Jury Correctly Recognizes That Print-On-Demand Website Isn't A 'Counterfeiting' Business Engaged In Infringement

from the good-to-see dept

Phew. Earlier this year, I wrote about a case I witnessed down in LA, in which the print-on-demand website RedBubble was deemed by a jury to have infringed on the trademark rights of the clothing store Brandy Melville, despite not actually selling any items that matched Brandy Melville's trademarks on clothing that Brandy Melville sells -- and being extraordinarily proactive in taking down things once alerted to the fact that certain designs might be infringing. Again, as noted, I served as an expert witness in that case and filed a report, but did not need to testify. The very same law firm, representing a few different plaintiffs, has been busy suing RedBubble and other print-on-demand businesses, apparently trying to carve out a niche. Since that ruling, there has been a lot of back and forth between the parties (some of it quite... emotional), but as it stands now, the ruling has been appealed to the 9th Circuit, where it should be an interesting one to watch.

Another case, from the same law firm, against RedBubble was filed on behalf of Atari. Again, I was an expert, and filed a report. As the trial approached, the lawyers for Atari sought to exclude me from testifying, which was (at the very least) amusing, as it claimed that I "cannot offer an opinion as to the difficulty of content moderation generally" (despite highlighting how much academic work I've done doing research, reports, and other projects regarding content moderation). For a variety of reasons (unrelated to that filing), I didn't get to testify this time either, but thankfully the end result of this case was different than the one in LA: the jury found no infringement at all by RedBubble.

I wasn't able to attend this case in person like the last one, so I didn't get to witness the full trial, but RedBubble's Motion for Judgment as a Matter of Law filed at the conclusion of the trial lays out a pretty clear picture of what happened. At the trial, it was made clear that RedBubble, as a print-on-demand service, is simply an intermediary, not the actual seller of any of the products.

Here, the evidence introduced at trial shows as a matter of law that Redbubble is merely a transactional intermediary. First, it is undisputed that Redbubble does not control essential terms of the transaction. As Redbubble’s witnesses Mr. Deshais, Mr. Toy, and Mr. Hosking testified, Redbubble does not select the art that is offered for sale, the particular products (such as t-shirts or mugs) on which a piece of art may be printed, the title and tags for a product listing, or the price of product—the artist controls those details. Mr. Hosking also testified that Redbubble exists to allow artists to sell their art to a global audience. See Milo & Gabby LLC v. Amazon.com, Inc., 693 F. App’x 879, 886–87 (Fed. Cir. 2017) (holding that Amazon was not a “seller” for direct copyright infringement, in part because Amazon “did not control what information or pictures were put on the product-detail page, nor did it control the price for which the product was sold”; rather, “third-party sellers as applicable to their products, controlled these details at all times”); see also Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93, 103 (2d Cir. 2010) (eBay not directly liable for sale of counterfeit Tiffany jewelry on its website). Indeed, in Y.Y.G.M. SA v. Redbubble, Inc., the court granted summary judgment for Redbubble on the question of direct trademark liability, reasoning that because Redbubble’s service fee is the same regardless of the price charged by the artist, Redbubble’s “fee-based business model indicates the role of a service provider rather than a seller, as a seller almost invariably adjusts its price in relation to the value of the goods in question.”

Also, a key in both cases is that the law firm for the plaintiffs wanted to show counterfeiting (which has significant statutory damages). But to counterfeit, you have to show that they're selling an actual copy of a product being sold and that the seller knew it was counterfeit. That didn't happen:

Atari has not shown that Redbubble intentionally used a counterfeit mark or knew that the mark was counterfeit. The Ninth Circuit has held that to receive statutory damages for counterfeiting, the plaintiff must show that “(1) [The defendant] intentionally used a counterfeit mark in commerce; (2) knowing the mark was counterfeit; (3) in connection with the sale, offering for sale, or distribution of goods; and (4) its use was likely to confuse or deceive.” State of Idaho Potato Comm’n v. G&T Terminal Packaging, Inc., 425 F.3d 708, 721 (9th Cir. 2005); McCarthy 25:10 (“Counterfeiting is the act of producing or selling a product with a sham trademark that is an intentional and calculated reproduction of the genuine trademark.” (emphasis added)).

Even assuming Atari can prove that a counterfeit mark was used on Redbubble, Atari did not provide any evidence that Redbubble acted with intent or knowledge that any design was a counterfeit mark. Indeed, the Court already resolved the issue of Redbubble’s knowledge at summary judgment, holding that “Atari fails to establish either knowledge or willful blindness to infringement of Atari’s copyrights,” Dkt. No. 97 at 31, and that it “reaches the same result as to Atari’s trademark claims,” Dkt. No. 127 at 2. This is because “Atari provides no evidence that Redbubble knew of specific infringing material.” Dkt. No. 97 at 28-29 (cleaned up). To know that a mark was counterfeit and intentionally use a counterfeit mark in commerce, Redbubble would have to know of the specific material in question, which the Court has already ruled Redbubble does not. Even had the Court not already decided that issue, Atari did not provide any evidence at trial suggesting Redbubble had knowledge of specific material on its website, much less that any specific material constituting a counterfeit mark. Thus, the Court should grant judgment for Redbubble on Atari’s counterfeiting claim.

I am assuming that Atari will appeal to the 9th Circuit, and these two cases are going to be fairly important in determining whether or not print-on-demand can even exist as a business.

In my post on the Brandy Melville case, I noted that it was a sneak peek into a world without intermediary liability protections like Section 230 (since courts have determined that trademark is outside of the protections of 230). Even this "victory" highlights how important protections like Section 230 are. The key benefit of Section 230 is that it helps get cases like this one dismissed early and inexpensively. Even with RedBubble's win here, this case had to go through many expensive stages, including all the way through a jury trial (which is insanely expensive).

I've seen some people say that without 230 things will be fine because companies can still win down the road, but the expense of reaching "down the road" may be way too much for many companies, especially smaller ones, to survive. It's good that RedBubble won here, though I expect the real battle over all this is only just about to start on the appeal.

