lawful access to far greater emphasis on stored records, notably records stored in the cloud. The major and growing reliance on surveillance access to stored records results from the following changes:

(1) Encryption. Adoption of strong encryption is becoming much more common for data and voice communications, via virtual private networks, encrypted webmail, SSL web sessions, and encrypted Voice over IP voice communications.

(2) Declining effectiveness of traditional wiretaps. Traditional wiretap techniques at the ISP or local telephone network increasingly encounter these encrypted communications, blocking the effectiveness of the traditional techniques.

(3) New importance of the cloud. Government access to communications thus increasingly relies on a new and limited set of methods, notably featuring access to stored records in the cloud.

(4) The “haves” and “have-nots.” The first three changes create a new division between the “haves” and “have-nots” when it comes to government access to communications. The “have-nots” become increasingly dependent, for access to communications, on cooperation from the “have” jurisdictions.

Part 1 of the paper describes the changing technology of wiretaps and government access. Part 2 documents the growing adoption of strong encryption in a wide and growing range of settings of interest to government agencies. Part 3 explains how these technological trends create a major shift from real-time intercepts to stored records, especially in the cloud. This shift has important implications for communications and access to communications over the Internet. It also will highlight jurisdictional and choice of law issues for government agency access to stored communication and other records globally.

The Federal Circuit: Standing in the Breach

David O. Taylor Assistant Professor, SMU Law [email protected] | Bio | SSRN

My work-in-progress relates to the relationship between the U.S. Court of Appeals for the Federal Circuit and the U.S. Supreme Court.

The Federal Courts Improvement Act uniquely specified the Federal Circuit’s jurisdiction in terms of subject matter rather than geography. As part of the legislative history of the Act, Congress indicated that it sought to create a single court to hear appeals in patent cases for numerous reasons: to strengthen the U.S. patent system, to foster technological growth and industrial innovation, to make rules applied in patent litigation more predictable, to eliminate forum shopping among regional courts of appeal, and to increase uniformity and reduce uncertainty in substantive patent law. In short, Congress established the Federal Circuit as a specialized court to achieve goals the Supreme Court singularly failed to achieve.

But, as the Supreme Court reminds the Federal Circuit from time to time, the Supreme Court still exists. During the Federal Circuit’s early years, the Supreme Court did not grant many petitions for writ of certiorari to the Federal Circuit. In recent years, however, the Court has done so with increasing frequency. Moreover, it fairly consistently has reversed the Federal Circuit in patent cases.

In my article I study how the Federal Circuit has developed patent law over the last thirty years, and how the Supreme Court’s supervision of that development has changed over that time period. I assess whether the Federal Circuit, as supervised by the Supreme Court, is succeeding in the goals set for it by Congress. And I defend the radical position that the Federal Circuit’s recently exposed bent toward rule-based formalism— an adjudicatory approach roundly criticized by the Supreme Court itself and practically all other previous commentators—reflects not only the expected but also the preferred practice of a specialized court.

UTSA Preemption and the Public Domain: How and Why Courts Have Overlooked Patent Preemption of State Law Claims Alleging Employee Wrongdoing

Charles Tait Graves Partner, Wilson Sonsini Goodrich & Rosati Adjunct Faculty, University of California, Hastings College of Law [email protected] | Bio

Elizabeth Tippett Assistant Professor, University of Oregon School of Law (Fall 2012) [email protected]

Our article explores a blind spot in trade secret cases involving disputes between employers and departing employees – specifically, cases which take the minority position on Uniform Trade Secrets Act preemption of alternative state law tort claims and thereby permit litigants to proceed with such claims. A review of nationwide cases indicates that such courts do not consider whether the technical information at issue in many such disputes falls within the public domain, such that the alternative state law tort claim would conflict with – and therefore should be preempted by – the federal patent laws.

Whether the Uniform Trade Secrets Act preempts state law tort claims that seek to protect information deemed not to constitute a trade secret is now a widely litigated issue. There is a majority position and a minority position. The minority position holds that litigants may pursue state law tort claims to protect commercial information said to be “proprietary” or “confidential” in some undefined manner, but not a UTSA trade secret, and that the UTSA does not displace such claims. This creates a two-tier system of state-protected intellectual property, rather than the single-tier system the majority position envisions.

