JIPEL Vol. 1 – No. 1

Vol. 1 – No. 1 (Winter 2011)

Brand Renegades

Brand Renegades
By Jeremy Sheff* A pdf version of this article may be downloaded here.  


I’m gonna look well smart in me Burberry.[1]
The modern brand[2] is a social phenomenon, not just a commercial one.  As consumers, we use brands as tokens of social differentiation, identification, and expression,[3] and producers covet the commercial advantages that come with the integration of brands into consumers’ sense of identity.[4]  But weaving brands into the social fabric is an unpredictable process, one that cannot be controlled completely by brand owners or by consumers.  The struggle between brand owners and consumers over the social meaning of the brand itself occasionally spills out onto the airwaves and even onto the streets.  Recently, in the space of a single week, we saw two striking examples of this conflict.  In one, the major American fashion retailer Abercrombie & Fitch launched a media offensive to try to assert control over the social implications of reality television star Mike “The Situation” Sorrentino’s prominent consumption of its products on MTV’s Jersey Shore.[5]   Meanwhile, across the Atlantic, managers of global brands like Adidas, Nike, and Levi’s struggled to contain the fallout from their brands being associated with the worst civil unrest Britain has seen in ages.[6] In at least one of these episodes, there has been some suggestion that the brand owners might take some sort of legal action to protect the value of their brands.[7]  This suggestion raises a relatively novel question of law.  Even though social meaning can be one of the primary sources of a modern brand’s value, and the preservation of that value depends on the rights afforded under trademark and unfair competition law, that body of law lacks a coherent framework to deal with conflicts that arise between consumers and producers over brands’ social meanings.  This Article explores one typical point of potential producer-consumer conflict suggested by the examples of the previous paragraph—what I call the “brand renegade.” I define a brand renegade as a consumer who uses branded products out of affiliation with some aspects of the image cultivated by the brand owner, but whose conspicuous consumption of the brand generates social meanings that are inconsistent with that image.[8]  Part I of this Article reviews the theoretical literature on the economics and psychology of trademarks to identify the origins of the brand renegade.  Part II describes some recent examples of brand renegades in action, as well as the responses of brand owners to those brand renegades, pointing the way toward a legal showdown between the two groups.  Part III turns to the availability of legal doctrines to mediate the conflict between brand owners and brand renegades, and finds them surprisingly thin.  In the end, I argue that socially expressive consumption (and portrayals of that consumption) ought to be permissible as a matter of trademark law, but note that it is not clear that we have the doctrinal architecture to enforce this (hopefully uncontroversial) principle.