Filed Under: copyright, counterfeiting, intermediary liability, jury, print on demand, section 230, trademark
Companies: atari, redbubble

Two Years Later, Judge Finally Realizes That A CDN Provider Is Not Liable For Copyright Infringement On Websites

from the this-is-why-procedural-outs-are-important dept

More than two years ago we wrote about a truly bizarre ruling in a truly bizarre copyright lawsuit against Cloudflare. As you (perhaps?) know, Cloudflare is a popular CDN provider, helping websites (including Techdirt) provide better access to users while helping to mitigate things like denial of service attacks. In this case, the plaintiffs, Mon Cheri Bridals -- a maker of bridal dresses -- sued Cloudflare because websites out there were selling counterfeit dresses. If you know anything about copyright (and counterfeiting) law, you should be scratching your head. Counterfeiting is not about copyright. It's about trademark. But the dress company (for reasons I still don't understand), made the stretchiest of stretchy arguments to say that (1) the counterfeit sellers were posting images of the dresses, and (2) those images were protected by a copyright held by the dress maker, and (3) because the counterfeiting sites posting the allegedly copyright infringing photos used Cloudflare for CDN (not hosting) services, that somehow makes them contributory liable for the copyright infringement.

Even worse, the complaint itself was extremely confused about the DMCA and how it works with regards to the DMCA 512 safe harbors. Different companies are treated differently under 512, and Section (b) companies for "system caching" (which is what CDNs do) are treated differently under the law than Section (c) hosting companies. However, the whole "notice and takedown" aspect of the law only applies to Section (c) type companies. But the lawsuit simply ignored that and assumed that Cloudflare should be a (c) company, rather than a (b).

And, astoundingly, as we wrote about two years ago, the judge refused to dismiss the case, but let it move forward past the motion to dismiss stage -- meaning that it went through some very expensive discovery and other efforts before finally getting to the summary judgment stage, and now more than two years later, the judge granted dismissal on summary judgment. And, kinda like his refusal to dismiss, the opinion is kinda short and doesn't get into much in the way of detail. But at least this time it gets it right.

The plaintiffs have not presented evidence from which a jury could conclude that Cloudflare’s performance-improvement services materially contribute to copyright infringement. The plaintiffs’ only evidence of the effects of these services is promotional material from Cloudflare’s website touting the benefits of its services. These general statements do not speak to the effects of Cloudflare on the direct infringement at issue here. For example, the plaintiffs have not offered any evidence that faster load times (assuming they were faster) would be likely to lead to significantly more infringement than would occur without Cloudflare. Without such evidence, no reasonable jury could find that Cloudflare “significantly magnif[ies]” the underlying infringement. Amazon.com, Inc., 508 F.3d at 1172. Nor are Cloudflare’s services an “essential step in the infringement process.” Louis Vuitton Malletier, 658 F.3d at 944. If Cloudflare were to remove the infringing material from its cache, the copyrighted image would still be visible to the user; removing material from a cache without removing it from the hosting server would not prevent the direct infringement from occurring.

Cloudflare’s security services also do not materially contribute to infringement. From the perspective of a user accessing the infringing websites, these services make no difference. Cloudflare’s security services do impact the ability of third parties to identify a website’s hosting provider and the IP address of the server on which it resides. If Cloudflare’s provision of these services made it more difficult for a third party to report incidents of infringement to the web host as part of an effort to get the underlying content taken down, perhaps it could be liable for contributory infringement. But here, the parties agree that Cloudflare informs complainants of the identity of the host in response to receiving a copyright complaint, in addition to forwarding the complaint along to the host provider.

This is the correct ruling, but it should have come two years ago at the motion to dismiss stage.

Indeed, despite not being a Section 230 case, this is yet another example of why Section 230's procedural benefits are so important. Perhaps one reason why people don't get this is that they don't understand just how much more expensive a lawsuit gets after a motion to dismiss, but it's a massive shift. A motion to dismiss may run in the 100s of thousands dollars range (depending on a variety of factors). But if you get past that and have to go to discovery, you're now talking in the millions before you get a ruling on summary judgment. It's a big difference and a massive cost for companies (especially smaller ones). A cost that can completely destroy smaller companies -- for a lawsuit that had no chance at all from the beginning.

Filed Under: cdn, copyright, counterfeiting, dmca, dmca 512, safe harbors, summary judgment
Companies: cloudflare, mon cheri bridals

Rep. Jerry Nadler Pushing New Bill That Will Destroy Online Commerce; Make Sure Only Amazon Can Afford The Liability

from the how-does-this-help dept

'Tis the season for terrible, horrible, no good bills to destroy the open internet. First up, we've got Rep. Jerry Nadler, a close friend of the always anti-internet lobbying force that is the legacy copyright industries. Earlier this year he introduced the SHOP SAFE Act, which is due for a markup tomorrow, and has an unfortunately high likelihood of passing out of committee. The principle behind the Act (which Nadler has now updated with a manager's amendment) is that "something must be done" about people buying counterfeit goods online.

Not addressed, at all, is whether or not counterfeit goods online are actually a real problem. I know that industry folks always insist that counterfeiting is a scourge that costs billions, but actual research on this shows something different entirely. A GAO report from years back showed that most of the stats regarding counterfeiting are completely exaggerated and multiples studies have shown that -- far from "tricking" people -- most people who buy counterfeits know exactly what they're doing, and that for many buyers, buying a counterfeit is an aspirational purchase. That is, they know they're not buying the real thing, but they're buying the counterfeit because that's what they can afford -- and if they can afford the real thing at a later date, they will buy it. But nearly all of the public commentary on counterfeiting assumes that the public is clueless, and being "tricked" into buying "dangerous" counterfeits.

The second bad premise behind the SHOP SAFE Act is that the "real problem" is Section 230 (because everyone wants to assume that Section 230 can be blamed for anything bad online). So the core approach of the SHOP SAFE Act is to add liability to websites that allow people to sell stuff online. However, as EFF notes in its write up about the problems with this bill, if you try to sell something via Craigslist or even just via Gmail, the bill would effectively make those companies liable for your sale.

