Category: Intellectual Property

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The Supreme Court and IP

I would like to dissent from a recent trend that I see in IP. Two recent certiorari petitions (still pending) are asking the Court to get involved in doctrines that they have left alone for decades–the right of publicity and design patents.  These petitions are supported by many scholars that I respect, but I submit that they are making a mistake in asking for this sort of intervention.

While there are significant First Amendment issues raised by the right of publicity, I see no indication that publicity law is working poorly and needs help for the Justices.  Moreover, I see no reason to think that the Justices will actually be helpful in an area of law that they know nothing about.  Design patent, I think, is the same story, though there the argument for Supreme Court action is even weaker given the absence of any constitutional concerns.

I’m not against asking the Supreme Court to decide IP cases.  Far from it.  With respect to utility patents, there was (and still is) a need to rein in the Federal Circuit’s errors and excesses.  In the two areas that I’m highlighted, I think the Court will just mess things up and should stick with “Do No Harm.”

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Better Bar Design Means Better Revenue and Health for Bartenders

With the resurgence of cocktail culture, one may not think about a bartender’s work area, but it turns out that area is not well-designed so much so that bartenders have health problems and they can make fewer drinks. So in the age of let’s design and fix that, a bartender has come up with an “ergonomic, behind-the-bar workstation—which he calls the ‘race track’.” The new design lets the bartender stay in one place, have everything within forearm reach, and gets rid of the well (across which a bartender must lean and thus hurt his or her knees). The creator is seeking a patent, and the expected cost right now is five figures (they are hand built). The Wired piece covers some history of the bar and how ice changed the way we drink and how today the craft cocktail trend means efficiency is at a premium. As Wired notes

A good bar with a smartly built bartender station, on the other hand, is a blue-ribbon-prize-winning cash cow. Your typical cocktail den, Simó says, will rake in between $6,000 and $8,000 in sales in a night. At a nightclub, you more than triple that. A single bartender can ring in $10,000 in sales, by himself. That’s all contingent on how fast he can sling drinks, and Lafranconi says the race track is optimized for that kind of speed. “We can increase the output by about 10 to 15 drinks per hour.”

Throw in the health issues–“Tending bar in 10-hour shifts, night after night, can lead to injuries like tennis elbow, tendonitis, and plantar fasciitis”–and the future bar will let you be closer to the bartender, get your drink faster, and keep him or her in good enough health to be there the next time you visit. Pretty cool.

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Beatles in the Ether or Streaming

By now many may know that The Beatles catalog (or most of it) is available for streaming on the major services. I happen to love The Beatles and easily recommend Cirque du Soleil’s Love in Las Vegas. But the streaming option presents some questions to which I have not seen answers. First, did the services offer anything extra or special to get the rights (I can’t recall the state of streaming license law as far as flat rate or baseline rate to stream if the rights are granted)? Second, will the rights holders (I can’t recall where those have ended up) track the money from streaming versus selling the tracks and albums? If they do what will they find? Work on P2P music sharing and its effect on music and a study on the effect of free options for film may shed light on the future for Beatles revenues. The film study offered:

Together our results suggest that creative artists can use product differentiation and market segmentation strategies to compete with freely available copies of their content. Specifically, the post-broadcast increase in DVD sales suggests that giving away content in one channel can stimulate sales in a paid channel if the free content is sufficiently differentiated from its paid counterpart. Likewise, our finding that the presence of pirated content does not cannibalize sales for the movies in our sample suggests that if free and paid products appeal to separate customer segments, the presence of free products need not harm paid sales.

If music works in a way similar to film, The Beatles rights holders may expand their pie, not reduce it.

Either way I am happy to enjoy the streaming options while they last.

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Holiday Cheer – Creations for Good

A sister notices that her sister’s monitor for her blood sugar level has a weak alarm and does not work well to wake someone up at night, when the alert is critical. Sister decides maybe she can do something, and she does. Who is this mystery girl? Our own Danielle Citron shared with me (and let me share more) that her daughter, JJ, has been designing a new monitor to help diabetics (which her sister has).