A separate body of law – federal preemption – provides that states may not grant intellectual property protection in unpatented, technical information that is in the public domain. The minority position on UTSA preemption and federal preemption therefore appear to be on a collision course: if courts hold that the UTSA does not foreclose litigants from pursuing alternative state law tort claims that may well encompass publicly available, technical information, then federal preemption could separately preclude such claims.

Our article explores the complex but surprisingly common legal and factual scenarios in which employers have been permitted to proceed with alternative state law tort claims against former employees accused of misappropriating potentially public information. State and federal courts generally do not address federal preemption in such cases, when perhaps they should. We then discuss the policy implications of allowing employers to cordon off such information from future use by their former employees.

Elizabeth Tippett will be joining the faculty at the University of Oregon School of Law as an Assistant Professor in Fall 2012. She is currently an employment law and trade secrets attorney at Wilson Sonsini Goodrich & Rosati, where she represents technology companies in federal and state court in litigation relating to trade secret misappropriation, employment contracts, and employment discrimination. Elizabeth also counsels start-up companies on compliance with applicable employment laws, and advised on employment aspects of large mergers and acquisitions.

Ms. Tippett’s most recent article, Robbing a Barren Vault: The Implications of Dukes v. Wal-Mart for Cases Challenging Subject Employment Practices, will be published in the Hofstra Labor & Employment Law Journal in May 2012. Her prior research on compelled whistleblowing has been cited in various books and articles on legal ethics, securities law, and employment law, including the popular Employee Duty of Loyalty treatise by Marlsberger et al.

Ms. Tippett earned her law degree at Harvard Law School in 2006. She spent several years as a research associate for the Harvard Negotiation Project, working with Professor Emeritus Roger Fisher, Co-author of Getting to Yes, and teaching various negotiation-related courses for students and practitioners. She also served as the Outside Training Director for the Harvard Mediation Program and Articles Editor for the Harvard Negotiation Law Review. She received her undergraduate degree magna cum laude from Harvard College. An Empirical Study of Patent Prosecution Success after the Filing of a Notice of Appeal

Andrew W. Torrance Visiting Scientist, MIT Sloan School of Management Professor of Law, University of Kansas School of Law [email protected] | Bio | SSRN

During patent prosecution in the United States Patent and Trademark Office (“USPTO”), filing a notice of appeal to contest the final rejection of patent claims has traditionally been viewed as a drastic strategy of last resort. Some studies have analyzed patent appeals to the Board of Patent Appeals and Interferences (“BPAI”), and have tended to focus on final decisions made by the BPAI. Appeals decided by the BPAI are often unfavorable to patent applicants, leading to abandonment of their patent applications. However, there are a number of discrete stages between the filing of a notice of appeal and a BPAI decision. This study uses a nearly comprehensive dataset on patent appeals spanning the last decade to analyze patent outcomes at each of the following stages: (1) notice of appeal but no applicant brief or request for pre-appeal review; (2) appeal withdrawn from appeal process following request for pre-appeal review; (3) appeal exiting appeal process after applicant's brief but before examiner's reply; (4) appeal exiting appeal process after examiner's reply but before BPAI decision; and (5) patent applications receiving a BPAI decision. We find that patent applications fare surprisingly well in each of the stages preceding a BPAI decision, and we offer not only aggregate analysis across all technical arts, but also analysis for individual art units in the USPTO. Specifically, patent applications that exit the appeals process prior to a BPAI decision are far more likely to be allowed, filed as an request for continued examination, or receive either a non-final or final Office action than they are to be abandoned. This suggests that filing a notice of appeal, far from being a desperate prosecutorial act, may actually be a relatively effective strategy for garnering a positive outcome in patent prosecution prior to the delivery of a BPAI decision.

Patent Examination and Litigation Outcomes

Sean Tu Associate Professor, West Virginia University College of Law [email protected] | Bio

We previously collected and coded for every patent issued in the past decade (from 2001 to 2011, approximately 1.7 million patents). Currently, we are collecting and analyzing a new dataset linking patent litigation outcomes with the our previously generated database on patent examiners. This dataset is comprised of patent litigation outcomes which terminated in 2010. The dataset includes 2,327 litigations and data corresponded to 2,154 patent examiners. For each patent, we identify the primary and/or secondary examiner associated, and collected historical information regarding their entire examination history (including: art unit, examination duration, average number of patents granted per year). These data were used to determine if there were patterns between prior examination experience and patent litigation outcomes. Our preliminary findings are that: (1) litigated patents mainly come from primary examiners (those examiners with the most experience), and (2) Examiners that issue a very high number of patents per year (over 100 patents per year), are disproportionally contributing to the litigated patent pool. These data suggest that not all patents are created equal, and that patent examiners may not be applying the rules of patentability in a fair, even and consistent manner. Make Me Walk, Make Me Talk, Do Whatever You Please: Barbie and Exceptions

