Tag Archives: Trademark Bullying

IP’s Ancien Régime

L'Droit, c'est moi

L’Droit, c’est moi

Instapundit linked to an abstract of a law journal article called “IP in a World Without Scarcity” by Mark Lemley at Stanford.  Fun fact from his Stanford bio page:  “His works have been cited 140 times by courts, including seven United States Supreme Court opinions, and over 9,500 times in books and law review articles.”  Well, Mark, that’s all very nice, but now you’ve made the big time!

Here’s an excerpt of the excerpt:

Things are valuable because they are scarce. The more abundant they become, they cheaper they become. But a series of technological changes is underway that promises to end scarcity as we know it for a wide variety of goods. The Internet is the most obvious example, because the change there is furthest along. The Internet has reduced the cost of production and distribution of informational content effectively to zero. In many cases it has also dramatically reduced the cost of producing that content. And it has changed the way in which information is distributed, separating the creators of content from the distributors. . . .

The role of IP in such a world is both controverted and critically important. IP rights are designed to artificially replicate scarcity where it would not otherwise exist. In its simplest form, IP law takes public goods that would otherwise be available to all and artificially restricts their distribution. It makes ideas scarce, because then we can bring them into the economy and charge for them, and economics knows how to deal with scarce things. So on one view – the classical view of IP law – a world in which all the value resides in information is a world in which we need IP everywhere, controlling rights over everything, or no one will get paid to create. That has been the response of IP law to the Internet so far. . . .

But that response is problematic for a couple of reasons. First, it doesn’t seem to be working. . . . Second, even if we could use IP to rein in all this low-cost production and distribution of stuff, we may not want to. The point of IP has always been, not to raise prices and reduce consumption for its own sake, but to encourage people to create things when they otherwise wouldn’t. More and more evidence casts doubt on the link between IP and creation, however. Empirical evidence suggests that offering money may actually stifle rather than drive creativity among individuals. Economic evidence suggests that quite often it is competition, not the lure of monopoly, that drives corporate innovation. The Internet may have spawned unprecedented piracy, but it has also given rise to the creation of more works of all types than ever before in history, often by multiple orders of magnitude. . . .

Far from necessitating more IP protection, then, the development of cost-reducing technologies may actually weaken the case for IP. If people are intrinsically motivated to create, as they seem to be, the easier it is to create and distribute content, the more content is likely to be available even in the absence of IP. And if the point of IP is to encourage either the creation or the distribution of that content, cost-reducing technologies may actually mean we have less, not more, need for IP.

If you’ve been with me — and certainly if you’ve been with me for long — much of this will sound familiar.  I’m not saying I was the first one to say it, which would be preposterous.  In fact, I used to believe very strongly in the moral rectitude of IP “enforcement,” or, rather, anything someone who owned IP asserted was enforcement of that IP.

I have since come to understand how many false premises that formulation contains.

Read More…

Don’t say it! SUPER BOWL®, that is.

I don’t watch a lot of TV — don’t even have one, actually.  And I only raise the topic because that is my excuse for missing this epochal commercial riffing on my favorite topic — the Big Game that Shall Not Be Mentioned.  Not mentioned, that is, because of, you know.  Bullies.  Trademark bullies.

Super Bowl® bullies.

Anyway, good thing Chuck “no relation, not a typo” Colman is out there keeping tabs on stuff, as in this incredibly trademark-law laden post.  Makes my brain hurt, even, but that’s because when I came into the game, of course, we’d be sent right back in for the next series after a deep snort of smelling salts.  Chuck, he’s a young gun.

And this TV, now, that is easy watchin’!  Edjamacational too.  So as a matter of record, the Samsung spot has to be embedded here, too:

Yes.  Yes yes yes yes yes.

Hey — here’s a thought:  Isn’t it kind of funny to have a brand that you don’t want people to mention?

One more reason some of us just don’t “get” big-time Brand Equity, I guess.

Shh.  Don’t mention that brand!

Best of 2012: Not my money

Blind justice and plaza, Federal courthouse, Newark

Originally posted February 21, 2012.