JJ applied to a program to help high schoolers with STEM projects and was paired with folks at Northrup Grumman where she spent a day a month developing her idea. Along the way, JJ had to figure out what alarm noise worked best to wake someone up, program a code to link the monitor and bracelet devices, and then wired them. As her school reports

This year, Citron will continue to test and refine the design, creating the bracelet with the help of a 3D printer. When she’s finished, the bracelet will change color to let the user know immediately if their blood sugar is getting too high or too low. The detailed information from the monitor will also be linked to a smartphone app.

3D printing! Color coding! And JJ seems poised to go into computer science.

Although I am friends with Dani and have met JJ, the real point for me is that a teenager saw a problem and felt she had the room to try and fix it. Then she worked on it. Her success is lovely, but the fact of the chance is downright excellent and puts me in a great holiday mood. Of course, with Danielle as her mom, JJ may have to look forward to law professors wondering about patents, privacy, and data ownership, but those are what a good friend of mine once called “high quality problems.” Well done, JJ.

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Authentic Brands

What is authentic? The question seems to pop up in many areas. If a company or corporation claims authenticity, I am sure several folks I know would have a reflexive reaction that such a claim is absurd. Nonetheless, the Economist notes that “Authenticity” is being peddled as a cure for drooping brands. One part of the article notes that despite the ongoing difficulties in valuing brands, “when brands are sold as part of corporate takeovers, what price do investors put on them? They found that these prices, as a percentage of deals’ total value, have dropped since 2003. So, at least for those firms being taken over, the strength of their brands is becoming a smaller share of their overall worth.” That is interesting insofar as it suggests that 1) Brand value (and goodwill in that sense) can be measured and 2) That is has gone down.

What is driving the change? A key thing I have tried to show is that the issue of information or search costs is not as high as it used to be and that change brings into question many aspects of trademark law and policy. The Economist seems to agree and puts it this way

It is not hard to see why the old marketing magic is fading, in an age in which people can instantly learn truths (and indeed untruths) about the things they are contemplating buying. Online reviews and friends’ comments on social media help consumers see a product’s underlying merits and demerits, not the image that its makers are trying to build around it. The ease of accessing information makes consumers more likely to abandon their habitual brands because they have heard about something new, or learned that retailers’ own-label products are much the same, except cheaper. Depending on your perspective, people are either increasingly fickle or ever more impermeable to marketing bullshit. For brands that lack any truly distinguishing features, that is bad news.

Better information and new sources of it change the legal and brand landscape. Plus an old problem–trying to sell essentially the same goods–has returned. As Spencer Waller and I noted, “From the end of the nineteenth century to the middle of the twentieth century to today, companies have had to find ways to compete over selling essentially the same goods and manage excess production capacity.” So it is not surprising that the sectors most hit by the change The Economist discusses are consumer goods and imported goods that no longer offer difference from other, lower-cost options of the same or close to same quality.

So can a corporation be authentic? If a corporation is slinging its authenticity with Keebler Elves and Santa Claus in Coke Red, that is a harder sell. Those plays will be claiming authenticity based on cultural history and maybe a done deal in that sense (as Spencer and I discussed, the history of firms using events and education to build a sense of community and identity is old). But insofar as craft brewing, locally-made goods, and customized offerings are claiming authenticity, those may fit the authenticity claim; as long as that claim is that the item is not from a firm of a certain size or somehow to be distrusted because of size, for Scalia was correct in Citizens United that many firms of many sizes can be corporations. Assuming small and personal is a sort of authenticity, where I am not sure The Economist is correct is its example of Apple. The newspaper offers

for those firms that get the product right and have a genuine story to tell, the rewards can still be huge. The textbook example of this is Apple, whose devices’ superior design and ease of use make it a powerful brand in a commoditised market. Last year it had only 6% of the revenues in the personal-computer market, but 28% of the profits. That’s real authenticity.