Rebecca Tushnet [email protected] http://www.tushnet.com

Barbie® is a symbol of America—down to the ®, representing Mattel’s claim of exclusivity. The Barbie brand is capacious, covering products of every kind, in miniature and in large; you and your Barbie can even wear matching jewelry. The doll represents an aspiration to a kind of ideal and also a never-ending mutability. One basic body has been changed over time and reworked into multiple ethnicities, dressed in a seemingly infinite selection of outfits themselves representing a wide range of hobbies and careers (getting married might be one or the other), though always with feet arched to wear high heels, even for Army Medic Barbie. Barbie is the perfect woman, and she is also grotesque, plasticized hyperreality, presenting a femininity exaggerated to the point of caricature.

Barbie’s marketplace success, and her ability to represent multiple overlapping and occasionally contradictory meanings, also makes her a useful embodiment of some key exceptions to copyright and trademark law. Though Mattel’s lawsuits were not responsible for the initial recognition of those exceptions, they are illuminating for several reasons. Mattel attempted to use both copyright and trademark to control the meaning of Barbie, reflecting a trend towards such overlapping claims: creative material becomes a brand, and brands have so many creative elements that copyright’s low originality standard recognizes copyrightable subject matter therein. The Barbie cases therefore also throw copyright and trademark defenses into contrast. Fair Use As a Partial Solution to the Orphan Works Problem

Jennifer M. Urban Clinical Asst. Prof., & Director, Samuelson Law, Technology & Public Policy Clinic UC-Berkeley School of Law [email protected] | Bio | SSRN

Society is on the cusp of creating a digital library of the world's culture and historical memory. The cost of digitizing, storing, and providing access to everything from books, to historical documents, to the ephemera contained in special collections, has dropped substantially in recent years. A universal library now seems within grasp. Organizations from Google, to the Library of Congress, to the Internet Archive, to numerous smaller organizations, have begun the work of digitizing orphans, but a barrier has arisen.

The barrier is copyright law. Many of the works most valuable for a universal library are "orphan works"--presumptively copyrighted works for which the copyright holder is unknown or cannot be located after a diligent search--rendering them unable to be "cleared" at any cost. While Congress made a considered attempt to pass legislation to deal with the orphan works problem in 2008, it ultimately adopted no solution, leaving the status quo in place. The idea of legislation has since failed to attract a sufficient constituency to move forward.

This Article argues that legislation is not necessary to enable some uses of orphan works. Instead, the fair use doctrine in United States copyright law provides a partial solution. The Article asks two basic questions: first, is fair use a viable basis for libraries to digitize orphans and make them available to patrons? and second, can or should fair use do any additional work where the copyrighted work in question is an orphan? The answer to both is yes. First, nonprofit libraries and archives should be able to rely on fair use in order to digitize orphan works in their collections and make those works available to their patrons. Second, the oft-ignored second factor that courts consider in fair use cases (the "nature" of the work) should have much greater weight in orphan works cases than it is traditionally given. Inquiring into the a work’s “orphan” nature, and into other specific attributes of the work, gives useful guidance as to whether incentives to create would be harmed by digitizing the work and making it accessible. The fourth fair use factor (harm to the copyright holder's market) clearly favors the use of orphan works, as there is no market exploitation of the work, and as one party to the putative transaction is simply missing, representing a complete market failure. Many uses by libraries will fit squarely under the umbrella of uses favored by the first fair use factor (the "purpose of the use"), and digitizing the entire work for preservation and access should be justified under the third fair use factor. While it may seem clear that libraries and archives could strongly consider fair use as an option for orphan works digitization, not everyone agrees. Google and a consortium of universities have already been sued by the Authors Guild, which argues that fair use does not apply outside of libraries' Section 108 rights, and libraries and archives have expressed that orphans create a serious chilling effect on digitization projects. As such, while fair use is unlikely to justify all mass digitization, it represents an important, and for too long unsung, part of the solution to the orphan works problem. How Fair Use Can Help Solve the Orphan Works Problem