I. Whence the Renegade?

We can envision more than one model by which a brand can come to have social significance.  Perhaps the simplest model is one in which the brand owner works to establish an image through its marketing activities—advertisements, paid endorsements, product placements, etc.—and consumers individually decide whether to identify with that image (by buying the branded product) or not.  This model is consistent with the dominant theoretical model of trademark law—what I have referred to elsewhere as the “search-costs model.”[9]  Under this model, producers are thought to use trademarks to convey information about the unobservable qualities of their products—the flavor of a soda; the reliability of a car—to buyers who would otherwise be unable to find that information on their own.  By this mechanism, trademarks provide the basis for both consumer choice and producer competition, building goodwill in the process.[10] Of course, this model is essentially useless in describing a great deal of actual observed behavior surrounding consumer brands.  If all consumers cared about were the images generated by the brand owner for adoption or rejection by an atomized consuming public, the fact that a rioting “chav”[11] or a boorish braggart were known to consume the brand would be irrelevant.  But clearly, brand owners care quite a bit about that type of information,[12] most likely in the belief that consumers do as well. This suggests that there is some other type of brand information that consumers and brand owners find important, and that this information relates to the interaction between brands and the people who consume them.  Brand owners could certainly try to generate such information.[13] Indeed, much modern marketing, including the widespread use of celebrity endorsements, is directed at persuading consumers to associate particular personality traits with a brand[14]—the Gerber Baby;[15] the Marlboro Man;[16] the Avon Lady;[17] the Pepsi Generation.[18]  To the extent that such subjective associations are just one more example of brand owners creating and disseminating information to consumers, who passively receive it and react to it solely through their atomized purchasing decisions, they might conceivably be integrated into the search-costs model discussed above—as indeed they have been.[19] The problem is that these personality-based associations—because they do not refer back to anything more substantial than the shifting minds of consumers—behave differently than other types of product information, which refer back to the material qualities of a product.  In particular, personality-based associations are freighted with vital but unstable social meaning.  As consumer psychologists have shown, consumers themselves play an integral role in constructing the social meanings of the brands they consume, not least by forming, expressing and observing one another’s social identities and allegiances through acts of conspicuous consumption:
When brand associations are used to construct the self or to communicate the self-concept to others, a connection is formed with the brand. . . . [A]ssociations about reference groups become associated with brands those groups are perceived to use, and vice versa.  The set of associations can then be linked to consumers’ mental representations of self as they select brands with meanings congruent with an aspect of their current self-concept or possible self, thus forging a connection between the consumer and the brand.[20]
Importantly, however, the power of consumers to contribute to and draw on brands’ social meanings is limited by the instability of those meanings in a fluid and competitive social landscape.  As Professor Barton Beebe explains, “commodified forms of distinction . . . produce in the fashion innovator or adopter a feeling of ‘significant difference,’ of being something other than a mere copy in a mass world of equivalence”;[21] but this feeling is inevitably temporary, as “copying both destroys the distinctiveness of existing fashions and creates the need for new ones.”[22] These features of consumer psychology demand a more dynamic model of the construction of a brand’s social meaning than trademark law currently has.  In particular, they require us to come to terms with a significant amount of back-and-forth between and among brand owners, consumers, and the social audience.  From the brand owner’s perspective, the participatory, decentralized, and non-hierarchical nature of the construction of a brand’s social meaning is a double-edged sword.  On the upside, it allows brand owners to capture a significant amount of value that is created not by the brand owner itself, but by its customers.  On the downside, it creates the risk that brand value could be destroyed by forces beyond the brand owners’ control.  Chief among these forces is the brand renegade.[23]

II. The Renegade in Our Midst

The history of mass marketed brands is rife with examples of brand renegades, but reveals some diversity in brand owners’ responses.  This Part considers some illustrative examples.

A.  Adoption and Co-Option

Consider the cognac market.  For decades, the House of Courvoisier marketed its product as “the brandy of Napoleon,”[24] cultivating associations with European aristocracy (and its wealth and power) through full-page ads in upper-middle-class aspirational magazines like Fortune and Gourmet.[25]  But as American society changed, those associations began to lose their appeal in the spirit’s target market.  By the late 1990s, “you almost couldn’t give France’s most famous brandy away”; cognac in general was seen “as an old fart’s drink, a digestif for tuxedoed geezers smoking cigars in wood-paneled libraries.”[26] But a counter-trend was already underway.  Over the course of the 1990s, cognac had become a fixture in African-American nightlife, and its rise was reflected in hip-hop culture.  As early as 1993, West Coast rapper Ice Cube identified the gangsta rap aesthetic with, among other things, “sippin on Courvoisier.”[27]  By 2002, hip hop had moved from counterculture to mainstream,[28] and Busta Rhymes’s single, “Pass the Courvoisier,”[29] peaked at number 11 on the Billboard Hot 100 charts.[30]  While the old-world image of imperial power and opulence no longer had the same pull for the traditional upwardly mobile (and traditionally white) elite of the American economy, the idioms of material luxury had been appropriated by a formerly marginalized, but now culturally ascendant, segment of that economy.  Importantly, hip hop did not adopt the trappings of Courvoisier’s marketing images even as it adopted the brand as an element of its identity.  Rather than affecting a First Empire salon, Ice Cube situated Courvoisier in the driver’s seat of a two-tone Ford Explorer tearing down the 110 Freeway;[31] Busta Rhymes in a prohibition-era Harlem back alley.[32] While the Napoleonic imagery of Courvoisier’s marketing efforts shares some thematic points with hip hop’s invocations of the brand (among them ostentatious wealth, violence, and misogyny), there are obviously deep cultural differences between the two.  Courvoisier’s expanding young, urban, African-American clientele were, in this sense, brand renegades: they adopted the brand itself as an element of their identity, but did not otherwise change their identity to conform to the brand’s existing marketing strategy.  And given the social dynamic described above,[33] the conspicuous consumption of the brand by these renegades could not help but reflect back on the social meaning of the brand itself.[34] The House of Courvoisier’s response to the reshaping of its brand by forces beyond its control was highly adaptive.  Rather than dispute or resist the changes in their brand’s social meaning, the brand owner co-opted the changes its customers had wrought.  As early as 2000, its marketers had pivoted their messaging to appeal to a new demographic: “young, urban adults who subscribe to hip-hop culture, the vast majority of whom are African-American.”[35]  When Busta Rhymes released his single, Courvoisier’s marketers were already on the scene, “skillfully tr[ying] to capitalize on the event, in sponsoring events with P Diddy, Missy Elliott and Lil’ Kim, in particular.”[36]  By 2007, Courvoisier was touting its product as the brandy of hip-hop mogul Jermaine “JD” Dupri—Napoleon was conspicuously absent from the campaign the company launched that year.[37]  In short, rather than viewing its brand renegades as a threat, Courvoisier welcomed them as an opportunity. As a business matter, Courvoisier’s response to its brand renegades makes perfect sense.  The release of “Pass the Courvoisier” coincided with an 18.9% rise in Courvoisier’s sales,[38] and the adoption of the brand by a new generation of drinkers saved it from a decades-long decline.[39]  Indeed, it is possible that any other course of action might have threatened to damage Courvoisier’s business—as the makers of Cristal champagne learned when they failed to give rapper Jay-Z the respect to which he felt entitled as a successful and influential brand renegade.[40]   Courvoisier was thus in the fortunate position of capturing the positive value of social meanings it did not create by virtue of those meanings becoming associated with its brand through the actions of brand renegades.  But more difficult questions arise when the effect of brand renegades on a brand owner’s bottom line is not so unambiguously positive.  The rest of this Part illustrates these difficulties.

