United Airlines uses IP law in bid to squelch “Untied.com” complaint site

News today that United Airlines has filed a lawsuit pressing copyright and trademark claims against “Untied.com”, a United Airlines complaint site run by a Canadian engineering professor named Jeremy Cooperstock. Reports suggest that United got annoyed when Cooperstock re-designed the 15-year-old site to more closely resemble United’s own website (see screen shot, above), using colors and logos that look a lot like United’s. Cooperstock admits that his site looks similar to United’s, but he says that’s necessary because it is a parody and so must reference the real thing. Additionally, Cooperstock insists that nobody would think his gripe site is the real United Airlines site — especially after he recently included a pop-up window asking visitors to acknowledge that they get that it’s not the real airline’s site.

If Cooperstock’s site is indeed a parody of United’s, then he has wide latitude under both copyright and trademark and liability is unlikely. But it’s impossible to tell definitively because Coopersmith’s internet hosting provider has taken down Untied.com, apparently in response to a request from United. This despite United’s claims that is has no intent to have Cooperstock’s complaint site taken down.

Hmmmmm.

UPDATE: Prof. Cooperstock writes to say that Untied.com is back up. (We checked – it is.) The site is a hoot and worth a visit.

The power of performance and brands

Our latest post at The Volokh Conspiracy is about the power of performance and brands to spark innovation. Here’s a taste:

“The power of brands is very apparent in any big drugstore. Walk into a CVS, and you can buy, for $20.99, 300 tablets of Advil brand ibuprofen. That is just under $0.70 per tablet. The CVS private label ibuprofen—which contains exactly the same dosage of the same medicine—costs $17.79 for 750 tablets, or about $0.24 per tablet. The Advil brand ibuprofen, in other words, is almost three times as expensive as the CVS ibuprofen, despite the fact that they are functionally indistinguishable.

As this shows, brands have a strong power over price. And as a result, they wield an unexpected ability to spur innovation. The story of ibuprofen can help explain this relationship. Ibuprofen was invented in the early 1960s by the UK firm Boots, which runs a large chain of drugstores. First patented in 1961, it was introduced in the United States as a prescription drug in 1974. In 1984, the FDA approved ibuprofen for over-the-counter (OTC) sale. That same year, Pfizer reached a license agreement with Boots and introduced OTC ibuprofen under the brand name “Advil.” Boots’s US patent expired in 1986, and soon after other brands of ibuprofen entered the market.

So in all, Pfizer’s Advil brand of ibuprofen had less than two years of market exclusivity in the United States. After those two years, many competitors jumped in. And yet today, almost 25 years after the expiration of the ibuprofen patent, Advil still owns 51% of the market. That’s more than twice the combined share of all generic ibuprofen products, despite the fact that Advil is functionally equivalent to its rivals and quite a bit more expensive.

Why are consumers willing to pay so much for certain brands? There is surprisingly little consensus among researchers about this. Part of the brand premium is surely based on perceived quality differences, and some studies suggest that beliefs about quality may account for perhaps 20% of the difference. But this rationale makes less sense in the case of a basic pain reliever like ibuprofen, where the FDA certifies that the generic drug is as safe and effective as the branded pill. The brand itself seems to have some effect on the willingness of consumers to pay more.

What’s the upshot? Brands can keep prices high and give firms large and resilient market shares. That brands can have such huge effects explains why companies spend so much money promoting them and designing nifty names and symbols. This much is well known. But the power of brands also has important implications for innovation. If an innovator can link her innovation to a successful brand, she can maintain pricing power even after her innovation is copied. This is the key takeaway of the ibuprofen story. The patent on Advil gave only two years of monopoly control. Yet decades later, Advil still dominates the market for ibuprofen. This suggests that whatever the period of exclusivity, if the brand is sufficiently well-established the innovator can continue to profit—substantially—even after the entry of copies, and even if the copies are quite literally identical products. The brand, in effect, can substitute for the protection against copies offered by patent or copyright.

This is a big topic, and exactly how brands do this is poorly understood. Which means we should try to understand it better. Brands serve as handy identifiers that help consumers more efficiently select the product they want when they’re out shopping. But brands also appear to have an important and unappreciated role in sparking innovation.”

Can Emeco prevent Restoration Hardware from knocking off the “Navy Chair”?

The Emeco 1006 chair, also called the “Navy Chair”, is an aluminum chair produced by the Electric Machine and Equipment Company (Emeco) in Hanover, Pennsylvania. The chair, pictured at left, was commissioned in the 1940s by the United States Navy in World War II for use on warships: the contract specified that it had to be able to withstand torpedo blasts to the side of a destroyer.

After the war, Emeco began selling its Navy Chair to the public.  The chair never sold particularly well, but over the years Emeco’s chair carved out a small niche as a piece of high-end (that is, expensive) design of the sort you’ll see featured in Dwell magazine.

Until Restoration Hardware got into the act. Recently the big furniture retailer began selling a Navy look-alike chair (pictured at left), which it (now) refers to as the “standard aluminum side chair”. (It previously referred to it as the “Naval Chair”). The Emeco original is $455.00. The Restoration knockoff is $129. At that price — and given Restoration Hardware’s ubiquity and marketing muscle — the Navy Chair is poised to go mainstream.

Which Emeco is not going to take sitting down.  The company has now filed suit, accusing Restoration Hardware of trademark infringement and counterfeiting. Does the suit have any merit?