Last June, blogging about my presentation to the Copyright Society on the Righthaven litigation, I wrote the following:

This brings us to the issue of mass enforcement a la RIAA and MPAA

  • Mass enforcement sweeps
    • Complete de-linking from any concept of blameworthiness, much less intent
  • Disproportionate penalties and fees
  • Results of mass enforcement:
    • Consensus is that it is ineffectual
      • Continual calls for enhancement of procedural and penal “tools”
      • Effects some unknown quantum of in terrorem deterrent
      • Crystallizes an anti-copyright, anti-establishment sensibility among militant downloaders
      • By targeting non-militants who act out of either ignorance or as casual scofflaws, makes anti-copyright, anti-enforcement
      • RIAA supposedly paid its lawyers more than $16,000,000 in 2008 to recover only $391,000*
        • Reminder about motivation for our criticisms here icon wink Massive Attack:  Analyzing mass copyright infringement campaigns

Now, note that asterisk at the hyperlinked bullet point.  The footnote in my blog post said:

* At the conference, a person in the position to know stated in the question-and-answer session that this figure was utterly innaccurate.  I am looking forward to receiving more accurate information.

Actually, it was two persons, but I never did get any information.  Still, even as I wrote this I remember acknowledging that the argument itself was flawed, regardless of the empirical truth of the factual claim at its base.  And just because I never got the information, which I was thinking would be an appropriate launching point for me to acknowledge my logical flaw, doesn’t mean I shouldn’t do so anyway.

The flaws are pretty obvious.  The obvious one is that you can get a lot of injunctions for $16 million.  And as we know, it is an axiom of chancery practice that the remedies of equity are typically, and usually when referring to injunctions, utilized in situations where those seeking them “have no remedy at law” — i.e., no money could, in theory, substitute for an order forbidding the complained-of behavior.  Lots of parties spend lots of money suing defendants, and in meritorious causes, where there is no prospect of a concomitant recovery.

The less obvious flaw in my argument flows from the obvious one:  Whether we put a $100 million value on the non-monetary relief obtained by these lawsuits or a $100 value, it’s not our money.  Companies routinely decide on litigation as part of a legal and business strategy which, even in a more general sense than set out above, is not evaluated solely from the point of view or even at all from the point of view of whether it will bring in dollars directly.

Protecting a right, or a perceived right, typically comes at a cost.  If that right enables massive profits, the incurring of massive costs to protect it — whether by recovering damages, achieving cessation of activities that threaten those rights or merely as an in terrorem policy — is entirely rational.

Indeed, I have argued in connection with trademark bullying and in connection with copyright overreaching that the problem is not with litigants or even, unless they act unethically in the performance of their duties, with the lawyers who represent them in pursuing these rational policies:  It is with the judges who fail to ask “what is really going on here?” and a lapdog Congress that, notwithstanding the recent hesitation concerning SOPA, doesn’t even seem to care.

So it may make perfect sense for the RIAA to spend whatever it spends to get whatever its management and members deem worth getting (and at the price they’re getting it).  Who am I to say?  Strike that argument from the bullet points.

Not my money

Blind justice and plaza, Federal courthouse, NewarkLast June, blogging about my presentation to the Copyright Society on the Righthaven litigation, I wrote the following:

This brings us to the issue of mass enforcement a la RIAA and MPAA

  • Mass enforcement sweeps
    • Complete de-linking from any concept of blameworthiness, much less intent
  • Disproportionate penalties and fees
  • Results of mass enforcement:
    • Consensus is that it is ineffectual
      • Continual calls for enhancement of procedural and penal “tools”
      • Effects some unknown quantum of in terrorem deterrent
      • Crystallizes an anti-copyright, anti-establishment sensibility among militant downloaders
      • By targeting non-militants who act out of either ignorance or as casual scofflaws, makes anti-copyright, anti-enforcement
      • RIAA supposedly paid its lawyers more than $16,000,000 in 2008 to recover only $391,000*
        • Reminder about motivation for our criticisms here icon wink Massive Attack:  Analyzing mass copyright infringement campaigns

Now, note that asterisk at the hyperlinked bullet point.  The footnote in my blog post said:

* At the conference, a person in the position to know stated in the question-and-answer session that this figure was utterly innaccurate.  I am looking forward to receiving more accurate information.

