Tag Archives: Rent Seeking

Changing the IP Mentality

Originally posted 2012-06-22 14:07:19. Republished by Blog Post Promoter

Mark V.B. Partridge, a partner at the firm that bears the name of my old trademark professor and author of the Guiding Rights Blog [link is dead – RDC], has written a very important piece for the [non]billable hour blog. Here’s my favorite suggestion:

2. Eliminate rights in gross mentality

My second change, admittedly related to the first, would be to eliminate the “rights in gross” mentality. By this, I mean the notion that a trademark creates an absolute and exclusive right. One sees this tendency on both sides of the rights issue. A trademark owner may have the view that no one else may use its mark for any purpose. The junior user may believe there is no infringement if the mark it adopts is not identical to another’s trademark.

I don’t think there’s a single bigger problem in trademarks than this mentality. It is not necessarily an unreasonable view for trademark owners to have; they pour millions or even more into the “brand equity” represented by a trademark. But that should not, and does not, change what a trademark is supposed to be. Unfortunately, the flowering of federal trademark dilution law has cut in exactly the opposite direction of this would-be change — and I don’t see it getting better.

Taking the IP Train

Originally posted 2010-09-06 16:08:53. Republished by Blog Post Promoter

The New York Times reported (yes, reg. req.) last week that New York’s Metropolitan Transit Authority is scrambling to enforce trademark rights in its wide array of iconography, including the famous alphanumeric train symbols known to all New Yorkers.

MTA Subway Train Symbols

Evidently powered by the MTA’s burgeoning licensing program, it’s not a bad idea. No question but that these and the many other powerful symbols used by the transit system are excellent communicators of source, quality and all those other trademarky things. The New York transit system, especially the subway, is an entire subculture unto itself. In other words, don’t be surprised if there’s some pushback on this new, and somewhat belated, attempt to kind of privatize, or revenue-ize, a world that generations of people think of as “everybody’s” property.

Of course, the libertarians remind us constantly, and accurately, that when something is everyone’s property, it is ultimately treated like no one’s property at all — which “everyone” ends up paying for. Still and all, there is an interesting trademark policy issue in here somewhere. It’s one thing to say that services aren’t free and that even when, as in the case of the MTA, they succesfully address significant externalities, their costs should not be unduly disconnected from users. But it’s another thing to say that, however revenue-starved, a public institution (in the broad sense of the word) such as the MTA should restrict the public, much less the bloggy, enjoyment of a public iconography such as the train number symbols and the image of the classic subway token.

In other words, if you get a C&D letter from the MTA, give me call, won’t you?

Best of 2011: What “beating Righthaven” means

First posted November 3, 2011.

Supreme Court and U.S. District CourtInstapundit links to Donald Douglas’s blog post, Beating Righthaven.  Excerpt:

Righthaven files “no warning” lawsuits. That is, it gives no advance notification to defendants, which violates the norm of providing “take down notices” to those suspected of copyright violations. By doing this, Righthaven — which made a speciality out of suing small-time bloggers and “mom-and-pop” businesses — was able to scare the bejesus out of its targets, who then would settle out of court generally in the three to five thousand dollar range. Defendants were threatened with the possibility of a $150,000 judgment and the forfeiture of their website’s domain name (URL address). . . .

Righthaven’s model is entirely predatory, and the company soon earned everlasting enmity by filing lawsuits against folks who were unemployed, on public assistance or disabled. Righthaven, for example, sued cat-blogger Allegra Wong of Boston, who was unemployed and receiving “financial support from a companion.” Righthaven also sued Brian Hill of North Carolina. Hill is autistic and chronically ill and is supported by Social Security disability benefits. My attorney David Kerr successfully defended Hill, whose story was featured in the New York Times, “Enforcing Copyrights Online, for a Profit.”