Jennifer M. Urban Clinical Asst. Prof. of Law; Director, Samuelson Law, Technology & Public Policy Clinic UC Berkeley School of Law [email protected] | Bio | SSRN

Many works that libraries, archives, and historical societies, among others, would like to digitize and make available online are "orphan works," that is, works for which the copyright holder either is unknown or cannot be located after a diligent search. Encountering orphan works can be stymieing because the lack of an owner means that there is no way to obtain permission to use them. While Congress nearly passed legislation to deal with the orphan works problem in 2008, its ultimate failure to enact this bill has left those who possess orphan works in limbo. Because of the risk of high statutory damages if an owner later shows up, nonprofit libraries and similar institutions have been reluctant to digitize these works and offer them to the public. The orphan status of these works thus creates a barrier to access to important cultural and historical information despite recent improvements in digitization technologies that could bring these works out of obscurity and make them much more widely useful. As such, there is international consensus that the “orphan works problem” must be addressed.

This Article argues that legislation is not necessary to enable some uses of orphan works by nonprofit libraries and archives. Instead, the fair use doctrine in United States copyright law provides a partial solution. The Article addresses three basic questions: first, does fair use provide a viable basis on which libraries might digitize orphans? Second, does fair use provide a viable basis on which to make these orphans available to patrons or the public? Third, more generally, can or should fair use do any additional work in infringement analysis where the copyrighted work in question is an orphan?

The answer to each of these questions is yes. Nonprofit libraries and archives should be able to rely on fair use in order to digitize orphan works in their collections and to make those works available. In addition, the orphan status of works has special relevance to the fair use analysis. First, the oft-ignored second factor that courts consider in fair use cases (the "nature" of the work) should be given much greater weight in orphan works cases than it is traditionally given. Inquiring into a work’s “orphan” nature, and into other specific attributes of the work, gives useful guidance as to whether incentives to create would be harmed by digitizing the work and making it accessible. Second, the fourth fair use factor (harm to the copyright holder's market) clearly favors the use of orphan works, as there is no market exploitation of the work, and as one party to the putative transaction is simply missing, representing a complete market failure. Finally, regardless of a work’s orphan status, many uses by libraries and archives will fit squarely under the umbrella of uses favored by the first fair use factor (the "purpose of the use"), and their digitization of entire works for preservation and access should often be justified under the third fair use factor. As such, fair use represents an important, and for too long unsung, part of the solution to the orphan works problem.

The Supreme Court’s Intellectual Property Caseload: A Historical Study

Ryan Vacca Assistant Professor, University of Akron School of Law [email protected] | Bio | SSRN

Recently, scholars have observed the U.S. Supreme Court’s heightened interest in intellectual property cases over the past two decades. Yet scant attention has been paid to the Court’s historical interest in IP cases and whether this modern peak is as phenomenal as it appears. This work-in-progress fills that void and places the Court’s interest in IP in its historical context.

This work-in-progress aims to complete my existing work to collect and analyze all the IP cases decided by the Court from 1791 through 2012 and quantitatively illustrate how over the last 221 years, the Court’s IP caseload has fluctuated. Not only does this study examine the trends of all IP cases collectively, but it also examines the trends for patent, copyright, and trademark cases.1 These data are illustrated by viewing the IP cases as a percentage of the Court’s total docket, which also serves to control for variations in the total number of cases decided by the Court during each term. The vast majority of this quantitative research is complete and based on my preliminary results, several notable developments appear to be revealed in the Court’s IP caseload.

Based on what these data show, I will overlay these trends against the backdrop of technological, social, economic, and legal developments taking place in our nation’s history and tell the stories of how the Court’s IP caseload may or may not be reflective of these developments.

To date, I have created a database containing every IP case the Court has decided, have read each of them, and coded the cases for the type(s) of IP involved, the term, and the justice who wrote the opinion of the Court. My research this summer will be to code each case to include the technologies or industries involved in each case and to survey the relevant technological, economic, social, political, and legal landscapes during the last 221 years. I expect to have the coding complete by the time of the IP Scholars Conference.