B.  Reality Bites

As the row between Jay-Z and the makers of Cristal shows, brand owners who invest in cultivating a certain image may not always be grateful to brand renegades who change that image.  This ingratitude strikes us as foolish in the hip-hop context, where the adoption of niche luxury brands by a large but marginalized demographic broadly expands those brands’ commercial appeal (and thus their profitability).  But such ingratitude may be entirely understandable where the customers attracted to the social meanings created by a brand renegade may be offset or even overwhelmed by customers who are loyal to the brand’s preexisting image and who find its new meanings repellent.[41] Take the example of MTV’s Jersey Shore.  The reality series is a ratings bonanza for MTV parent Viacom and a bona fide cultural phenomenon.[42]  It is also deeply offensive to a substantial and vocal population.  The arbiters of culture find its cast members—such as the aforementioned “The Situation”[43] and Nicole “Snooki” Polizzi—to be the personification of bad taste and bad character.[44]  And understandably, many people do not want to be associated with such characters.[45]  There are, accordingly, a fair number of brands that do not want to be associated with the cast of Jersey Shore either, and those brands’ owners will go to some lengths to avoid any such association.  For example, in an episode I have discussed elsewhere,[46] it was rumored that some fashion houses were gifting their competitors’ high-priced handbags to Snooki in the hopes that her déclassée image would rub off on those competitors, to the gift-giver’s benefit.[47] To be sure, an association with Snooki—to whom the New York Times once attributed the epithets “[f]lake, cow, loser, slut, idiot, airhead, trash, penguin, creep, moron, midget, freak, Oompa-Loompa, nobody”[48]—is probably not something most customers of most luxury fashion brands want.  But there is a huge population of young people who find her irresistible, even admirable.[49]  The same can be said for The Situation.[50]  As New York Magazine put it, “Jersey Shore . . . made him famous enough to make money off a branded creatine shake.”[51]  And in a recent, highly publicized incident, he stepped into the role of brand renegade. In August of 2011, a retail analyst noted that a recent episode of Jersey Shore had shown The Situation “wearing a pair of neon green A[bercrombie] & F[itch] sweatpants ‘loudly (and proudly)’ on the streets of Florence.”[52]  Abercrombie & Fitch’s “Brand Senses Department” responded swiftly with a press release proposing what it called “a Win-Win Situation.”[53]  The release protested that association with Jersey Shore “is contrary to the aspirational nature of our brand, and may be distressing to many of our fans.”[54]  Accordingly, Abercrombie & Fitch made it known, the company had offered to pay The Situation (and other members of the Jersey Shore cast) not to wear its clothes.[55] This was a bit rich.  As the press reported, Abercrombie & Fitch is “no stranger to controversy, with its racy marketing campaigns featuring nearly naked models.”[56]  As The Situation himself had noted some time before, one of Abercrombie & Fitch’s more popular t-shirts is emblazoned with the word “Fitchuation.”[57]  Even while dutifully reporting the release, major media outlets recognized they were the instruments of a publicity stunt that was curiously timed to coincide with a quarterly earnings call and the announcement of a major expansion.[58] Abercrombie & Fitch did not appear to be seriously distancing themselves from the brand renegade, but at the same time they were not trying to co-opt him, as in the Courvoisier example above.  Rather, the company seemed to be trying to leverage him.  Clearly, Abercrombie & Fitch wanted the public to know two facts about The Situation: first, that he wears the company’s clothes, and second, that the company is not comfortable with him wearing its clothes.  The first message is designed for fans of Jersey Shore; the second, for their bill-paying parents (and the show’s detractors more generally).  If successful, this stunt may succeed in capturing the upside value of The Situation’s social connotations without suffering their downside—a “Win-Win Situation” indeed. Still, this is a dangerous high-wire act for a brand owner to play when faced with a brand renegade.  Even a rumor or hint that the brand owner is trying to distance itself from the social identities of its customers can be commercially devastating.[59]  As the Recording Industry Association of America discovered at great cost, a business strategy that depends on publicly attacking your customer base is likely to be counterproductive.[60]  Still, a constant threat hovers over the brand owner who tries to court the brand renegade without alienating the brand loyalists.  At some point, one of these constituencies may put the brand owner to a choice.

