Mike Masnick’s line-by-line reply:  http://www.techdirt.com/articles/20120208/01453517694/riaa-totally-out-touch-lashes-out-google-wikipedia-everyone-who-protested-sopapipa.shtml

Hat tip to Lauren Gelman.

(URL: http://seattletimes.nwsource.com/html/businesstechnology/2017372375_tweetingteens30.html in case the hyperlink above isn’t working).

I’m happy to report that Nosal is now being reheard in the Ninth Circuit. I’m hopeful that the court will do something to rein in the case.

I think most of my colleagues agree with me that the broad interpretation of the statute is a scary one. Where some depart, though, is on the interpretive question. As you’ll see in the comments to my last post, there is some disagreement about how to interpret the statute and whether it is void for vagueness. I want to address some of the continuing disagreement below.

I think there are three ways to look at Nosal:

1. The ruling was right, and the extension to all web users is fine (ouch);

2. The ruling was right as to the Nosal parties, but should not be extended to all web users; and

3. The ruling was not right as to the Nosal parties, and also wrong as to all web users.

I believe where I diverge from many of my cyberlaw colleagues is that I fall into group two. I hope to explain why, and perhaps suggest a way forward. Note that I’m not a con law guy, and I’m not a crim law guy, but I am a internet statute guy, so I call the statutory interpretation like I see it.

I want to focus on the notion of authorization. The statute at issue, the Computer Fraud and Abuse Act (or CFAA)  outlaws obtaining information from networked computers if one “intentionally accesses a computer without authorization or exceeds authorized access.”

Orin Kerr, a leader in this area, wrote a great post yesterday that did two things. First, it rejected tort based tresspass rules like implied consent as too vague for a criminal statute. On this, I agree. Second, it defined “authorization” with respect to other criminal law treatment of consent. In short, the idea is if you consent to access in the first place, then doing bad things in violation of the promises made is does not mean lack of consent to access. On this, I agree as well.

But here’s the rub: the statute says “without authorization or exceeds authorized access.” And this second phrase has to mean something. The goal, for me at least, is that it covers the Nosal case but not the broad range of activity on the internet. Professor Kerr, I suspect, would say that the only way to do that is for it to be vague, and if so, then the statute must be vague.

I’m OK with the court going that way, but here’s my problem with the argument. The statute isn’t necessarily vague. Let’s say that the scary broad interpretation fron Nosal means that every breach of contract is now a criminal act on the web. That’s not vague. Breach a contract, then you’re liable; there’s no wondering whether you have committed a crime or not.

Of course, the contract might be vague, but that’s a factual issue that can be litigated. It is not unheard of to have a crime based on failure to live up to an agreement to do something. A dispute about what the agreement was is not the same as being vague. Does that mean I like it? No. Does that mean it’s crazy overbroad? Yes. Does that mean everyone’s at risk and someone should do something about this nutty statute? Absolutely.

Now, here is where some vagueness comes in – only some breaches lead to exceeded access, and some don’t. How are we to decide which is which? The argument Professor Kerr takes on is tying it to trespass, and I agree that doesn’t work.

So, I return to my suggestion from several months ago – we should look to the terms of authorization of access to see whether they have been exceeded. This means that if you are an employee who accesses information for a purpose you know is not authorized, then you are exceeding authorization. It also means that if the terms of service on a website say explicitly that you must be truthful about your age or you are not authorized to access the site, then you are unauthorized. And that’s not always an unreasonable access limitation.  If there were a kids only website that excluded adults, I might well want to criminalize access obtained by people lying about their age. That doesn’t mean all access terms are reasonable, but I’m not troubled by that from a statutory interpretation standpoint.

I’m sure one can attack this as vague – it won’t always be clear when a term is tied to authorization. But then again, if it is not a clear term of authorization, the state shouldn’t be able to prove that authorization was exceeded. This does mean that snoops all over and people who don’t read web site terms (me included) are at risk for violating terms of access we never saw or agreed to. I don’t like that part of the law, and it should be changed. I’m fine with making it more limiting in ways that Professor Kerr and others have suggested.