One measure platforms would have to take under SHOP SAFE is verifying the identity, address, and contact information of any third-party seller who uses their services. Imagine if you had to provide a copy of your driver’s license to Craigslist just to advertise your garage sale or sell a used bike. As over the top as that seems, it’s even worse when you think about how this would apply to services like Gmail or Facebook. Should you really have to provide ID to open an email account, just in case you sell something using it? Requirements like this threaten not only competition but user privacy, too.

I don't know why we need to keep explaining this, but when you add more liability to internet platforms, you get fewer internet platforms. This bill would effectively lock in Amazon and a few other giant companies as the only ones who could leap through the convoluted bureaucratic (and privacy-destructive) nonsense that this bill requires. Again, from EFF:

Other provisions of SHOP SAFE put the burden of rooting out counterfeits on platforms, rather than on the trademark holders who are in the best position to know a real from a fake. Most concerning to us is the requirement that platforms implement “proactive technological measures” for pre-screening listings. This provision echoes calls for mandatory automated content filtering in the copyright context.

Just a few months ago, I wrote about a trial regarding claims of counterfeit goods in an online marketplace, and just how much the lawyers leaned on the fact that the platform must know what's real and what's not (when even the trademark holder's own representative admitted she wasn't sure which products were real and which were counterfeit). Yet this bill, like so many other bad intermediary liability laws, presupposes that platforms -- which often have to handle millions of new product listings -- can magically stop all counterfeits from appearing.

It's disappointing (if not at all surprising) that the ABA's "Intellectual Property Law Section" is super thrilled with this bill (I mean, it's like a full employment act for IP lawyers) and claims that it will "facilitated robust e-commerce removal and reporting" in a manner that makes it sound similar to the DMCA's safe harbor provisions (which already have significant overblocking problems). But as EFF notes, this takes the entire principle of the safe harbor ("you're protected from liability if you take these steps") and flips it on its head.

SHOP SAFE’s requirements go far beyond the DMCA’s, while lacking safeguards like a counternotice procedure and penalties for bad-faith takedowns. SHOP SAFE also takes the DMCA’s safe harbor structure and flips it upside down. The DMCA incentivizes platforms to adopt certain policies and practices by providing a true safe harbor—that is, platforms that choose to satisfy the safe harbor requirements can be confident that they cannot be held liable for infringement by their users. SHOP SAFE doesn’t work this way. Instead, it creates a new, independent basis for secondary infringement liability, and it directs that all covered platforms must implement a range of practices or else be held liable for any trademark infringement by their users. The DMCA’s safe harbor framework is preferable because it incentivizes desired behavior while maintaining flexibility for different approaches by different platforms according to their unique characteristics.

Everything about the SHOP SAFE Act seems designed to create problems for the open internet. I know that Rep. Nadler doesn't care about that, but you and I should. Anyone who regularly relies on the internet for buying and selling things should be concerned about this bill and what it will do to the internet. It will make it that much harder for you and I to buy or sell stuff. It will give more power to the giant e-commerce companies, such as Amazon, who can handle the regulatory burdens here, but it will make it nearly impossible for competitors to come along, and will make it effectively impossible for people to do more informal sales to each other using the internet as an intermediary.

It's a dangerous bill and it should not move forward in its current form.

Filed Under: counterfeiting, counterfeits, jerry nadler, liability, marketplaces, section 230, shop safe, shopping
Companies: amazon

Last Month In An LA Court I Witnessed The Future Of A World Without Section 230; It Was A Mess

from the couldn't-you-have-done-more dept

Disclosure: I was an expert witness for RedBubble in this case (and another case) and submitted some reports regarding this case much earlier in the process, though I did not testify at this trial. I had nothing to do with this trial other than attending it as an interested observer, concerned about litigation involving content moderation. As you can see, however, my opinions on this remain identical to my opinions on content moderation going back basically forever...

There's been a lot of talk lately about "repealing" or "reforming" Section 230. We've explained at great lengthy why this would be a mistake and would lead to a ton of frivolous litigation. Section 230 co-author Senator Ron Wyden has referred to this as creating a situation where website operators would face "death by ten thousand duck-bites." Professor Eric Goldman has explained the procedural benefits of Section 230 in that it helps get rid of these cases more quickly. And while some (including myself) have pointed out that the 1st Amendment would still protect most claims, without the procedural benefits of Section 230, we'd still see a ridiculous number of nuisance lawsuits in which companies would have to defend each and every content moderation decision. This would be made significantly worse if the law changes in a manner proposed by folks like law professor Danielle Citron, to require websites to show that their content moderation practices are "reasonable," which would require expensive litigation to determine.

The thing is: we have an area where we can actually see this in practice. There is something of a loophole within Section 230: trademark law. From the beginning, Section 230(e)(2) has excluded intellectual property law. For copyright, that gap was filled (not particularly well) by the notice-and-takedown provisions of the DMCA Section 512. But trademark has no official intermediary protections in US law. Experts like Mark Lemley have long advocated for harmonizing the various intermediary laws so that they're all consistent. Many people had thought that perhaps the courts had settled the issue with regards to trademark in the infamous Tiffany case against eBay, in which the courts said that eBay shouldn't be expected to be perfect, and as long as it has some sort of program to deal with counterfeits, then it is no longer liable for counterfeits on its site.

However, last summer, a federal judge in LA effectively re-opened the issue in a case brought by the holding company that controls the "Brandy Melville" clothing brand against print-on-demand website RedBubble. Brandy Melville argued that RedBubble was violating its trademarks (and copyrights) in printing some of its designs, and while the judge did toss out much of the case, he allowed a few parts to move forward to a jury trial. The judge said that the Tiffany v. eBay rule didn't necessarily apply -- since that was a case of users selling physical products, whereas with RedBubble, the company would take designs uploaded by users, and pass them on to various print shops for the actual printing. So the open question, in theory, was whether or not that deeper involvement opened itself up to contributory liability (the judge correctly dismissed the claims about direct infringement). There were a few other oddities about the judge's ruling as Eric Goldman noted at the time:

However, the Ohio State ruling didn’t address contributory trademark infringement, and this court sends that issue to the jury. Unlike Tiffany v. eBay, which involved legitimate used resales of Tiffany items, the court says “Redbubble is not burdened by the need to parse valid uses of Brandy Melville’s trademarks from invalid ones, as Brandy Melville has made clear to Redbubble that there are no legitimate sales of Brandy Melville products through its site. As such, all uses of Brandy Melville’s marks that appear on Redbubble’s website are presumptively infringing.” I doubt the court means this statement so baldly, as it disregards parodies, nominative uses, and other legitimate activities. Similarly, the plaintiff complained that RedBubble hasn’t disabled internal consumer keyword searches for its trademarks, but that doesn’t seem like a right exclusive to the trademark owner in light of MTM v. Amazon.