C.  Cutting Loose

On the evening of August 4, 2011, 29-year-old Mark Duggan was shot dead by police in the north London neighborhood of Tottenham.[61]  On August 6, what started as a peaceful protest over the shooting erupted into a violent anti-police riot.[62]  Over the following days, rioting spread throughout London and Britain more generally, evolving into an expression of an undifferentiated amalgam of social, political, and economic discontentment; the conditions of public disorder set the stage for a wave of nihilistic and opportunistic violence and looting.[63]  Young people in particular seemed to see the riots as an opportunity to assert their independence from political, legal, and economic authority; as two young women interviewed by the BBC explained:
It’s the government’s fault . . . . Conservatives . . . whatever, who it is . . . . [T]hat’s what it’s all about, showing the police we can do what we want, and now we have . . . . We’re just showing the rich people we can do what we want.[64]
One thing they wanted was fashion brands.  The press reported that looters of some clothing stores were seen trying things on before they stole them.[65]  One of the most riveting images of the rioting appeared on the front page of the August 9 issue of The Guardian: a masked young man, backlit by the carcass of a burning car, decked head-to-toe in an immaculate Adidas hoodie tracksuit (with the shoes to match).[66]  As looting became widespread, the media began to report that certain brands that had cultivated an image of confrontational, rebellious youth in their marketing—brands like Adidas, Nike, and Levi’s—were particularly targeted by the young rioters for theft.[67]  The implication was that these brands had been playing with fire by glorifying resistance to authority and associating it with their unattainably high-priced goods, and that they accordingly deserved some share of the blame for the destructive actions of their disaffected young customer base.[68]  Whether this was a fair characterization of the rioters’ actions and motives or not,[69] public association with the lawless mayhem on Britain’s High Streets took a toll on several brands,[70] and their marketers went into “lockdown mode” to determine how best to respond to the crisis.[71]  A generation of brand renegades had become a national story. Adidas drew attention in this story not for any specific aspect of its marketing campaign (except perhaps its choice of hip hop artists with criminal records as paid promoters),[72] but rather because so many rioters were conspicuously wearing (and stealing) Adidas-branded clothing.[73]  Like The Situation and the various hip hop artists described above, these looters had become brand renegades—due to their actions the public could not help but associate the Adidas brand with the lawless mobs in the streets.  Adidas responded vigorously against this threat to its brand image, and “took the step of condemning its customers for taking part in the riots[:] ‘Adidas condemns any antisocial or illegal activity,’ the company said. ‘Our brand has a proud sporting heritage and such behaviour goes against everything we stand for.’”[74] Levi’s, in contrast, drew particular attention for a global marketing campaign it had unluckily launched just before the riots erupted.  The flagship television ad for the campaign, entitled “Go Forth,” is a video montage of passionate and rebellious young people set against a reading of Charles Bukowski’s poem, The Laughing Heart.[75]   In one vignette, a young man stands alone in the middle of a ransacked urban square, taunting a phalanx of riot police in view of cowering onlookers, while the narrator passes over Bukowski’s line: “you are marvelous.”[76]  The media seized on the ad,[77] and Levi’s backpedaled as hard as it could without explicitly disavowing the imagery it had used.[78] It postponed its planned release of the “Go Forth” ad in British cinemas and on Facebook, but continued to make it available on YouTube and on the campaign website.[79]  Unlike Adidas, Levi’s resorted to vague generalities and the passive voice in an attempt to put some distance between its brand image and the rioters without explicitly criticizing its young customer base:
We are deeply disheartened about the unprecedented events taking place in the UK at the moment and which have impacted communities across the country. While Go Forth is about embodying the energy and events of our time, it is not about any specific movement or political theme; rather, it’s about optimism, positive action and a pioneering spirit. Out of sensitivity for what is happening in the UK, we have temporarily postponed our cinema and Facebook spots in the country.[80]
Between the responses of Levi’s and Adidas to the UK Riots lies the limit of the win-win strategy’s effectiveness against the brand renegade.  Levi’s seemed to think it could placate the brand renegades’ social critics without alienating the renegades themselves—precisely the strategy pursued by Abercrombie & Fitch.  It attempted to do so by highlighting what its cultivated image and its brand renegades (in this case, rioters conspicuously looting Levi’s goods) have in common, while ignoring what makes those brand renegades different (and threatening to others).  Adidas clearly concluded that it could not strike this balance, and abandoned the brand renegades in favor of the rest of its customer base.  Rather than focusing on what its brand renegades have in common with Adidas’s cultivated image, the company focused on what makes the brand renegades different, and explicitly attacked it. The judgments behind these decisions are both commercial and social.  They test the margins of profit and persuasion in the tradeoff between brand renegades and brand loyalists, all against the backdrop of a wider social audience.  Adidas, alone out of all the brand owners discussed in this Part, seems to have found itself on the wrong side of those margins.  As we approach this limit of the brand owner’s tolerance for the brand renegade, we come to the question that began this Article[81]: is there any role for law in mediating the conflict between them?