But I don’t know that it is invalid as vague – there are lots of things that may be illegal that people don’t even know are on the books. Terms of service, at least, people have at least some chance of knowing and choose not to. That doesn’t mean it isn’t scary, because I don’t see behavior (including my own) changing anytime soon.

I feel like I’m scooping Jacqui here, since she’s the Madisonian Twilight expert, but I was so bothered by the recent district court decision in the Bella’s Jacket Brouhaha that I’m chiming in on the intersection of intellectual property and teen vampires.

Twilight is probably part of basic 21st century cultural literacy, so I’ll presume that, from Jacqui’s posts if from nowhere else, you’re aware of the basic contours of the very profitable films based on Stephanie Meyer’s very profitable books.

So see the jacket at right?  (Image courtesy of SashaW, apparently a big fan of the films.)  See that tiny hangtag on said jacket?  The hangtag presents an image of Kristen Stewart, in the role of Bella, wearing the same jacket.  Apparently, the jacket was originally made by BB Dakota and was formerly known as the “Leigh” jacket.  Production of the jacket was discontinued prior to the making of the first Twilight film.

For some unknown (to me) reason, a costume designer in the employ of Summit Entertainment LLC (the studio responsible for the Twilight franchise) thought that Bella (Kristen Stewart) should wear the jacket in Twilight.  Examples of such wearing from the film are here.  And Summit used the image of  Bella in her jacket as part of the promotional materials for the film, including the iconic Bella/Twilight shot, which is plastered all over the Internet.

So far so good, legally.  Since fashion design is not protected by copyright law (at least at present!) and because consumers don’t think that every piece of clothing in a movie is a sponsored product placement (at least at present!), the makers of the Twilight film did not need to get a license from BB Dakota in order to use images of the jacket in the promotion of Twilight.

Now, admittedly, there is a long-shot claim that might have been made by BB Dakota.  If people looked at the jacket in the film and associated it with BB Dakota, BB Dakota could have claimed that the appearance of the jacket in the movie suggested to viewers that BB Dakota sponsored the film made by Summit.  And if they had thought that, they would have been wrong about that implied endorsement, and that confusion could have been the basis of a trademark claim by BB Dakota.

The standard for that claim is extremely daunting, though.  Not only would BB Dakota have to prove what is called “secondary meaning” in the “trade dress” of its jacket design, it would have to show that consumers actually understood that the appearance of the jacket in the film was indicative of Dakota’s sponsorship of the film.  And even if it did that, BB Dakota would still have to overcome a very powerful (to my mind, at least) potential First Amendment defense on the part of Summit.  Simply put, Summit should not need to seek a license to have a character wear a jacket in a film–to require that would limit Summit’s freedom of expression.

Still, film makers do worry about potential claims like that.  Trademarks in many films and television shows are blurred and/or genericized due to trademark infringement liability concerns.  (They also blur and genericize, in many cases, because company logos can be protected by copyright and fair use is a risky defense.)

Putting aside the law for a second, was it fair for Summit to use the jacket in the film without compensation to BB Dakota?  After all, making a hoodie jacket can be a creative act.  Summit used the Leigh jacket in a film and BB Dakota was not paid for its creative contribution to the film.  But then again, BB Dakota benefited from the use.  If you are BB Dakota, having a troubled & angsty, vampire-loving heroine wear your hoodie jacket in a film targeted at young women is a great way to get young women interested in purchasing said hoodie jacket.  So arguably, Summit did BB Dakota a big favor by having Bella wear the Leigh jacket.  It seems like BB Dakota must have seen things this way–there’s no sign in the factual record that BB Dakota had even an inkling of annoyance that might have lead it to consider the (long shot!) trademark claim it might have brought against Summit.

So the Twilight movie comes out and the many Twilight fans who idolize Bella and identify with her turbulent romantic life seek out her jacket.  It is out there in the stores of a few retailers, but there are not many to go around.