Actually, it was two persons, but I never did get any information.  Still, even as I wrote this I remember acknowledging that the argument itself was flawed, regardless of the empirical truth of the factual claim at its base.  And just because I never got the information, which I was thinking would be an appropriate launching point for me to acknowledge my logical flaw, doesn’t mean I shouldn’t do so anyway.

The flaws are pretty obvious.  The obvious one is that you can get a lot of injunctions for $16 million.  And as we know, it is an axiom of chancery practice that the remedies of equity are typically, and usually when referring to injunctions, utilized in situations where those seeking them “have no remedy at law” — i.e., no money could, in theory, substitute for an order forbidding the complained-of behavior.  Lots of parties spend lots of money suing defendants, and in meritorious causes, where there is no prospect of a concomitant recovery.

The less obvious flaw in my argument flows from the obvious one:  Whether we put a $100 million value on the non-monetary relief obtained by these lawsuits or a $100 value, it’s not our money.  Companies routinely decide on litigation as part of a legal and business strategy which, even in a more general sense than set out above, is not evaluated solely from the point of view or even at all from the point of view of whether it will bring in dollars directly.

Protecting a right, or a perceived right, typically comes at a cost.  If that right enables massive profits, the incurring of massive costs to protect it — whether by recovering damages, achieving cessation of activities that threaten those rights or merely as an in terrorem policy — are entirely rational.  I have argued in connection with trademark bullying and in connection with copyright overreaching that the problem is not with litigants or even, unless they act unethically in the performance of their duties, with the lawyers who represent them in pursuing these rational policies:  It is with the judges who fail to ask “what is really going on here?” and a lapdog Congress that, notwithstanding the recent hesitation concerning SOPA, doesn’t even seem to care.

So it may make perfect sense for the RIAA to spend whatever it spends to get whatever its management and members deem worth getting (and at the price they’re getting it).  Who am I to say?  Strike that argument from the bullet points.

Up in smoke

Ever hear about people who buy ultra-expensive fine jewelry and then, concerned with security, keep it in a vault and wear a copy of the fancy stuff?  It’s a funny thing, and not usually an intellectual property issue, but it’s not as if there’s no logic to it at all.  The thinking, I have always guessed (for I wear all my ultra-expensive things for real), is that if you own it, you really have — dare I say? — the “equity” that makes wearing the phony version somehow okay.

Fake designer suitcases, Rockland County, New YorkOkay. Well, here’s an interesting twist on the concept that takes it a step further:  What if you know, for sure, that the stuff is not merely at risk of being lost, but is for certain to be lost, and forever, at least in this world.  On purpose.  Susan Scafidi (bless her, actively blogging again!) explains:

In traditional Chinese funeral rites, the dearly departed aren’t expected to pack lightly for their trip to the next world. Instead, family and friends send them on with everything they’ll need, from traditional money, food, and houses to modern cars and luxury handbags.  The catch?  These items aren’t real, they’re paper, and they’re burned as part of the ceremony.

The New York Times reports, however, that the owner of a shop on Chinatown’s “funeral row” was arrested for selling paper Burberry, Louis Vuitton, and Gucci replicas.  While these companies are understandably protective of their often-imitated intellectual property, a licensing agreement might be more beneficial than an enforcement action for all involved.  If marketers for major brands are excited about the growing Chinese market now, just think of the potential for keeping good customers even after they’ve passed on.

Sort of a Lower East Side luxury-brands Valhalla, I guess.

It’s kind of hard to imagine these companies going in for a license that’s going to result in a mass, public destruction of their precious brand-equity-units, isn’t it?  Still it’s a long way from there to justify having people arrested for this.  (Is the state officially an arm of Big IP now?  This takes “trademark bullying” to a new level — not that there’s anything wrong with that!)