In practice, however, pretty much the entire trial revolved around whether or not RedBubble "did enough" in its content moderation. Over and over again, the lawyers for Brandy Melville kept trying to insist that any failures by RedBubble's content moderation was proof that it did not do enough. Indeed, in the closing arguments, even after it had been pointed out that RedBubble spent millions of dollars per year on its content moderation efforts, and had removed every example that Brandy Melville's lawyers had sent them within a day or two, the lawyer straight up asked the jury "don't you think RedBubble could have done more?"

There were a number of other oddities that came out during the trial. The trial was explicitly about just three specific trademark designs that Brandy Melville held -- two of which never actually appear on the front of t-shirts or other products (the company said it only used them on clothing hang tags and on store signs), and one that the company registered just weeks before suing. Incredibly, Brandy Melville put on the stand a manager of some of their stores who admitted two incredible things: (1) that she was unable to tell which products on RedBubble were legitimate and which were infringing (so how the hell could they expect RedBubble to just know?!?) and (2) that in many years of working and managing Brandy Melville stores, she could not recall a single time that anyone ever brought in a RedBubble product to "return" it. That latter point really stuck with me because it highlighted the near total lack of confusion, which is a key point in trademark infringement. There needs to be confusion.

Another oddity: Brandy Melville kept focusing on the fact that RedBubble refused to block all tags that included "Brandy Melville" or any search results on "Brandy Melville." But as Goldman noted above (and the judge seemed to miss), that's not a right that trademark law gives a trademark holder. RedBubble pointed out that it actually used the tagging system as part of its content moderation efforts -- and that letting users tag stuff "Brandy Melville" made it easier for its content moderation team to find and review those items to see if they infringed. Also, while it only came up exceptionally briefly, one of the products that was on RedBubble's site was a t-shirt that read: "Fuck Brandy Melville," which is clearly commentary/parody -- and not something anyone would assume came from Brandy Melville itself. Brandy Melville cannot abuse trademark law to say any and all use of the term must be blocked. That's not how trademark law works.

For its part, RedBubble spent plenty of time describing the extreme lengths it goes to try to prevent infringing works on its site, including making use of various technologies, having a large team of human reviewers, and working closely with lots of brands to better understand what is and what is not infringing. But, again, the plaintiff's focused on "is it enough."

And, because they kept focusing on a very few examples where Brandy Melville logos or other designs were found on RedBubble, that was proof that, no, the company did not do enough. And... the jury bought it. At the end of the three day trial, the jury said that RedBubble was liable as a contributory infringer, including not just for trademark infringing, but for counterfeiting. This was particularly bizarre because for there to be counterfeiting, there needs to be an actual copying of a product sold by the trademark holder. And, as already noted, two out of the three designs were never actually used on the front of products by Brandy Melville, and as for the third design (the "LA Lightning" mark -- which, seems like it may have its own trademark issues, considering it was yanked from an independent professional basketball team), they never seemed to show exact copies of it on any RedBubble products either. Instead, somewhat bizarrely, Brandy Melville focused on very distinct and different variations on the logo that appeared on RedBubble products -- including a clear parody one for University of Florida students. And the counterfeiting issue was key to Brandy Melville's case, because it would allow them to ask for statutory damages, running up into multiple millions of dollars.

And this is a clear issue with litigation around content moderation: the jury was primed over and over again to believe that any mistake makes the company liable. Brandy Melville's lawyers just kept showing designs that mention Brandy Melville or looked similar to Brandy Melville (frequently for products that Brandy Melville had no trademark over) and then just kept harping on the fact that Brandy Melville didn't approve any of this, and clearly RedBubble was a "counterfeiting" site. In the end, the jury awarded $520,000 to Brandy Melville ($300k "counterfeiting" for the "Brandy Melville" mark, $200k for "counterfeiting" the LA Lightning mark, and then $20k for trademark infringement.)

At the close of the case, RedBubble immediately sought a judgment as a matter of law to effectively try to take the case out of the jury's hands (arguing that Brandy Melville failed to present enough evidence and the judge could rule on the matter directly without needing the factual deliberation of the jury). This week the judge did in fact rule that the $300k for contributory counterfeiting on the Brandy Melville mark was improper, bouncing the award down to $220,000.

As the judge noted, the fact that RedBubble's products were not the same as anything Brandy Melville made regarding those logos, meant that there couldn't be a legitimate counterfeiting claim for that mark:

Here, Plaintiff failed to present evidence of products that bore a spurious Brandy Melville Heart Mark and were offered for sale on Redbubble.com that were remotely similar to products that Plaintiff offered for sale, let alone "stich-for-stitch copies" of Plaintiff's products. The Court therefore concludes that the evidence presented at trial permits only one reasonable conclusion--Plaintiff failed to establish that Redbubble is liable for contributory counterfeiting of the Brandy Melville Heart Mark.

The end result is way below the many millions of dollars Brandy Melville was seeking, though even the small amount it got seems ridiculous based on an understanding of what actually happened.

But, there's a larger point here: this case was an unfortunate alternate reality universe view of what will happen without Section 230 or if we moved to a Citron-style "reasonable" standard. You'd get a ton of litigation in which everyone was just going back and forth arguing over what the "right" level of content moderation is, and arguing that any mistakes were evidence that "not enough" was being done by the companies. That's a disaster scenario, one in which any simple mistake (even where there's perhaps strong evidence that no mistake was actually made) is subject to the whims of a jury (or a judge) and an expensive, time-consuming trial. I recognize that law professors might not care that much about all of this wasteful litigation, but in the real world it matters a ton. This kind of thing can, and will, kill off smaller companies, even if they can succeed in court. And that doesn't help anyone, except possibly some trial lawyers who can threaten and shake down tons of websites.