Then things get interesting and the facts get disputed.  As far as I can make out, there are some brief emails from some non-legal folks at BB Dakota to some non-legal folks at Summit that authorize BB Dakota to use a particular image of Bella wearing the jacket in connection with the sales of the jacket.  Apparently, there are some confused talks internally within BB Dakota and there is also some confusion in communications with retailers.  The end result is that the iconic Bella Twilight promotional image is used on the hangtag that goes with the jacket, in part because someone non-legal at BB Dakota suggests that the words “As seen in the movie Twilight” would make that okay.  (However, the tag apparently did not actually use those words.  Update & correction: Professor Risch, in the post following this one, tracks down the tag, which does add those words!) The jacket was also, apparently, referred to in marketing as “the Twilight jacket,” though someone at BB Dakota denies this usage originated with the company.

Again, let’s pause to consider what’s fair now as opposed to what’s exactly legal.  Summit used the jacket in its film without asking permission from BB Dakota.  Now BB Dakota wants to sell the jacket as the jacket worn by Bella in Twilight without permission of Summit.  BB Dakota obviously wants to capitalize on the popularity of the movie, but mostly it wants to capitalize on the new popularity of the jacket it makes.

The key issue is that it adds a small hangtag to the jacket with the iconic Bella image, the one plastered all over the Internet and recognized by Twilight fans as Bella wearing the (BB Dakota) jacket.  Is it fair for BB Dakota to add this hangtag?  Note that this jacket is the jacket that Bella wore in the film, so to the extent the Twilight fans get this information it is truthful and useful information.

Summit sued. Why?

Well, let’s step into Summit’s shoes.  Imagine you are an executive at Summit, policing and monetizing the IP rights to your billion-plus dollar intellectual property franchise.  You’re making tens of millions from licensing your IP alone.  But this isn’t an easy job.  You’re up to your neck in complex negotiations, lengthy agreements, and enforcement efforts.  You want to land the best deals for getting your product line in front of consumers and you want to spin your IP into other areas: games, posters, t-shirts, and anything else you can sell to your demographic.  You’ve got pirates already doing that internationally.  At the same time, you want to maintain the quality in your brand and you don’t want to overexpose Twilight.  But you are also now ringed with hundreds of competitors in the teen supernatural space who are inching their way as closely as possible to the niche genre that you dominate, and who are more than willing to monetize any inch of the terrain that you don’t enter.

I admit that if my day-to-day job consisted of policing and monetizing the IP rights associated with Twilight, I might be a bit miffed if I saw the iconic Bella image on a hangtag of a jacket marketed as the Twilight jacket, since I would view the image and the terms “Bella” and “Twilight” as the core IP that I oversee, and I would probably view the unauthorized use of that IP as free-riding on Twilight’s economic value and goodwill.  If I happened to be a little bit on the aggressive side about the scope of the IP rights in Twilight, this is probably a good thing–it is what my employer wants.  When you’re bullish on the size and value of what you’ve got, you start your negotiations from a strong initial position.  In fact, the less I worried I was about the letter of IP law and the more immersed I was in negotiating IP deals, the more I’d be miffed by that hangtag if I worked for Summit.  (See, e.g, Jim Gibson on how industry IP negotiation dynamics generally push IP rights to expand.)

So it really isn’t too surprising to me that Summit brought a lawsuit against BB Dakota based on the hangtag shown in the picture.  It is disappointing to me, though, that Summit won its case so handily.

Actually, I think it is pretty clear that, starting from first principles, the public interest in IP law would have required a ruling in favor of BB Dakota.  But the case came out otherwise.  (An appeal might be nice, though who knows if it would come out better.)  The district court opinion, by Judge Feess of the Central District of California, is partially about bad Ninth Circuit legal precedent and partially about a rather dismissive approach by the court to BB Dakota’s various arguments.

So let’s look at the opinion.  If you want to read it, the ruling is here on Scribd.