This research will generate a rich historical dataset to help provide the foundation for future evaluation of the Court's IP caseload and its jurisprudence during particular time periods. It will be a valuable resource for social scientists and legal historians to use to develop and test their hypotheses as to what may have contributed to the Court’s interest in IP (or lack thereof as the case may be).

1 Trade secret and misappropriation cases are also considered, but do not play an appreciable role in the total number of IP cases.

Property’s Intellect

Molly S. Van Houweling Professor of Law, University of California, Berkeley [email protected] | Bio

IP scholars and tangible property scholars have in recent years engaged in productive dialogue about the theoretical and doctrinal overlaps and divergences between their fields. This paper will synthesize and build upon this prior work, highlighting—in particular—important themes that emerge from the tangible property canon that can inform our thinking about tricky IP problems. These themes include: the importance and limits of the “first in time” principle, the relationship between property and personhood, tragedies and comedies of the commons, overlapping rights and the anti-commons, dead hand control and the problem of the future, and the question of property rules versus liability rules. If we are attentive to both the similarities and differences between tangible property and IP regimes, exploring these themes can generate new and valuable insights for both fields.

Patent Reforms at Both Sides of the Atlantic: A Critical Analysis from a “Good Governance” Perspective

Esther van Zimmeren Post-doctoral Research Fellow at the University of Leuven, Centre for IP Rights Assistant Professor at the University of Liège, Institute for European Legal Studies [email protected] | Bio

At present, I am carrying out a study of the European patent system from an administrative law/governance and comparative law perspective. Even though in the US, several patent scholars have been doing research on applying administrative law principles to the US patent system (notably Arti K. Rai, John F. Duffy, Craig Allen Nard and Kali N. Murray), in Europe the lack of attention to administrative law principles has remained a striking feature of the patent system. In contrast to commentators and practitioners in other technically complex areas, such as environmental law, the European patent law community has tended to pay little attention to administrative law doctrine and principles. One could claim that the European patent system largely is an uncultivated area in terms of governance. Moreover, the available literature on patent governance consists primarily of contributions by social and political scientists (e.g. Susanna Borrás, 2006; Ingrid Schneider, 2009) and focuses mainly on the European patent system.

In my research I employ the following definition of “governance”: the proper functioning of institutions and their acceptance by the public (legitimacy), ensured by the rules of the political system for adopting decisions and solving conflicts between actors (legality), for safeguarding the efficacy of the government and the achievement of consensus by democratic means (participation). The European Commission has developed six main principles underpinning so-called “good governance”: legitimacy, transparency, participation, accountability, effectiveness and coherence (European Commission, 2001). These principles are helpful in the light of a comparative legal analysis that goes beyond a simple testing of national administrative law principles. The European and US patent system and the administrative law concepts and principles vary significantly. Good governance principles are, however, shared more widely and may provide a useful guidance in (a) gaining a better understanding of the European patent system and (b) comparing the findings on the European system with the US in order to identify “best practices” to improve the European patent system. In the paper, I start from the premise that it is vital (1) that patent systems are subject to good governance principles; (2) that the interaction between heterogeneous actors in the patent system and beyond is clearly articulated, and (3) that safeguards are put in place to ensure that good governance principles are monitored and enforced throughout the patent governance system and intertwining governance systems.

The current patent reforms at both sides of the Atlantic seem to be bridging part of the transatlantic divide in patent law. Once the European proposals for a unitary patent and a unified patent court are adopted by the EU institutions, it will bring about a patent with a unitary effect in all the participating EU Member States and it will significantly centralize patent dispute resolution. With the America Invents Act, the US is increasing the rule-making authority of the USPTO and is moving towards a first-to-file and a post- grant review system. These reforms constitute major changes with respect to the prior patent governance system in respectively Europe and the US. Yet, one may wonder to what extent these reforms will increase the compliance with good governance principles or whether the existing problems related to for instance transparency and participation by stakeholders in the patent system (e.g. Kali Murray & Esther van Zimmeren, 2011; Susanna Borrás, 2006; Ingrid Schneider, 2009) will only be exacerbated.