Filed Under: content moderation, counterfeiting, intermediary liability, jury trials, print on demand, section 230, trademark
Companies: brandy melville, redbubble

Gibson Guitar Declares Shift In IP Enforcement After Most Recent Public Backlash

from the new-leadership dept

Our past posts on Gibson Guitar, the famed guitar-maker, have revealed roughly a decade of strict IP enforcement and other busuiness challenges. Between waffling on its support for SOPA and its own failures to properly innovate in a direction that met its customers' demand, never mind its odd legal trouble over "illegal" wood used in its guitars and the bankruptcy it underwent a few years back, we're not left with a picture of a well-oiled business. Despite that, emerging from bankruptcy, Gibson has continued its IP maximilist ways, most notably in the past few weeks with a lawsuit against the owner of Dean and Luna Guitars for trademark infringement and counterfeiting over several guitar body designs that the defendants claim aren't protectable.

There are two important aspects of that specific dispute to note here. First, the public backlash against Gibson over the lawsuit was firm and swift. Second, this specific dispute originated with cease and desist notices sent out by Gibson's legal team back in 2017. That is particularly notable as it was only in November of 2018 that Gibson brought on a new CEO, James Curleigh. In the wake of the backlash over the past few weeks, Curleigh has gone out of his way to promise the public that Gibson is going to quickly move on from its IP maximilist ways.

Regarding criticism Gibson has faced for its legal actions, the company said in a statement that the past few weeks “have provided a ‘real time’ opportunity to start making the pivot from less legal leverage to more industry collaboration, with appropriate levels of awareness.” Furthermore, the company clarified that the recent attention on the lawsuits in process stem from several years of legal action initiated prior to the new leadership, headed by CEO and President James “JC” Curleigh, arriving in November of 2018. With regard to the inherited and ongoing legal dynamic with Dean Guitars, Gibson says its team has made attempts to directly communicate to “avoid a prolonged legal battle.”

Said Curleigh, “I am proud of the progress we have made with our attention to quality, with the launch of the new collections, and with our renewed engagement to our Gibson authorized dealer base. At the same time, we acknowledge there are still legacy challenges to solve going forward, especially around brand protection and market solutions.”

On the one hand, it feels somewhat lame to let a company off the hook for filing a lawsuit two weeks ago just because the cease and desists were sent out two years prior to the current CEO's tenure. You're the CEO, dude. Tell the legal team to not file the suit if that's what you think it should do.

All that being said, the words coming out of Curleigh's mouth are the right ones, as are those coming from the Gibson PR team. It's gratifying to watch a company bow to public backlash over an overtly aggressive IP enforcement stance. And hearing the company use language that used to be reserved for the craft beer industry, back before that industry was similarly ravaged by IP enforcement, is encouraging.

He continued, “It is time to make the modern-day shift from confrontation towards collaboration, whilst still protecting our brands, and we are committed to making this happen starting now."

What remains is seeing just how Curleigh's Gibson Guitar wants to balance that equation. If he can shift the culture of the company towards one that is human and awesome, all while giving fans of Gibson guitars what they want, it could be a major win for a company that recently looked quite lost.

Filed Under: competition, counterfeiting, guitars, ip enforcement, james curleigh, trademark
Companies: gibson

Head Of Anti-Counterfeiting Lobbying Group Says He's Going To Make Counterfeit Techdirt T-Shirts

from the does-he-think-he's-making-a-point? dept

Every so often when people find out about the position we tend to take on copying, they hit back with what they think is a "gotcha" of something along the lines of "you wouldn't feel that way if someone copied your stuff." They really do. All the time. There are a number of scraper/spam blogs that copy and repost Techdirt's content, and it's really no big deal. As we've noted for a long time, all of the content that we publish directly we've declared to be in the public domain, so feel free to copy it with some caveats (which we'll discuss below). Last week, we launched our latest T-shirt, the "Copying is Not Theft" shirt: So far there's been a great response to it, but some people seem really upset by the basic message. On Twitter and in our comments, we've had a few people pull out the "Oh, well how will you feel when I copy that shirt!" line of thinking that they'd found some sort of gotcha. The oddest, of all, however, was John Anderson, who apparently runs something called the "Global Anti-Counterfeiting Group" insisting that he's going to counterfeit our shirt. Yes, yes, he's obviously just being snarky and thinking he's making a point, but it still seems odd for someone who insists he's against counterfeiting to basically say he's planning to counterfeit our shirt. At the very least, it actually gives us a platform to make our point: if he really wants to do so, he can absolutely go and make those cheap $5 shirts. But they won't sell. Why? This is the whole point we've been trying to make all this time. The reason people buy shirts from us is because (1) they like the shirts and (2) they want to support Techdirt. Somehow, I get the feeling that the community that John Anderson has built up around his Global Anti-Counterfeiting Group aren't exactly the kind of people who would jump at an offer to buy "Copying is Not Theft" T-shirts, even if they are 25% the price of our T-shirts.

This is the point that so many fail to get when they freak out about people copying. If you've built up a community of people who want to support you and people who like and are interested in what you do, there's nothing to fear from copying. It's only when you don't have that kind of support, or when you're trying to force something on people that they don't want that you suddenly have to worry about copying.

This is why we've always pointed to the same response when people say they're going to copy us and prove that we really are worried about copying or that copying really is theft. It's not. Here's what I wrote nearly a decade ago and it's still stands true today:

We have no problem with people taking our content and reposting it. It's funny how many people come here, like yourself, and assume you've found some "gotcha." You haven't. There already are about 10 sites that copy Techdirt, post for post. Some of them give us credit. Some of them don't. We don't go after any of them.

Here's why:

1. None of those sites get any traffic. By themselves, they offer nothing special.

2. If anything, it doesn't take people long to read those sites and figure out that the content is really from Techdirt. Then they just come here to the original source. So, it tends to help drive more traffic to us. That's cool.

3. As soon as the people realize the other sites are simply copying us, it makes those sites look really, really bad. If you want to risk your reputation like that, go ahead, but it's a big risk.