(NB: from here on I will get a bit technical and assume the reader knows the basics of trademark law and civil procedure.)

The ruling grants summary judgment to Summit on two claims: trademark infringement and copyright infringement.  On Summit’s trademark dilution claim, it finds that dilution has occurred, but decides the question of Twilight’s fame needs to be tried.  It rejects BB Dakota’s trademark infringement claim.  I’ll comment on these four rulings in reverse order.

BB Dakota’s TM Infringement Claim

Remember the long shot claim that I suggested BB Dakota could have made based on the use of the jacket in the film?  Well, it asserted that as a counterclaim, which was fair enough as a litigation (and potential settlement) strategy. Unsurprisingly, though, the court found it was a loser.

I think Judge Feess, however, went a bit too far in criticizing BB Dakota’s argument.  From the excerpts in the opinion, it seems like BB Dakota was making the argument it had to make on this claim — people recognized the Leigh (now re-christened Nicola) jacket as the product of BB Dakota and presumed BB Dakota had sponsored Twilight.  It also conceded that it was the Twilight movie that made the jacket popular.

What’s the problem with that?  Judge Feess seems to think it would be impossible for people to watch Twilight and understand that BB Dakota, not Summit, created Bella’s jacket.  Apparently, he thinks that all new brand value created in the Twilight movie must be brand value owned by Summit:

“Common sense dictates that BB cannot sue summit for appropriating or trading off that which Summit has created.”

The thing is that Summit didn’t create the jacket.  Fans that went looking for Bella’s jacket quickly ascertained, based on their own research into the movie and the jacket, that the jacket was made not by Summit, but by BB Dakota.  So yes, Twilight could have created secondary meaning for a jacket made by BB Dakota.  That is a possibility.

As I said before, though, I think the claim was a loser out of the gate, but I think it should have been dismissed on the basis of either BB Dakota’s abandonment of the trade dress prior to the film’s debut or BB Dakota’s failure to provide sufficient evidence of secondary meaning–or some other ground.  But I don’t think the observation that “Summit made the Twilight film” should have killed this claim.

Summit’s Dilution Claim

I can’t get too upset about this one because, like most trademark law professors, I can’t really make heads or tails of what trademark dilution is.  Perhaps that’s why we all keep writing about it?

Under the TDRA, my current impression is that dilution is more or less about preventing unauthorized dilutive associations with famous marks.

So…

Did consumers associate Bella’s jacket with Twilight?  Yes.

(I might add: Does the TDRA’s standard of trademark “association” have any redeeming basis in rational legal thought?  Probably not.)

(I might also add: Does the TDRA have even a smidgen of connection with the public’s interest in trademark law?  No.)

The court finds that the use of Summit’s marks by BB Dakota was dilutive.  It finds this becasue trademark dilution is all about divorcing trademark law from consumer protection and letting it morph into a sort of quasi-copyright protection for “famous” marks.  I’ll note that this is in blatant violation of what the Supreme Court stated about the fundamental nature of trademark law in The Trademark Cases, but I think most trademark lawyers get that — very few people have offered cogent defenses of trademark dilution.  So it is not the court’s fault that it finds the use here dilutive under the TDRA; it’s Congress’s fault for enacting the law in the first place.

Curiously, though, the district court is not convinced that Twilight is famous.  (!!!)

In the early days of the FTDA, the precursor to the TDRA, some courts were strict about fame this way. Then, over time, they decided that very local companies like Wawa (the local coffee and sandwich chain around Philadelphia) were famous for dilution purposes.  The TDRA is designed to prevent that result, but I don’t think it will prevent Summit from successfully arguing that Twilight is famous.  (If dilution law made sense, I might ask if the Twilight mark were famous for clothing, but since the TDRA is so gloriously market-agnostic, completely out of keeping with any sensible understanding of trademark law, I can’t ask that question.)