If getting the product “right” is the key, then the competition is about old school “my goods and services are better quality than yours.” If the story is also key, then we have to start asking whether Apple’s claims are accurate or myth-making “bullshit” as the Economist might say. I like Apple products as they fit my needs. I buy them despite the over-claimed genius we are all tech saviors rubbish they sling. It is authentic as long as it authentic here means 100% Silicon Valley hubris. So pure it …

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Santa Coke? Goodwill to All and the Corporate Sources of the Man in the Red Suit

Many may know, but in case you don’t, the image of Santa Claus as a round man in a red suit traces its roots to a riff on St. Nick in brown and green. The linked video story via Fortune has Coca-Cola historians sharing why this creation is so great in their view. There were challenges such as increasing sales of Coke in winter and making an image of Santa that was as iconic as the Quaker Oats man. Vision, ingenuity (dare we say innovation? Dare. Dare.), and world-wide advertising spread the new Coca-Cola-red-wearing Santa far and wide. I wonder whether the idea of promoting this history is to remind folks of Coke in general and create an extra felling of warmth towards the company. And I wonder whether today Coke would try to lock down the image or let it be as ubiquitous as it is. Would the spread of polar bears wearing red and white scarves or hats be smiled upon or would the Cease and Desist letters fill lawyers’ heads and stockings as well? I hope that Coke and other corporate creators see that some of the work is cultural and can be let go without fear of losing value and maybe, just maybe, spreading goodwill to all.

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Politics of Process-Tricky Stuff

The walls between commercial and political products, processes, and speech continue to collapse. Douglas Kysar’s Preferences for Processes: The Process/Product Distinction and the Regulation of Consumer Choice, calls out that “[g]lobalization . . . has enhanced the flow of information, not merely goods, and information regarding processes increasingly is finding its way down-stream” such that “consumer preferences may be heavily influenced by information regarding the manner in which goods are produced.” (118 Harv. L. Rev. 525, 529, 641 (2004)). A recent decision by the EU highlights the tension.

According to the Economist, the EU has rules that will mean that goods made in West Bank will no longer be labeled as “Produce of Israel” but “Produce of the West Bank (Israeli settlement)”. As I have argued in Speech, Citizenry, and the Market “What we buy, what we use, how we make, and how we use have moved beyond pure, personal cost evaluations. Today the idea that purchasing choices are ‘purely private concerns’ is less clear and often inaccurate.” I think this point holds for both sides of this decision. The EU claims that the rule is “to ensure consumers are not misinformed;” not discriminate against Israel. Israel disagrees. According to the Economist at least one wine maker in the West Bank said “This will probably only make [his wines] more popular.” And “He is already planning a line of Christmas gift-boxes with additional settlement products, which he believes will be a hit in evangelical communities in America.” Is the rule increasing information or it is enabling discrimination? The answer is both views seem correct. Insofar as there is better information about where a product is made, people may choose to buy or not to buy based on politics. Thus the EU is providing more information (though may be not clearing up “misinformation”), and yes, some may not stock or buy goods made in the West Bank and in that sense discriminate.

In short, the EU rule creates the possibility for feedback from the market and that feedback can mean a range of things. As Kysar predicted, consumers “may well come to view such preferences as their most appropriate mechanism for influencing the policies and conditions of a globalized world.” If the rule influences the market, as I put the point about corporate speech, “Consumers are voting for policy through the market.” That said, if as the Economist indicated “Israel’s Economics Ministry reckons that it could cause no more than $50m-worth of damage to Israeli producers a year, out of some $300m exported from the settlements (and some $18.9 billion that Israel exports to Europe,” then it seems the gesture is trying to send a signal beyond just letting the market signal processes it cares about. As I said, the walls between commercial and political continue to collapse; maybe they were never that separate.

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China, the Internet, and Sovereignty

China’s World Internet Conference is, according to its organizers, about:

“An Interconnected World Shared and Governed by All—Building a Cyberspace Community of Shared Destiny”. This year’s Conference will further facilitate strategic-level discussions on global Internet governance, cyber security, the Internet industry as the engine of economic growth and social development, technological innovation and philosophy of the Internet. It is expected that 1200 leading figures from governments, international organizations, enterprises, science & technology communities, and civil societies all around the world will participate the Conference.

As the Economist points out, “The grand title is misleading: the gathering will not celebrate the joys of a borderless internet but promote “internet sovereignty”, a web made up of sovereign fiefs, gagged by official censors. Political leaders attending are from such bastions of freedom as Russia, Pakistan, Kazakhstan, Kyrgyzstan and Tajikistan.”

One of the great things about being at GA Tech is the community of scholars from a wide range of backgrounds. This year colleagues in Public Policy hired Milton Mueller, a leader in telecommunication and Internet policy. I have known his work for some time, but it has been great getting to hang out and talk with Milton. Not surprising, but Milton has a take on the idea of sovereignty and the Internet. I can’t share it, as it is in the works. But as a teaser, keep your eye out for it.