In the paper, I identify a number of “best practices” in the US and European patent system and explore to what extent these practices could be extrapolated to other patent jurisdictions in order to increase the compliance with good governance principles. A Taxonomy of "Improvement Doctrines" in Property and IP Deepa Varadarajan Assistant Professor, St. John's Law School [email protected] | Bio

When a person makes significant improvements to another's land, chattels or informational assets, without the owner's permission, difficult equitable and remedial issues can arise. "Improvement doctrines" across the spectrum of real property, personal property and intellectual property law have developed to mediate conflicts between owners and improvers of property. In the real property context, for example, the doctrine of ameliorative waste allocates rights and responsibilities when a current possessor seeks to make improvements to property over a future interest holder's objections. Still other real property doctrines ask who should capture the value of mistaken improvements to land owned by another. The doctrine of accession addresses similar disputes involving one party's mistaken and unauthorized improvement of another's personal property. In the patent context, "blocking patents" and the reverse doctrine of equivalents attempt to balance the interests of original technology owners and subsequent improvers. And to a lesser extent, the doctrine of fair use mediates similar conflicts in the copyright context. In this work-in-progress, I classify and compare the various "improvement doctrines" in property and IP to glean why improvers are treated differently in these contexts. To what extent is the improver's mental state or intent relevant to the inquiry, and to what extent can such differences be explained by the values these various "improvement doctrines" seek to promote? Despite the criticisms of analogizing tangible property to IP, property law's "improvement doctrines" may nonetheless help us understand and improve "improvement doctrines" in IP. A better understanding of property law's robust and varied improvement doctrines certainly challenges the (increasingly contested) presumption that property law unwaveringly favors strict exclusive rights for owners, and may have normative implications for IP law.

BASING PATENT DAMAGES ON HARM TO THE WORLD RATHER THAN ON HARM TO THE PATENTEE

Samson Vermont Research Scholar, U. Miami School of Law [email protected] | Bio

Patent infringement has long been viewed as a tort that causes tort-like harm. This view, as Ted Sichelman argues, is misguided. In tort, the measure of P’s damages is the difference between P’s actual state and what P’s state would have been but for D’s tort (“P’s but-for loss”). P’s but-for loss is a decent measure of damages for most torts because it closely approximates the social loss from most torts. In contrast, P’s but-for loss from patent infringement often diverges widely from the social loss from patent infringement, especially today. Indeed, in some technologies, infringement routinely results in social gain. Yet courts treat infringement not only as a tort but as a strict liability tort. Most torts require fault. Even a trespass of real property may be excused if the trespass was reasonable under the circumstances. The law of trespass is less strict than patent law, despite the fact that real property boundaries are far more ascertainable than patent boundaries. To make patent law less strict, and thereby punish efficient infringement less often, courts should aim to base patent damages on the social loss, if any, from infringement. That is, instead of putting the patentee in as good a position as it would have been but for infringement, courts should put the world in as good a position as it would have been but for infringement. To do this, courts must subtract the costs of not infringing P’s patent from the costs of infringing it. That is, courts must net out the search and delay costs that would have been incurred had D not infringed P’s patent. If courts did this, many cases that currently result in substantial awards – especially those involving software patents and patents issued from continuation applications – would result in no awards. APA, AIA, and the PTO: The Changing Guard of Patent Law

Melissa F. Wasserman Assistant Professor & Richard W. and Marie L. Corman Scholar, University of Illinois College of Law [email protected] | Bio | SSRN

This Article argues that the American Invents Acts (AIA) significantly alters the legal landscape by which substantive patent law is developed. More specifically, it argues that AIA results in the PTO having the ability, for the first time, to announce legal determinations that carry the force of law. The source of this new power is not a grant of substantive rulemaking or the overruling the Federal Circuit’s decision that the PTO’s legal interpretations announced in the adjudication of patent denials receives no deference. Instead, this Article argues this novel power stems from the enactment of new administrative proceedings under the AIA.

After concluding that PTO legal determinations in these new administrative proceedings are likely entitled to Chevron deference, this Article begins to examine the ramifications of this observation. Finally, this Article explores the normative aspects of applying Chevron deference to PTO’s legal decisions made during these new proceedings. In particular, this Article argues that the PTO’s expansive take of substantive patent law issues are much more likely to receive Chevron deference than the agency’s restrictive interpretations of substantive patent law. This asymmetry is likely to result in the systematic expansive of substantive patent law. The Article also explores the retroactive nature that PTO decisions will carry and why this type of retroactivity may be particularly problematic to the patent system.