Summit’s Copyright Claim

Summit’s copyright claim is based on the iconic image of Bella.  BB Dakota used the image in the hangtag and in some other marketing materials (e.g. emails and website.) In other words, it used the same image that is plastered all over the Internet and that several legal bloggers have used to illustrate their commentary on this case.  BB Dakota defended on the basis of consent, equitable estoppel, and fair use.  I’ll ignore consent and estoppel, since I don’t see any problems with the way the court handled those.  But Judge Feess really glosses over BB Dakota’s fair use arguments in a way I find disturbing.

For starters, Judge Feess accepts Summit’s argument that “[w]holesale copying of copyrighted material precludes application of the fair use doctrine.”  The cite is to a pre-Sony case, Marcus v. Rowley (9th Cir. 1983).  I doubt the standard adopted here is really the correct fair use standard (woe be to certain legal bloggers otherwise!) — instead I’d rather say that verbatim copying weighs (strongly?) against a finding of fair use.  Since the “amount used” is the third factor in the fair use test, it would be sort of odd to have a bright-line rule that if that factor = 100%, there is no need to consult the other factors.  Indeed, many courts now have permitted entire works to be copied and found that copying the entire work can be fair use.

Judge Feess then goes on to say that if, arguendo, all four factors were considered, the Bella hangtag would still fail to be a fair use.  BB Dakota made what I think is a plausible case for fair use by marching through the four factors, but the court called it “extraordinarily wooden–at best.”  The court’s analysis, though, extraordinarily brisk–at best.  Judge Feess spends about a sentence or two on each factor and completely glosses over the fact that the image is being used not to sell consumers hangtags, but to inform consumers that this is the same jacket that Bella wore in Twilight. But the specific context of the use here is hardly noticed.  Opinions like this are why predicting the outcome of copyright fair use cases is so impossible.

Not that Judge Feess could have considered this, but why do we even protect copyright in hangtags?  Lisa Ramsey has explained that when images like this are used for advertising promotion, there really isn’t much need for copyright protection.  I tend to agree.  Indeed, the ubiquity of the Bella image on the Internet seems to indicate that Summit isn’t too bothered by its reproduction, when it is not used in conjunction with the sale of jackets.

Summit’s Trademark & Unfair Competition Claims

Of all the rulings, the trademark ruling was the one I found the most disheartening.  In theory, the question the court should be considering is whether the use of the hangtags confused consumers about the source of the jacket.  That’s what trademark law is about.  So did placing the iconic Bella image on the hangtag lead consumers to believe that Summit produced or exercised quality control over the production of the jacket?

Usually courts in the Ninth Circuit march through a list of factors to determine this, but in cases like this one, where the defendant is using the mark to make reference to the plaintiff’s goods, the Ninth Circuit has saddled its district courts with the bizarre doctrine of “nominative fair use.”  I say “bizarre” with full knowledge that this may be an idiosyncratic view–many trademark lawyers know all about New Kids on the Block and think Justice Kozinski’s invention was keen and nifty.  In my opinion, though, the Supreme Court in KP Permanent correctly determined that the so-called defense was actually a presumption in favor of the plaintiff on the issue of consumer confusion.  Judge Kozinski recently revisited the doctrine in Tabari, as Rebecca Tushnet notes in this blog post, but I don’t think he improved the situation very much.

Essentially, the Supreme Court in KP Permanent said that if there is a fair use defense to trademark infringement, then that defense should be raised by the defendant — after the plaintiff meets the burden of establishing a likelihood of consumer confusion created by the defendant’s use.  So what’s the rule in the Ninth Circuit now?  According to Tabari, the plaintiff now has the burden of disproving that the nominative fair use test applies.  If the plaintiff succeeds in negating the defense, this establishes the likelihood of confusion.

If the Ninth Circuit’s nominative fair use test had some strong connection to ascertaining actual consumer confusion — i.e. whether consumers thought that Summit sponsored the jacket — this might be okay.  It would amount to a specialized test for determining confusion in a specialized set of cases.  Federal courts have plenty of these specialized trademark infringement tests and its makes sense to have customized rules for special sorts of cases.