As a general matter, it seems to me that sovereignty will be a keyword in coming Internet governance debates across all sectors. Whether the term works from a political science perspective or others should be interesting. Thinking of jurisdiction, privacy, surveillance, telecommunication, cyberwar, and intellectual property, I can see sovereignty being asserted, perverted, and converted to serve a range of interests. Revisiting the core international relations theories to be clear about what sovereignty is and should be seems a good project for a law scholar or student as these areas evolve.

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STAR WARS!! Mash up edition

I was able to maintain a self-imposed media blackout before seeing Episode VII (less TV watching and taking command of the remote to mute/switch if an ad came on helped) and then I was able to indulge in theories, musings, and overt obsessions with the Star Wars universe. As a childhood fan who went way too often to each of the original movies and watched each special about the making, and even thought the Christmas Special (hey I was a kid) was cool, because back then more Star Wars was good Star Wars, I was most happy to come across a longer piece about Episode IV over at Slate.

For those interested in mashups, derivative works, and other aspects of copyright, the article argues that Star Wars is post-modern because of the way Lucas borrowed technique and material from a huge range of film. The article covers much I knew but much I didn’t, especially some of the short film work that influenced Lucas. It notes Dune’s influence (a point I find is not made enough but then I read that book almost every year) as well as a host of other sources. It also has a great set of video and gif work to show how the opening words, washes, western themes, robots, and so much more came from work Lucas studied and openly noted as he created the world. The admissions such as:

To draft his finale, he did something unusual: He literally cut together shots from old films. “Every time there was a war movie on television, like The Bridges at Toko-Ri, I would watch it,” he later explained, “and if there was a dogfight sequence, I would videotape it. Then we would transfer that to 16mm film, and I’d just edit it according to my story of Star Wars.” Lucas started videotaping off his TV as early as 1973, and the effects team later used his edits as a guide. Ken Ralston, who worked on the movie’s special effects, explained, “We matched frame-to-frame the action on that as closely as we could.”

might be a copyright attorney’s dream statement to try and show infringement but then copyright folks will also know the counter arguments. All of which is to say, the article is a fun read, and for me, provides perspective on creation and copyright (and maybe the predictable lawsuit by Fox alleging Battlestar Galactica had 34 similar aspects to the movie). Oh and no spoilers for the new one that I recall.

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BEER (and Brands)!! IPA, SOUR, Coors, Miller, STELLA!!!

It seemed quaint several few years ago, when someone wanted a pumpkin brew for Halloween and asked my help in finding it. Pumpkin. How novel. But craft brewing is no longer novel. According to Fortune, “Craft beer volume represented just 1% of the overall beer industry in 1994 but stands at over 11% today.” Nonetheless, the recent merger action in beer makes the craft beer industry a bit nervous.

A key issue seems to be that the merger may cut off access to craft beers, because AB InBev has been buying up distributors. The fear is that at bars and retailers one would only have access to “Bud and Miller.” As Spencer Waller and I wrote, in Brands, Competition, and the Law, branding allows businesses “to move beyond price, product, place, and position and create the idea that a consumer should buy a branded good or service at a higher price than the consumer might otherwise pay.” As Susan Strasser has explained historically, national manufacturers used branding to overcome the “strong loyalties [customers had] to the people with whom they did business, which might surpass their interest in nationally advertised products that they had not yet tried.” At the same time, local retailers knew that national goods cut into their profits and often refused to carry these new goods. Which brings us to today and some questions about beer and brands and the law. Would changing the alcohol system help or hurt?

If consumers could buy directly from alcohol makers, would that blunt the force of a beer mega-merger? For that matter, what are the main markets for craft beers? Do distributors sell say a Georgia beer only within Georgia or a radius of the brewery? Would a craft beer maker even want a world without the three tier system? Wine seems to do OK with direct sales and distribution, so I am thinking beer and even craft spirits may like that option. But I don’t know.

Also it seems that the issue is not just about price. People may want to pay more for the craft beer but can’t get it. That seems to be an incorrect outcome. I am not a deregulate everything and wonders will flow person, but I think that this industry may be heading to much more flat organization and less regulation.

Those who know about alcohol making and selling, I am all ears. Until then I may have a beer and think on this one.