Felix Wu Assistant Professor, Cardozo School of Law [email protected]

The protections of the First Amendment have traditionally been thought to attach to a category of “things” designated as “speech.” Thus, much emphasis has been placed on determining whether code is speech, whether data is speech, or whether copyrighted works are speech. But the First Amendment is not about protecting things. Rather, it is the activity of communication, or expression, that we mean to protect. The difficulty is that the activity is inextricably tangled with the vehicle for the activity, and we cannot regulate one without at least somewhat regulating the other. Still, conceptually separating the communicative activity from the underlying vehicle helps to shed light on some difficult questions. In the context of copyrighted works in particular, rather than worrying about whether such works “are speech,” we should instead focus on the expressive interests at stake in particular uses of those works. The result may be, for example, that we ought to be much more skeptical about the derivative works right than the public distribution right. Or that we ought to have strong intermediary immunity with respect to mash-ups, samples, satires, and similar creative uses, but not with respect to mass distribution of works substantially identical to the original. Or that the public domain, while playing a key role in copyright policy generally, has no special status with respect to the First Amendment. By being more careful about identifying expressive interests, we can more easily see where there are fundamental conflicts with other interests, and where there are not.

Consumers, Producers, and the Scope of Trademark Infringement

Alfred C. Yen Professor of Law, Boston College Law School [email protected] | Bio

In this Article, I use the relative ability of consumers and producers to reduce or eliminate consumer confusion to clarify the law of trademark infringement. Courts presently determine whether trademark infringement exists by applying a multi-factor test examining whether a defendant’s use of a mark creates a likelihood of confusion among consumers. Many have criticized the test as difficult to understand and inconsistently applied. It has therefore become difficult to identify a coherent account of how courts decide trademark infringement cases. Such uncertainty creates aggressive behavior by trademark owners who can easily come up with a plausible claim that a defendant’s use of a similar mark is infringing, and it encourages defendants to become increasingly risk averse, abandoning existing marks for new ones simply to avoid the costs of litigation or the unpredictable chance that a court will impose liability.

It is possible that extremely broad trademark rights serve the public interest by eliminating the possibility of consumer confusion. However, closer reflection shows that trademark liability needs to be limited in order to avoid the socially wasteful uses of trademark. Common sense and psychology tell us that consumers will sometimes pay enough attention to distinguish otherwise similar marks. Moreover, even in situations where consumers are unlikely to eliminate confusion on their own, it may still be socially wasteful to impose trademark liability because the producer cost of eliminating confusion would be extremely high.

The foregoing suggests that a cogent account of trademark infringement should pay attention to the ability of consumers and producers to eliminate consumer confusion. Trademark should be vigorously applied when consumers find it difficult to eliminate confusion and when producers can do so relatively cheaply. Conversely, trademark liability should not exist when consumers are likely to eliminate confusion on their own and producers find it relatively expensive to do so.

Unfortunately, existing law does a poor job of this at best. The existing multi-factor test asks courts to determine whether consumers are likely to be confused, but it does not explicitly direct courts to consider how likely consumers are to avoid confusion on their own and, if not, how easy it would be for producers to fix the problem. This Article will show how paying explicit attention to the issues identified here can improve the law and create a more coherent understanding of the multi-factor test for trademark infringement. Expanding the Customer Suit Exception in Patent Law

James Yoon Partner, Wilson Sonsini Goodrich & Rosati Adjunct Professor, Santa Clara University School of Law

Sweeping changes in patent law over the past decade regarding patent exhaustion and declaratory judgment have greatly altered the licensing and litigation practices of non- practicing entity (“NPE”) patent owners. The Supreme Court decision in Quanta Computer, Inc. v. LG Electronics, Inc. that the “authorized sale” of an article that “substantially embodies” a patent exhausts a patent owner’s rights (and prevents the owner from invoking patent law to control post-sale use of the “sold” article) greatly reduced the incentive of NPE’s to license component manufactures. Certain NPEs fear that such licenses would greatly reduce the economic value of their patents since the systems that incorporate the licensed components often are sold for many multiples the price of the component and maintain substantially higher profit margins. The reluctance to license (or even negotiate licenses with) component manufacturers was enhanced by changes in the law regarding declaratory judgment. Today, any NPE who provides a component manufacturer with notice of a patent and any statement that the NPE believes that the component manufacturers product is covered by one of the NPE patents could face a declaratory judgment action or patent interference proceeding. Such a declaratory judgment action or interference could cripple their litigation strategy by staying any litigation directed against a customer of the component manufacturer. To prevent such a result, NPEs frequently file without notice patent claims against downstream customers of patent manufacturers. This NPE’s hope that this “shoot first strategy” will enable them to maximize the economic value of their patents and the negotiation leverage against the customer defendants.