The problem is that the nominative fair use test is skewed toward treating trademarks like copyrights, not toward determining consumer confusion.  The three prongs are whether:

(1) the product was “readily identifiable” without use of the mark;

(2) defendant used more of the mark than necessary; or

(3) defendant falsely suggested he was sponsored or endorsed by the trademark holder.

It’s the second prong of the nominative fair use test that becomes especially pernicious in a case like this.  A test like this makes the exact copy on the hangtag, especially the typeface, important to the court.  BB Dakota’s use of the distinctive typeface borrows “too much” of the Twilight trademark.

But what does that “too much” have to do with how likely it is that consumers would think Summit was actually the party selling or authorizing the sales of the jackets?  The first two prongs of nominative fair use seem way out of line with the standard factors in a consumer confusion analysis, such as the sophistication of purchasers and the proximity of markets.

Nominative fair use in the Ninth Circuit is described as a shield for defendants, but it really operates as a sword for plaintiffs.  The nominative fair use test prevents the court from squarely considering what is going on in the minds of consumers, instead requiring it to get caught up in the misappropriation of the distinctive typeface used on the hangtag.

It would have been nice if Judge Feess could have thought about the Sleekcraft factors, but Tabari says that is not allowed.  Even if Sleekcraft controlled, it is possible that consumers would have believed the Summit endorsed the sale of the jackets due to the hangtag.

Trademark law today very often involves parties that don’t produce goods licensing their marks for use by parties that do produce goods.  So Pixar might license a toy maker to make toys for it.  If an unlicensed entity were to make a toy bearing the Pixar brand and a customer were to buy that toy due to Pixar’s reputation for quality, the consumer could be harmed if the unlicensed good had inferior qualities to those that Pixar would guarantee.

But that’s not the case here!  This is not a situation where some random company starts to make a random jacket and sells it as a “Twilight jacket.”  Rather, this is a case where Summit made a movie where Kristen Stewart did wear this exact jacket in Twilight.  Twilight fans purchasing what BB Dakota is selling are getting exactly what they want: they are getting Bella’s jacket. No harm, no foul–BB Dakota should win.

Of course, BB Dakota doesn’t get to make this argument because trademark law doesn’t even permit BB Dakota to raise it.

Indeed, if Summit were to make its own jacket and sell it to consumers as Bella’s jacket (which it may well do after this case), then that would actually be more deceptive than what BB Dakota did.  The jacket that Summit sells will not be the jacket that Bella wore.  It may be licensed, but the BB Dakota jacket is Bella’s jacket.  Summit did not make Bella’s jacket.

Judge Feess, of course, did not have the freedom to point that out.  He applied the law that applies in the Ninth Circuit, and he didn’t have the freedom to invent an alternative to the nominative fair use dictated by Tabari.

What distresses me is not so much the ruling, but how much the opinion exemplifies the general trend in trademark doctrine of ignoring the interests of consumers in favor of the proprietary claims of powerful franchises.  Ideally, trademark doctrine would primarily reflect government’s solicitude for the public’s interest in truthful commercial communication.

So this has been a longish post (3500 words!), but thanks for reading it through to the end.  Sometimes it seems the smallest things, like the hangtag on a hoodie jacket, provide the easiest avenues for complaining about the largest problems with the contemporary scope of trademark law.

This remix-of-a-remix can be seen at the beginning of the 40 minute Tesla coil concert here.

TUMS is also on Twitter.

Applications for new gTLDs will begin early in 2012.  It will be interesting to see how effectively this program is administered particularly in dealing with battles between trademark holders and others.  Additionally, it will be interesting to see if the possibility of so many new gTLDs actually does make any inroads into the prominence of the .com space over time.

Will singer-songwriters like Coulton, or iTunes-inspired impresarios, capture the bulk of future music revenues? Only time will tell.

X-Posted: Concurring Opinions.