III. The Legal Limits of Social Brands

The law of trademarks and unfair competition is at its most lucid when it purports to regulate competition along commercial dimensions.  The most clear-cut applications of trademark law deal with conflicts that arise between competing producers regarding identification of the source of goods offered for sale to the public.  When a consumer thinks she is buying a quality widget from Producer A, but in fact she is getting a shoddy widget from Producer B, both the consumer and Producer A have cause to complain, and the law has long given each of them a remedy without generating significant controversy.[82]  The difficulty arises when the law tries to reach past these types of source-confusion conflicts.

A.  Trademark Law’s Expansion

Trademark law’s relentless expansion is the overarching story of the past century of development in the field.[83]  Whereas once the maker of BORDEN ice cream couldn’t recover against a company selling BORDEN condensed milk,[84] such rigid limits on the market scope of trademark rights began to erode in the early part of the twentieth century.[85]  As consumer markets expanded beyond local and regional boundaries, strict geographic limits on the scope of trademark rights eroded.[86]  And as the law’s treatment of trademark licensing went from overtly hostile[87] to broadly accommodative,[88] courts came to condemn not only commercial practices that led to consumer confusion as to source, but those which might lead consumers to mistakenly believe that a defendant is affiliated with, or sponsored by, a trademark owner.[89]  This shift, combined with the rise of product placement and embedded advertising in popular entertainment,[90] brought the producers of expressive works and cultural products into trademark law’s ambit.[91]  Finally, in 1995, Congress severed the link between competition and trademark liability for “famous” trademarks entirely, by creating a cause of action—dilution—that is explicitly available “regardless of the presence or absence of . . . competition between the owner of the famous mark and other parties.”[92] Importantly, the expansion of liability to encompass sponsorship and affiliation confusion generates its own momentum, in what Professor James Gibson has referred to as a “feedback loop.” [93]  Uncertainty about the limits of trademark rights leads risk-averse commercial actors to submit to trademark owners’ claims (e.g., by taking a license or removing references to the mark) rather than contest them.  The observable results of this behavior then inform consumers’ perceptions as to the prevalence of sponsorship or affiliation relationships in the marketplace.  This changed understanding of consumers, in turn, expands the universe of conduct which could generate confusion as to affiliation or sponsorship.[94]  The result is that trademark liability’s boundary is never clear, and yet clearly always expanding.