Probably not. Emeco probably cannot claim a trademark in the term “Navy Chair”, because that is likely a generic description of this type of all-metal, 1940s-style chair, rather than a name that serves as any indicator of a particular source of the chair in question. (And in any event Restoration Hardware isn’t using the name anymore . . .)

Emeco’s claim for trademark rights in the chair’s design probably fails for similar reasons. The Supreme Court has made clear that firms can claim trademark rights (referred to as “trade dress”) in the design of products only if that design is recognized by consumers as a signal of the product’s source.  So, for example, the sinuous design of a Coca-Cola bottle is protected because people widely recognize a bottle of that shape as signaling “Coke”. Is the design of Emeco’s Navy Chair sufficiently familiar that it indicates source to a substantial number of consumers?  Unlikely.

We’ll see how the case turns out, but it will suffice for now to note that in the world of furniture — as in fashion, food, financial innovations, and the many other industries we cover in The Knockoff Economy — there are a lot of knockoffs, and a lot of them are perfectly legal.  Does the freedom to knock off designs mean that creativity grinds to a halt? Not that we can see.

The Knockoff Economy in Wired

We have a piece in Wired looking at court fights over smartphones (Apple/Samsung) and stilettos (Louboutin/Yves Saint Laurent). You might think these spats have nothing in common. But in fact, both are about a critical frontier in copying and competition: using design to gain control over function – and thereby gain control over markets. (Photo credit: Ariel Zambelich/Wired).

Federal appeals court in NYC says Yves Saint Laurent free to sell red shoes

A federal appeals court in NY has handed down its ruling in the long-running litigation pitting red-soled women’s footwear impresario Christian Louboutin against fashion titan Yves Saint Laurent. Louboutin had sued Saint Laurent, claiming that the YSL’s all-red women’s pumps (see pic at top left) infringed Louboutin’s trademark in women’s shoes bearing red outsoles. The NY court upheld a district court ruling in favor of YSL, albeit on narrower grounds. The court held that although Louboutin’s red sole is distinctive, and functions as a trademark, YSL had not violated it. Why? Because Louboutin’s red sole only functions as a mark on shoes with uppers of a contrasting color (because it’s only against a contrasting upper that you recognize the red sole as a mark), and YSL’s shoes (picture at left) were all red. YSL’s all-red shoe, in the court’s view, did not “use” Louboutin’s mark.  Judgment for YSL.

This seems right. But the NY court left unresolved what will happen if Louboutin sues another company making contrasting-color shoes with red soles.  On the one hand, the court holds that Louboutin’s red soles function as a mark. But that does not settle the issue. The court left open the possibility that the red soles might be “aesthetically functional”.  If they are, they cannot be protected even if consumers do believe that red-soled shoes come from Louboutin. We shall see . . .

ADDENDUM: For a more detailed breakdown of the opinion, see Rebecca Tushnet’s excellent post.

Does this Chinese cabbie love Louis Vuitton? Or hate them?

From a faithful student correspondent (who won’t be named so that Louis Vuitton’s famously aggressive lawyers won’t try to seize his camera), comes this picture taken from the back of a taxi tooling around Xi’an, China.  What you see is a mud-covered “Louis Vuitton” floormat.  Although of course Louis Vuitton, the famed luxury goods manufacturer, would never, never make floormats for cars.

This is obviously a fake. Less obvious is the message it’s meant to send. Is this homage to LV by a cabbie who wants to class up his ride? Or, is this cabbie subverting the creeping capitalist takeover of his country by encouraging his customers to wipe their feet on this symbol of Western decadence and excess?

Hard to tell.  But we’re confident that LV’s lawyers would be furious either way. LV is (in)famous for its rabidly aggressive responses to unauthorized uses of its brand.  A few years back they sued Haute Diggity Dog, a pet products company that markets, among other things, a “Chewy Vuiton” dog chew toy, which was shaped like a woman’s handbag and used a “CV” mark similar to Vuitton’s “LV”. Here it is:

LV lost the case — Haute Diggity Dog’s chew toy, the court held, was a parody of the LV handbag, and Vuitton could not use its trademark rights to suppress Haute Diggity’s First Amendment rights to make a lawful parody.

After that loss you might think Vuitton would re-think their approach. But instead, they doubled down. In February of this year Vuitton threatened to sue the University of Pennsylvania when it found out that students at Penn’s law school were planning an academic conference on trademarks in the fashion industry (sic). Vuitton objected to the parodic use of its mark in this poster advertising the conference:

As you can see, the poster uses the letters “TM” in the shape of Vuitton’s LV. Clever? Yes. Confusing to consumers? Um, no. No one in the market for a Vuitton handbag is going to rock up at an academic conference in Philadelphia, or is even likely to think that Vuitton has anything to do with it. But to the lawyers at LV, who must sleep in their suits, this was an outrage. They fired off a nastygram to the university, ordering them to take the poster down, and chastising the Penn law faculty for not “understand[ing] the basics of intellectual property law.” After consultation with some of the IP faculty at the law school, Penn politely told LV to go fly a kite. Penn’s letter to LV is a masterful piece of cutting understatement.

Why is Vuitton so aggressive? One reason might be that, at least in the past, judges in trademark cases would occasionally hold that a trademark that had not been aggressively enforced was abandoned. But those holdings are increasingly decrepit, and courts in recent years have been much less ready to hold trademarks abandoned because of non-enforcement. So there must be something else going on here. Maybe LV’s lawyers want to be known as the baddest guys on Madison Avenue. Well, if that’s your motivation, when you do file or threaten a lawsuit, it’s important that you win.