Look, you can see why selling the paper items, in and of itself, is going to be barred; that merchandise is certainly dilutive of the trademark value of the stuff, if not an outright infringement — and it probably is an outright infringement.  But let’s say, as Susan seems to have in mind, that you could control for the possibility of the paper items being used only for this purpose, i.e., funeral-pyre-kindling.

If you could “assume a can opener” (as we econ weenies say) and assure that the paper stuff is only going to be sold and used for this purpose … or, more boldly, if you say you’re prepared to argue that these paper replicas are so unlikely to be confused that they are not usable for anything remotely like the real things are — then this would seem to be fair use, wouldn’t it?:

Fair use or nominative use can only be used [sic] when the use of the trademark does not imply affiliation or sponsorship with the owner’s product or services, and will not confuse the reader into thinking the owner of the mark has something to do with the use.

Moreover:

If someone sues you for trademark dilution, you can argue that your use of the famous trademark was “noncommercial.” Congress created this defense, found at 15 U.S.C. § 1125(c)(3)(C), out of concern that dilution claims would impinge on the First Amendment rights of critics and commentators.

Is this fair use?  Seems like a fairly usable argument to me.  It’s commentary; symbolic; not necessarily commercial in and of itself.

But don’t let’s get all inflamed up over this.

Upper crust – the POCKET SANDWICHES (and maybe croissants) saga (Part 2 of 2)

Last week I told the story – as told through this TTAB opinion — of Carl Vennitti’s seven-year tug of war with Nestlé (properly “Nestlé’s,” I guess — but that’s a lot of punctuation to ask people to put in your name, so sorry guys), maker of Hot Pockets food-type product and owner of the HOT POCKETS trademark.  The battle was over Carl’s attempt to use and register the trademark SANDWICH POCKETS.  I promised that part 2 would consist of Carl telling his own story, because I believe, as a blogger, in the Freedom Principle.

Trademark lawyerWhat is the Freedom Principle?

I, as a blogger, have an obligation to use material submitted to me for free if there’s any rationale way it fits with the editorial and I can thereby get a post out of it.

There is no greater freedom than this.

There’s an extra surprise, because this guest submission comes with its own introduction by another trademark blogger, Benjamin Ashurov, who writes a blog called Trademark Bully.  I have added some explanatory links to his introduction to the SANDWICH POCKETS saga, regarding which, you may have noticed if you read this and the prior post carefully, I have actually offered no opinion.  I also take no responsibility for any factual claim in this post or this introduction and in fact welcome any opportunity to correct or clarify the record if appropriate.  I defer, instead, to the Freedom Principle along with a good-faith belief that the narratives published here are materially correct.  I have copy-edited the introduction and Carl’s magnum opus, but very lightly; readers familiar with this blog will see that both guest contributors here are speaking in their own voices.

Cue music, please — first, Benjamin:

After seven years of agonizing litigation, this forum shall allow us to present the over-reaching conducted by one of the world’s largest food companies, foreign owned, and the havoc that they can wreak on a family owned American business, what the results are, and how it affects individual family members who toil at manual labor.

His name is Carl.  He owns and operates a food manufacturing company in Warren, Ohio. He makes a great “pocket sandwich,” the term mandated by the USDA Food Safety and Inspection Service, that has found its way into schools throughout the midwest.

Not everyone thinks that he makes an outstanding product. According to a claim by Nestlé Prepared Foods, Hand Held Products’ division in Colorado, he made an inferior product! At the onset of the attack he was quite surprised at that published statement, because in fact he used to use a lot of Nestlé products in his (he doesn’t use any more). It’s a ridiculous scenario, so you will have to use your own best judgment about the quality issue.

The whole purpose of the “quality” claim, of course, was to suggest that Carl’s use of a trademark claimed by Nestlé was harming its reputation.  Yet just recently one of Nestlé’s Hot Pockets employees was arrested — for war crimes in Bosnia. Inferior products? Higher standards?