There’s a lot that’s “frightening as hell” going on out there with IP “enforcement” — a word I didn’t put quotes around when I used to do it for Brands You Must Know, because the kind I used to do didn’t need them.  It was legitimate, based on easy to comprehend ownership rights, consumer protection concerns and, yes, a concept of fair warning even to a lot of defendants who didn’t deserve it all.

Now IP is a racket.  Most of the readers of this blog practice IP law, and know exactly what I mean — because of what they do and, well, because they read this blog, and have surely detected a turn in my attitude toward the topic from years past.

Practical lawyering in an area of law I actually like often disgusts me now.

Look, I “majored” (not really how they designate this where I went to school, but stick with me) in economics — focusing my learning not in money or finance, which I know little about, but the prediction of human behavior when incentives are provided, withdrawn or distorted.  And I “minored” in political science.

So I was not born yesterday.  I have always understood that much of what is happening in IP law is entirely predictable once we understand that the value of the estates in intellectual property has skyrocketed, for any number of reasons, unpredictably.  But from that premise, it is not news that the incentive to capture rent — get as much of the action as possible — will rise concomitantly, leading to a rational increase of investment by stakeholders in making changes in the regime governing the allocation of such rights.   Read More…

Great moments in trademark trolling


With Nuvio suing Garmin’s Nuviphone on fairly spurious grounds, let’s take a look at famous trademark wars of times past.

A little more on the bit-sized scale than a survey of warfare, but decent enough filler.

Unofficial, and in court

Mike Mintz reports about a lawsuit brought in California by Brian Kopp, the publisher of an unofficial guidebook for a computer game called World of Warcraft that kept getting booted off eBay by the game’s maker, Blizzard. He’s looking for a declaratory judgment that he has the right to sell the book, and other relief.

It’s just another version of what’s going on in the federal courts — and outside of them, using them as a threat — all over the country:  IP property owners believe the likes of this plaintiff are “free riding” on value they have created.  Little guys who make the IP owners’ properties even more valuable claim they want the right simply to describe what they are selling accurately.  Sometimes the lines between those positions are unclear:  How much does an unofficial guide or an unauthorized distributor impinge on the legitimate zone of IP protection of a brand or copyright owner?

IP owners, especially of digital media, are ripped off night and day, frequently with no hope of every recovering damages against pirates. But as often or not, or maybe more, the IP owner is using his federally-protected rights as a way to prevent competition (e.g., it wants to publish or license the only guidebook) or protect a favored distribution scheme (e.g., and thereby indirectly control prices), and all too often (though there are exceptions, which Mike addresses in his posting) the courts are only too eager to help them.  This story is still being written, and it may ultimately be written by little guys like Brian Kopp who bring it to the 500-pound gorillas and insist on their rights.  Sooner or later, the right judge will give it to them.


Bill Patry


Copyright doyen Bill Patry explains why he shut down his brilliant copyright law blog. Some of it had to do with his inability to prevent people from ascribing his personal views to his employer, Google. Some of it had to do with a sort of spiritual exhaustion (despite being a pretty spiritual guy). But naturally, this is the reason that got my attention:

This leads me to my final reason for closing the blog which is independent of the first reason: my fear that the blog was becoming too negative in tone. I regard myself as a centrist. I believe very much that in proper doses copyright is essential for certain classes of works, especially commercial movies, commercial sound recordings, and commercial books, the core copyright industries. I accept that the level of proper doses will vary from person to person and that my recommended dose may be lower (or higher) than others. But in my view, and that of my cherished brother Sir Hugh Laddie, we are well past the healthy dose stage and into the serious illness stage. Much like the U.S. economy, things are getting worse, not better. Copyright law has abandoned its reason for being: to encourage learning and the creation of new works. Instead, its principal functions now are to preserve existing failed business models, to suppress new business models and technologies, and to obtain, if possible, enormous windfall profits from activity that not only causes no harm, but which is beneficial to copyright owners. Like Humpty-Dumpty, the copyright law we used to know can never be put back together again: multilateral and trade agreements have ensured that, and quite deliberately.