B.  The Brand Renegade at the Outer Limit

The brand renegade represents the final frontier of trademark law’s expansion.  The self-generated momentum of that expansion is surely accelerated by brand owners’ decisions to co-opt (or at least try to leverage) brand renegades.  Over time, observers may come to presume that each new brand renegade is actually affiliated with the brand owner—indeed, this already appears to have happened in the hip-hop context.[95]  As subtle, informal, and post hoc cross-promotional relationships become increasingly common in the entertainment industry,[96] and as user-generated content is increasingly incentivized by marketers themselves,[97] the line between independent consumer and sponsored affiliate is already frustratingly difficult to draw.[98]  Finally, as marketers begin to turn to the same social networking tools[99] and participatory demonstrations that have recently become a hallmark of organized civil unrest,[100] it may be only a matter of time until a significant number of consumers genuinely come to believe (perhaps with good reason) that the latest riot tearing through their communities enjoys corporate sponsorship.[101] Despite these trends, our intuition is that there must be some limit to the power of brand owners to control perceptions of their brands, particularly where those perceptions are based on our observations of actual consumers.  As Professor Rebecca Tushnet notes, “[t]here is nothing (as yet) that Coca-Cola can do to erase my memory of the time I spilled a Diet Coke into my keyboard,”[102] and it would strike us as absurd (I hope) to suggest that Coca-Cola might sue Professor Tushnet for having created such a negative association with its brand in her own mind (or, having read her article, in ours).  Similarly, I suspect most people would find it implausible that a consumer could be assessed damages for wearing Adidas to a riot,[103] that a reality television star could be enjoined from walking down the street wearing a pair of neon green Abercrombie & Fitch pants,[104]  or that a rapper could be sued for ordering Courvoisier at a nightclub.[105]  Our intuition is that there must be some intelligible limit on the legal weapons the brand owner can deploy against the brand renegade.  But where in the law are these limits to be found? We might try to satisfy our intuition by setting certain categories of conduct outside trademark law’s reach.  For example, one could argue that consumption of a brand owner’s products, and perhaps the portrayal of that consumption in expressive works, are categories of conduct that should be outside the bounds of trademark liability.  But it is not at all clear that this is the case under current law.   Portrayals of brands in expressive works are not, as a category of conduct, beyond trademark law’s reach.[106]  And there is no doctrine that one can definitively point to in hopes of placing consumption, as a category of conduct, entirely outside of the reach of infringement liability—indeed, there is anecdotal evidence that brand owners are moving to regulate consumption directly.[107]  Moreover, consideration of doctrines that might be invoked to impose such conduct-based limits on trademark liability only serve to demonstrate the absence of such limits. Take, for example, the doctrine of “trademark use” or “use as a mark.”  For approximately a decade, scholars and judges debated whether “trademark use” is an element of a trademark infringement or dilution claim, and if so what trademark use means and how it might be established.[108]  After the spilling of much ink, we appear to have an answer: there is no trademark use requirement at all for infringement claims,[109] but “use as a mark” is a necessary element of dilution claims.[110]  The plaintiff’s burden on this element of its dilution claim is simply to show that the defendant’s use involves some goods or services other than those of the plaintiff.[111]  This limitation on dilution claims would indeed seem to shield the brand renegade in his capacity as consumer from blurring or tarnishment liability.  But it would not shield the producers of expressive works that portray the brand renegade’s consumption, nor would it necessarily shield the brand renegade who consumes in the process of rendering entertainment services—a reality television star on a shoot, for example, or a rapper appearing at a promotional event.  And of course, both the brand renegade and the producer of expressive works portraying his consumption would find no refuge from infringement (as opposed to dilution) liability in the trademark use doctrine.[112] As another potential doctrinal tool to limit brand renegades’ liability, consider the related but distinct requirement of use in commerce.  By both constitutional[113] and statutory command,[114] federal trademark liability may only attach to conduct that constitutes a use of a mark “in commerce”—specifically, in interstate or foreign commerce.  But only minimal reflection is required to conclude that this limitation on the reach of trademark liability offers no shelter to the brand renegade.  With respect to expressive works that are themselves released into the stream of commerce, a plaintiff would have no trouble satisfying this requirement.[115]  And as every law student learns, the scope of “commerce” subject to regulation by Congress is exceedingly broad.  It is no great leap from the proposition that a farmer can be restrained in growing wheat for his own consumption due to the effect of his self-sufficiency on the economy-wide demand for wheat,[116] to the proposition that a consumer can be restrained from consuming branded products due to the effect on the economy-wide market for that brand.  This is particularly true where there is a thriving market for brand affiliation, in which brand owners compensate consumers for their conspicuous consumption of and advocacy for the brands they enjoy.[117]  In short, the use in commerce requirement is perhaps even less useful than the trademark use requirement in satisfying our intuition against holding brand renegades liable to brand owners. In light of these shortcomings of established doctrine in satisfying our intuitive policy inclinations, some commentators have proposed novel, alternative limits on the reach of trademark liability.  Professors Mark Lemley and Mark McKenna, for example, suggest that liability for sponsorship and affiliation confusion might usefully be restrained by investigating whether the confusion at issue in any given case is likely to materially affect consumers’ purchasing decisions, arguing that any other form of confusion is irrelevant to trademark law’s policy objectives.[118]  While the concept of materiality that Professors Lemley and McKenna borrow from false advertising law[119] is a useful criterion for restraining the expansiveness of sponsorship and affiliation confusion liability in general, on reflection it does not seem to do much work in the narrow case of the brand renegade.  Professors Lemley and McKenna argue, convincingly, that brand owners are unlikely to suffer any lost sales from most forms of sponsorship or affiliation confusion, making materiality a useful policy lever.[120]  But clearly, and particularly for brands that trade on social meaning, brand renegades do affect purchasing decisions, at least in some circumstances.[121]