4. A big part of the value of Techdirt is the community here. You can't just replicate that.

5. Another big part of the value of Techdirt is that we, the writers, engage in the comments. You absolutely cannot fake that on your own site.

So, really, what's the purpose of copying our content in the manner you describe, other than maybe driving a little traffic our way?

So, if you really want to, I'd suggest it's pretty dumb, but go ahead.

This same thing holds true for counterfeiting goods as well. When we launched our first shirt, the Nerd Harder shirt, we saw a few copycats spring up on Teespring, complete with the language claiming that the shirts were from Techdirt, when they were not. We reached out to Teespring telling them we had no problem with them leaving up the T-shirts, but we would appreciate it if they didn't say that supporting them was supporting Techdirt. That's been consistent with our position all along, that in the realm of trademark, the one thing that does make sense is when it's used as a form of consumer protection. If buyers might be confused about who is really endorsing the product, that's a reasonable concern. But someone copying our shirt without pretending it's from us? That's totally cool. In fact, maybe they can make it better.

I mean, it's not like we even came up with the phrase "copying is not theft" either. It's the name of a truly wonderful song that Nina Paley wrote and illustrated: Did we "steal" her song in taking the title and making it a shirt? Hell, no. We made a new thing. We took something that she did and we built on it to offer something new (cool T-shirts) to a different audience (ours), and so far, it seems to be working. If John Anderson thinks he can compete with his audience, he should go for it.

Hell, we'd be happy to compete with anyone doing so, because we know the message resonates with our audience. I'm not so sure it would resonate with the audience of some random person trying (and failing) to prove a point. So, bring it on.

And, yes, we've even made it extra easy for folks like John Anderson. If he likes, we've made the original image available as both a vector SVG file and a high-res PNG. So go ahead, John Anderson from the Global Anti-Counterfeiting Group. Go ahead and counterfeit our shirt. Knock yourself out. I imagine you'll sell somewhere close to zero of them. Though the members of your group may find it odd that the head of a Global Anti-Counterfeiting Group's first response to seeing a T-shirt he doesn't like is to talk about counterfeiting it. Right, John?

Anyway, if you'd like to make a point to John Anderson and the Global Anti-Counterfeiting Group, here's your opportunity. Buy one of our lovely Copying is Not Theft T-shirts.

Filed Under: copying, copying is not theft, counterfeiting, john anderson, t-shirts
Companies: global anti-counterfeiting group, techdirt

IP Enforcement Czar Wants To Hear From You About Government's IP Enforcement Plan

from the speak-up dept

It's that time again. The White House's IP Enforcement Coordinator (IPEC) -- often called the IP Czar -- is asking for public input on the upcoming "Joint Strategic Plan on Intellectual Property Enforcement" that it will be releasing next year. The Joint Strategic Plan comes out every three years and is supposed to guide the federal government in how it handles priorities around intellectual property enforcement. Now, I recognize that the cynical among you will already be insisting that there is no value in responding to this, because the government is going to simply repeat the arguments of the legacy industries and its copyright extremists. However, in the past, these open comment periods have actually helped, and the two previous Joint Strategic Plans have not been as bad as expected. In 2010, we sent in our feedback and was pleasantly surprised that at least some of it was reflected in the plan. It recognized the importance of fair use and encouraging innovation. It also admitted that most studies on the impact of intellectual property on the economy were bogus.

Then, the second report, issued in 2013, was even better and presented a much more balanced understanding of intellectual property law, and how over-enforcement and over-expansion could create real harms as well. It also points out that truly the best way to deal with problems around "piracy" is through greater innovation, rather than relying on enforcement. It doubled down on supporting fair use, and noted that it was working with the Copyright Office to release an "index of major fair use decisions" -- something that finally came out just a few months ago and is actually pretty damn good.

In other words, this report need not just be a playground for Hollywood types looking to ratchet things up.

Still: there are concerns. The first two reports were done by the original IPEC, Victoria Espinel, who left the office a few years ago. This latest report will be overseen by the new IPEC, Danny Marti, who has only been in the job a few months. And, unfortunately, in one of his first speeches, he trotted out pretty much all of the ridiculous and debunked copyright extremist tropes about the need for greater protection, exaggerating the economic impact of intellectual property and demanding more "respect" for intellectual property (rather than earning more respect for it).

It's also somewhat concerning that in his blog post asking for public comments, he cites one of the most debunked statistics around, from the US Chamber of Commerce, concerning the "worldwide market for counterfeit and pirated products," which he argues is $1.8 trillion. Having spent years debunking earlier claims of $200 billion, the idea that it's magically shot up to $1.8 trillion is insane. What's incredible is that the "methodology" for the $1.8 trillion is laughable, and it's a shame that Marti would cite it. The Chamber of Commerce just took the already debunked numbers from 2008 (which, in case you are wondering were actually based on a number someone just made up in the 1980s and which has never been checked) and then "projected" out to 2015. Really. And Marti quotes it as if it has some validity.

And he does this despite the fact that actual credible sources like the Government Accountability Office and the OECD have both insisted that there is no evidence that the issue of counterfeiting is anywhere near as big as the earlier problems stated. Furthermore, multiple studies have further shown that counterfeiting is very rarely a true "economic loss" as it's almost never a substitution good, but rather an aspirational purchase. That is, the person buying the fake Rolex isn't taking any money away from Rolex, because they can't afford to buy a real one. In fact, multiple studies have found that those who buy counterfeit products regularly go on to buy the real product later, when they can afford to. In fact, it appears the purchase of a counterfeit often gives them a closer bond with the brand itself. And, in the end, estimates have suggested that actual counterfeiting is probably somewhere around 2 to 3% of the big numbers thrown around by the Chamber of Commerce.

So, you have to wonder, if Marti is tossing around numbers from one of the world's largest lobbying organizations, the US Chamber of Commerce, rather than from well respected and credible sources like the Government Accountability Office and the OECD, just where he's coming from as he puts together this report.

Hopefully, people can submit thoughtful and well-argued comments based on the details set forth in the Federal Register and help point Marti and the IPEC office in the right direction. Such comments are due by October 16th.