It’s depressing, and he’s probably right. Again: He says copyright’s “principal functions now are to preserve existing failed business models, to suppress new business models and technologies, and to obtain, if possible, enormous windfall profits from activity that not only causes no harm, but which is beneficial to copyright owners.”

What ever kind of thing could he be talking about? (Hat tip to Carol Ruth Shepard.)

Cross-posted on Likelihood of Success.

Trademarks, copyright, brand equity, and rent-seeking: Soapbox 2010

From last week’s INTA Trademark Topics email discussion list.  One name has been changed to protect the innocent, and the links, by way of annotation, have been added, as have arbitrary pictures meant to break up the monotony.

—–Original Message—–

from:                               [email protected]
to:                                     INTA List <[email protected]>
date:                                Tue, Jan 12, 2010 at 5:18 PM
subject (INTA List):  movie title or characters or theme as trademark
mailed-by:                    lists.inta.org
On Tue, Jan 12, 2010 at 5:18 PM, A TM Lawyer wrote:

Client wants develop a family of marks that adopt or suggest an old and famous movie or its characters, plot, or theme.  Lets say someone wants to put out wine branded, GONE WITH THE WIND  or maybe FRANKLY, I DON’T GIVE A DAMN,  or branded with the name of one of the characters, or branded with something that suggests a famous scene from the movie.  Thoughts on how to analyze this?  Does it matter that the owner of the movie rights has never conducted a merchandising program, has no trademark registrations for the names, has never sold the subject goods (wine in my example), and maybe never sold anything branded in this manner?/blockquote>

On Wed, Jan 13, 2010 at 1:44 PM, Ron Coleman <[email protected]> wrote:

TM Lawyer, your client sounds very creative.  So you’ll want to nip that right in the bud.

Your advice should not place undue weight on the so-called merits of the inevitable legal challenge to your client’s business.  These are irrelevant unless your client is funded for extensive litigation.  And because many non-specialists are under the impression that if they win a trademark case, they can “get fees,” be sure it understands that fee shifting will never be granted to a defendant no matter what.  If your client can, however, build the cost of litigation into its early-stage budget, you will want to explain the following:
MLK Federal Courthouse, Newark - interior
Your premise, naturally, is that there is some sweet spot where a business such as the one you describe makes the least possible incursions onto any cognizable rights of the original “property,” yet maximizes its benefit from the goodwill associated with it.  Finding that spot will be pretty elusive, however.

As you know, it is “well established” that the there is little or no protection for the titles of literary works.  (UPDATE:  Nota bene via @MegLG!)  But that’s just what a bunch of old cases say.  Today we have “brand equity,” so your client will be wise to do as you suggested and go with with allusive, rather than direct, references to the “property” in question.  There is no sense in making this too easy for the other side!

I agree with you, too, that by traditional standards the would-be challenger would have an uphill battle proving secondary meaning.  But in the post-Warhol world, fame (the sine qua non of trademark dilution) is everything.  After all, your client’s business model is premised on exploiting the fame and “brand” equity accreted around these creative works.  No registered marks are in play, so as you know federal dilution claims should be off the table.

But how vulnerable is your client to claims of state-law trademark dilution and infringement and Lanham Act section 43(a) claims for unfair competition and false designation of origin?  The legal answer to all these is likely to come down to this:  Is this new business “exploitation” of and “piggy-backing” on some untouchable bit of Intellectual Property ripe with Brand Equity?  After all, people may think your client’s stuff is “endorsed” or “authorized” by the original creators, or studio, or the fictional characters, or whatever.

If the judge rolls that way, no survey or other competent evidence is likely to be required to demonstrate a likelihood of confusion (or of dilution).  On the other hand, a judge could decide your client is merely making a sly cultural reference, not infringing anything at all, as in, say, the “Chewy Vuitton” scenario. Read More…