Most importantly for purposes of this forum, Nestlé’s  also claims to have exclusive right to the word POCKET in a trademark. Left un-addressed, the consuming public may have to quit calling those extra pieces of fabric on clothes “pockets,” or Nestlé’s may accuse them of infringement, too!

Regardless of these claims, Carl, his family and his company are still supposed to call their food products “pocket sandwiches” by the USDA FSIS definition, and by the former definition in the USPTO’s “Trademark ID Manual.” Today he can.

Here, now, Carl’s story in his own words.  You may want to stick something in the microwave — it’s a long one!

I owe this essay to everyone who believed in creating a dream, and helped build his or her own company into the company we almost were. The following is truthful and factual, which makes it hard to dispute unless, alas, you possess, and are willing to spend, untold amounts of good money to destroy dreams and hard labor, credit, business, integrity and family, such as Nestlé’s did to me and my family.

Prior to July of 2003, V&V Enterprises, Inc., did business as Mauro Brand Products and been marketing and selling “pocket sandwiches” since coming under inspection by the USDA in 1991. Before coming under Federal Inspection with the USDA, we had marketed and sold our products as “pizza turnovers” since 1981. It was quite a traumatic change at that point, because the USDA did not have a category in which to classify our product. Their category was “Multi-Component Products”, and “Pocket Sandwiches” came under that category. We adjusted our customers to the name changes with quite a bit of explanation, but because we made such a well-accepted product, our customer base soon made the adjustment acceptable. We had slowly evolved into a food company which had enjoyed distribution of its’ Pocket Sandwiches in school food service from New York City to Los Angeles. Our years of financial struggle were over. Our commitment to children and to the disabled Americans, which we employed, and still do, was reaching the highest levels of fruition. Our commitment to those less fortunate was driving our goals. St. Jude Children’s Research Hospital became our ‘friend in need’, along with the ‘Make a Wish’ Foundation. Above and beyond our monetary contributions, Micaela, my wife of 33 years, formed a ‘club’ for making rosaries, and taking any and all donations to our beloved charities, so that more people would feel compelled to help those poor children with nowhere else to turn.

We started our company in a back room at Sorrento’s on Parkman Rd. in Warren, Ohio. Keeping both businesses under one roof was proving to be very difficult so we built a new facility right up the street so the business could grow and flourish. After a few years, our small building was virtually bursting at the seams and we needed to expand the ‘brick and mortar’ to allow for continued growth. With a ‘lease to own’ agreement, we completely renovated a former bowling alley to become a state of the art, USDA inspected food facility, which was eight times our former size, with extra acreage for future expansion. With bona fide contracts in hand, we ordered new manufacturing lines, which would easily triple our daily, single shift output. Everybody was our friend.

With multiple years of successive double-digit growth and profits, our internal team, and acquired minority business associates, felt that the timing was right for a Reverse Merger into an existing Shell; a ‘public offering’ of the company. Lawyers and professionals were hired to properly formulate a new company, which would embody all that we were and all that we could be, and the process was set into motion. As we were reaching the finish line of dreams that can come true, we received a simple letter from Nestle USA; Nestle Prepared Foods Group; Hand Held Products Division, Englewood, Colorado.

In the side pocket

They demanded that we cease and desist our current path or they would sue for Trademark Infringement, Deceptive Trade Practices and Unfair Competition, among other things. We had been making ‘pizza pockets’ since 1991, showing them at trade shows, sometimes next to the ‘Hot Pockets’ brand with no exchange of concerns, but it was now time to get rid of their annoyance.  They had told us that they had monitored us since 1998. We made a great product, which was in growing demand, and they needed to maintain market share. It was stated by Nestlé’s that we could not afford to defend ourselves and our only option would be to change our name and what we called our product.

This multi billion-dollar company was attacking our less than 1.4 million dollar company.  We were making an impact. Making a good product, hard work and dedication had gotten the attention of the world’s largest food company. We thought it was funny. Still being somewhat naive, we didn’t notice that no one else was laughing. Read More…