Filed Under: copyright, counterfeiting, danny marti, enforcement, ipec, joint strategic plan, losses, patents, piracy, public comment, trademark

Intellectual Property Maximalist Lobbying Group Proposes A New Trademark SOPA (Plus Girl Scout Badges...)

from the because-of-course-they-would dept

The Intellectual Property Owners Association (IPO) -- which is a sort of "super group" of companies looking to always ratchet up intellectual property laws -- had a brief note on their front page on Monday pushing for bringing back SOPA, but with a promise that it's for trademark law only (the story may disappear from the front page and apparently "archives" are for "members only"):

On September 7 the IPO Board of Directors adopted a resolution supporting in principle legislation to attack online trademark counterfeiting. Such legislation would enable brand owners to file suit against domestic websites selling or offering for sale or distributing counterfeit products, and also as to “foreign counterfeiting websites,” in order to obtain a court order that would require (a) that financial service providers cease processing payment transaction to the defendant(s) and the foreign counterfeiting website, at least in the United States, (b) that internet advertising service providers cease providing such services to the defendants and the foreign counterfeiting website, at least in the United States, and (c) any other injunctive relief the court may determine as appropriate.

The legislation should focus on trademark counterfeiting only; provide for nationwide personal jurisdiction and venue over any foreign counterfeiting website, so long as such is consistent with due process; and permit e-mail service of process to a domestic or foreign counterfeiting website without requiring leave of court based on the e-mail address listed in domain registration for the administrative or ownership contact and to the e-mail address found on the website, if no real or actual address is available for providing notice to the potential defendant.

All of that sounds nearly identical to parts of SOPA -- except the IPO seems to think that if they just focus on the trademark issue, it will be able to sneak it through without a SOPA-like eruption from the public. But the basics here are the same. Allowing companies a private right of action to block out sites (both domestic and foreign) deemed as "counterfeiting websites" is a dangerous plan. Note that, in the past, big brands have regularly declared perfectly legitimate resellers as counterfeiters, and have attacked and sued companies like eBay for not magically stopping people from selling counterfeit goods.

Of course, part of the problem is that these companies regularly exaggerate the issue of "losses" due to trademark infringement and counterfeiting. The numbers are stretched beyond belief. Meanwhile, multiple studies that have looked at the actual size of the problem have found it to be quite small. In fact, multiple studies have found that most people buying counterfeit goods aren't being fooled, but know they're buying counterfeit, but are only doing so because they can't afford the real version. And, the studies have noted, many of the same people later do buy the real version when they can afford it. In other words, counterfeit purchases are often aspirational, rather than acting as a substitute. They're not doing any harm.

And, of course, the real threat here is that if the IPO can sneak this kind of legislation through, it won't be that long until someone tries to slip in some language extending the law to copyrights as well. It'll be slipped in quietly, perhaps with some talk about "harmonizing" different regulations related to trademark and copyright law, hoping that no one notices that basically the original version of SOPA is now the law.

The same IPO notice also talks up its new "Girl Scout" patch, which we had discussed back in March. This was a patch designed by the IPO, but with the support of the US Patent and Trademark Office, so you know it's basically preaching maximalism:

Cookie selling teaches Girl Scouts valuable business practices. Now they have the opportunity to learn a few more in the form of IP. IPO Education Foundation recently partnered with the Girl Scout Council of the Nation’s Capital and the USPTO to develop the IP patch. The IP patch program teaches girls about the value of IP and the process for obtaining different rights. You can help by telling your friends about the patch or volunteering to talk to a troop about what you do. Click here for more information.

It's the same basic story we noted back in March. The plan is all about why intellectual property is valuable -- not taking a balanced view about where it creates more harm than good, and where other alternatives might be better. It's especially troubling that it's focused on girls entering science, technology, engineering and math studies, since those are areas where over-aggressive use of intellectual property have been most damaging, locking up knowledge, rather than increasing the kind of knowledge sharing that drives innovation forward.

Filed Under: counterfeiting, girl scouts, intellectual property, merit badge, private right of action, rogue sites, sopa, trademark

Without Anyone Paying Attention, Canada Is About To Change Its Laws To Support ACTA

from the sneaky,-sneaky dept

Thought ACTA was dead? While the EU Parliament may have strongly rejected it, and even with the EU Commission (who negotiated it) admitting that ACTA is dead, a variety of other countries still did sign on to the agreement. And, now, it appears that with basically no one paying any attention at all, Canada may be about to pass some laws to effectively tie itself to ACTA's ridiculous requirements. The bill was originally introduced back in March, but was never considered by the Canadian Parliament. However, in late October, it was reintroduced under a new code, C-8, and it looks like it's moving forward, despite almost no public discussion of it anywhere.

The whole point of ACTA, and this bill, are to unite two very different issues: counterfeiting and copyright infringement. The legacy copyright players have been trying to conflate these things for years. That's because they can point to the tiny, but very real, problem of counterfeit drugs or safety equipment that can cause serious damage... and then mix it with the very "large" issue of copyright infringement (where they can't show any actual damage or harm) and pretend that it's a big problem which puts tons of people at risk. Of course, none of that is true. Counterfeiting may be an issue, but it's a very small issue, and in the vast, vast majority of cases, with little to no threat of harm. But, the copyright legacy players have figured out that tying their bandwagon to the claim that "counterfeit drugs kill people" may help them to pass draconian copyright laws.

Bizarrely, the Canadian government appears to have bought this bogus argument, despite nearly all of the evidence suggesting it's wrong. Michael Geist made exactly this point to the Canadian Parliament, but nearly everyone else they heard from were industry folks insisting that they needed this new "anti-counterfeiting" bill. And the end result is it appears that the Canadian Parliament is about to move forward on the bill without hearing from anyone other than Geist who might represent the interests of the public at large. As Howard Knopf notes:

What this exercise it will do – and has done – is to allow lobbyists with a maximalist agenda to use this fake problem of fakes to create the potential for interference with legitimate trade in parallel imports, vastly increased criminalization of everyday “infringement”, shifting of enforcement costs from the private sector to the taxpayer, and the interference with the transshipment of generic drugs and other legitimate products. The new law will allow incredible opportunity for abusive or even simply incompetent enforcement. This can be very costly to large and SME business, not to mention consumers. This is perhaps the most sweeping legislation in Canadian IP law in 70 years, and it is being done without adequate hearings, study or the demonstration of any need. Anyone looking for counterfeit products can find them on the street in mid-town and downtown Manhattan. One doesn’t find this kind of flagrant counterfeiting in Canada. The “evidence” of a major problem with counterfeit good that can’t already be dealt with via existing laws almost entirely anecdotal or absent. Piling on of responsibility to border officials is an unnecessary and costly mistake. The DNA and fingerprints of the movie and record industries are all over this bill.