It has been well-documented that there is a significant risk that traditional “reasonable royalty” damages will overstate the value of a patent. Recent Federal Circuit and other court decisions have attempted to limit the application of the “entire market” rule to the calculation of damages and apportion the royalty base of the accused products between the value of the patented technology and the value of the non-patented features. In many instances, the “apportionment” have, in effect, limited the value (royalty base) of a patent to a specific component within a larger system. In other words, the apportionment damages analysis determines that the proper royalty basis is the component that may “substantially embody” the claimed invention. The component that the NPE refuses to license on the ground of the Quanta decision.

The apportionment decisions do not prevent the high costs and inefficiencies associated with litigating patent cases on a piece meal basis with selected downstream customers when compared to litigating the case in a single case with the component manufacturer who provides the component at the heart of the infringement allegations. These inefficiencies and costs associated with customer suits places tremendous costs and burdens on the component manufacturers who often contractually obligated to defend and indemnify their customers. Because they are not parties to the suit, these component manufacturers face the prospect of continuous serial litigation (and licensing demands) against their customers since most cases settle before trial and do not result in final, non-appealable judgments. Each case (and customer negotiation) results in additional, unnecessary costs to the component manufacturers. There is no vehicle to permanently resolve the matter because the NPE refuses to enter into a license with the component manufacture based on the component manufacturer’s economics on the basis of (1) the Quanta decision and (2) the belief that they can obtain a “premium” from each individual customer by leveraging the potential litigation costs associated with defending against the NPE patent.

The article recommends an expansion of the “customer suit” exception to the venue rules. The “customer suit” exception is a doctrine where a subsequent suit brought by a manufacturer takes precedent over the earlier filed suit brought against a customer. The doctrine recognizes that often the manufacturer is the “true” defendant in the customer lawsuit. The courts applying the doctrine look to judicial economy to determine whether the earlier filed “customer suit” should be stayed pending resolution of the manufacturer suit. This doctrine should be expanded in multiple ways. First, the doctrine should be expanded to allow Court’s to expressly determine whether the manufacturer suit is the better action for determining damages associated with the NPE’s patent claims. Second, the doctrine should be expanded to provide more procedurally flexibility for component manufacturers. Such manufacturers should be allowed to bring such actions within a reasonable time period after the NPE makes its infringement contentions. Namely, when the NPE has crystallized its infringement allegations and has identified (1) its asserted claims and (2) for the asserted claims, the component as the primary basis for infringement, the manufacturer should have the right to bring a declaratory judgment action to globally price and resolve the patent claims brought by the NPE. Copyright as an Engine of Censorship

Peter K. Yu Kern Family Chair in Intellectual Property Law, Drake University Law School [email protected] | http://www.peteryu.com/

Commentators have widely discussed the tension between copyright and free speech. More recently, Frank La Rue, the Special Rapporteur on the Promotion and Protection of the Right to Freedom of Opinion and Expression, expressed concern about the use of the graduated response system to address copyright infringement. Consumer advocates and civil liberties groups have also highlighted the free speech problems in legislation (SOPA and PIPA) and international treaties (ACTA and TPP).

One issue commentators have yet to fully explore concerns the tension and conflict between copyright and free speech in countries that heavily restrict information flows or that substantially control cultural industries. Because such tension and conflict varies according to historical, political, social, cultural, and religious contexts, the same intellectual property standards can have different ramifications for the protection of internet freedom in different countries.

Focusing on countries with heavy information control, this article examines the need for greater copyright freedom to compensate for the lack of freedom of expression. It further articulates how, in some countries, “creative reuse” could be transformed into “liberative reuse.” The article questions Justice Ginsburg’s argument in Eldred v. Ashcroft that “the First Amendment . . . bears less heavily when speakers assert the right to make other people’s speeches.” It explains why the reproduction of speech created by others is sometimes needed to promote free speech.

The article also highlights the free speech challenges in an environment where enforcement measures are increasingly strengthened and where criminal liability is introduced to address massive copyright infringement on the internet. It concludes with some suggestions on how to harness the copyright system to promote free speech values and internet freedom.