Tragically, there appears to be almost no media coverage of this at all. Basically, it looks like Canadian politicians waited until everyone was looking elsewhere, and then tried to sneak ACTA right through the Parliament. This would be a major win for the movie and recording industries in the US, but a massive loss for Canadians and Canadian innovation.

Filed Under: acta, c-8, canada, copyright, counterfeiting

Google, Microsoft And Other Ad Networks Agree To 'Best Practices' To Stop Ads From Appearing On 'Pirate' Sites

from the the-details-matter dept

This has been rumored for ages, and the White House has certainly been pushing for this almost non-stop for years, but in a similar vein to the ISPs and the RIAA/MPAA coming to a "voluntary agreement" to implement a six strikes policy, the major online ad networks, led by the Internet Advertising Bureau (IAB) along with Google, Microsoft, Yahoo and AOL (and, yes, with the White House) have come to an agreement to stop their ads from appearing on "rogue" sites that are engaged in copyright infringement or selling counterfeit goods via a series of "best practices." The agreement says that the various ad networks who are participating will strive to keep their ads off of sites "that are principally dedicated to selling counterfeit goods or engaging in copyright piracy and have no substantial non-infringing uses."

I have some concerns about this, as I'll discuss below, but on the whole it appears that there's actually some good to come out of this. First off, it's worth noting that all of these guys already have terms of service that bar the use of their ads on sites that primarily engage in such things. While various tech industry haters still tend to believe otherwise, the tech industry has been pretty good at keeping their ads directly away from such sites for years. The ads that tend to get on those sites come from tiny third party ad networks that no one has heard of. In fact, some of the "evidence" against Megaupload was that from very early on, Google kicked it out of its ad program.

Another sign that this agreement probably isn't that bad: the MPAA has already put out a statement about how they hate it, saying that it's not enough. Chris Dodd specifically argues that nothing is going to be enough until everyone else does the copyright holders' job for them, and proactively polices the internet. The fact that no one but the copyright holder can know for certain if something is infringing is not even allowed to enter the discussion in the corrupt minds of the MPAA.

In this case, it appears that this new agreement involves something of a more formalized notice and (possible) takedown system. Copyright holders can submit a complaint to each ad network (individually, not to some central authority), and then the ad network gets to decide how it handles the notice -- but, under the best practices, they will strive to keep their ads from appearing on such sites. Since this is just a voluntary agreement, unlike, say, the DMCA, there's no automatic liability shifting in refusing to pull the ads -- and the agreement makes it clear that the best practices themselves do not establish liability, nor do they create a duty to proactively monitor (though, I could see how copyright holders might later try to raise that issue).

The good thing about this program is that it appears those who worked on it clearly recognize that certain copyright holders may be a little over eager in claiming certain sites are "pirate" sites when they might not be. So the program is designed to be more transparent and to include the clear ability for a site to appeal such a decision and get the ad networks to reconsider. In some ways, this is a step forward from the way it was before, in which Google or others might just kick you out of the program with almost no communication and absolutely no right of appeal. In fact, Google is somewhat infamous for its big white monolithic response to kicking people out of its ad network: basically just telling them "you've violated our terms" with no explanation, no way to find out more, and no way to appeal. Adding an actual appeals process is a step up.

That said, there are still two key concerns here. The first is that even with an appeals process and various safeguards, it's quite likely that legitimate sites that have significant non-infringing purposes will still get caught up in this. We've seen too many false takedowns, false attacks and the like for that not to happen. And even with an appeals process, losing your entire ad network for a period of time can completely sink a small business (and, any site making money on these kinds of ad networks is, by definition, a small business -- because none of these ad networks pay out very much to individual sites).

The second concern is a bigger one: which is that if you look at the history of some of the most important innovations that have helped the content industry grow, they almost always start out as what those content industries deemed "principally dedicated to infringing activity." In the early days of radio, cable TV, VCRs, DVRs, mp3 players, YouTube, etc... they were all attacked as being hotbeds of infringement. Yet, as they grew in popularity, business models developed that helped the content industry tremendously. As I've pointed out in the past, it was only four years after Jack Valenti declared that the VCR was the "Boston Strangler" of the movie business that the home video business surpassed the box office in revenue for Hollywood. Yet, if we allow a system where the copyright holders are able to simply starve these new businesses completely before they've had a chance to develop and mature, I worry that we miss the next VCR, the next DVR, the next mp3 player, the next YouTube -- and whatever tool that comes next that allows content creators to do an even better job connecting with fans, creating new works, distributing new works, promoting those works and eventually monetizing those works.

It's easy to simply try to label all new upstarts as "evil" and kill them off, but history has shown that's generally not a very good idea. The reason those upstarts are successful is not that they enable infringement, but rather that they enable something new and useful that people want and like. The real opportunity is in figuring out ways for content creators to use that to their advantage -- and I fear that programs like this make it easier to simply snuff them out too early.

That said, if there needs to be such a program, this one appears to be the least destructive approach. It doesn't create liability or a proactive duty to police the internet. It allows the networks to make the final call on what do with complaints. It gives the accused sites the ability to appeal whatever decisions are made. Either way, I would imagine that the MPAA and the RIAA already have their incredibly long lists of sites ready and are submitting them everywhere they can... and within a few weeks we'll watch them issue statements about how the new program isn't working and how more needs to be done.

Filed Under: ad networks, appeals process, copyright, copyright infringement, counterfeiting, notice and takedown, piracy, white house
Companies: aol, google, iab, microsoft, mpaa, yahoo