C.  Drawing a Line

I propose that the intuition against imposing liability on brand renegades is better served by a principle that has historically served to limit trademark rights: freedom of expression.  Professors Lemley and McKenna cite this principle as one justification for their materiality proposal,[122] but with respect to brand renegades, it is likely the entire issue.  At stake in the conflicts described in Part II of this Article is the balance between the expressive interests of brand owners and the expressive interests of brand renegades with respect to the social meanings of the brands in which they each claim a stake.  The ultimate question is: will the law give either of these parties any preference in constructing those meanings? Professor Thomas McCarthy, the author of the leading American treatise on trademark law, has advanced the argument that a trademark owner has a First Amendment interest in not being associated with controversial persons (such as brand renegades) and the negative social response to them.[123]  Notably, though, Professor McCarthy’s argument on this point claims exactly zero support from the trademark caselaw.  In contrast, First Amendment concerns are reflected in numerous trademark law doctrines under which courts have shielded persons other than the brand owner from liability: the protection of criticism[124] and parody;[125] the cabining of infringement claims against the titles[126] or contents[127] of expressive works; the doctrines of descriptive fair use[128] and nominative fair use;[129] and the statutory limits on dilution claims,[130] to name just a few.  In general, these doctrines recognize that overbroad assertions of trademark rights can inhibit the expression of ideas that either promote competition (in the case of fair use) or provide socially useful information regarding trademarks and their owners (in the case of defenses for parody and criticism).  To avoid such chilling effects, the law limits the control mark owners may assert over the uses others make of their marks.[131] In many—if not most—of these doctrines courts tend to suggest that the First Amendment interest may be vindicated only where (or even because) there is as a factual matter no consumer confusion of which the brand owner might complain.[132]  But it must be admitted that this is unlikely to be true for brand renegades.  As discussed above, brand renegades by definition affiliate themselves with some aspects of the brand, and as brand owners continue to co-opt and leverage brand renegades, consumers are increasingly likely to be confused as to whether the affiliation runs both ways.  Merely protecting brand renegades who do not confuse as to affiliation or sponsorship is unlikely to avoid trademark infringement liability in the modern marketing environment.  The principle of freedom of expression must trump the concern over confusion for us to conclude that the conduct of brand renegades is not actionable. One doctrine reflects precisely such a prioritization of interests, and it is directly applicable to one of the categories of conduct that is the subject of our intuition against the imposition of liability.  This is the strict test for infringement applied to expressive works.[133]  Under Rogers v. Grimaldi[134] and its progeny,[135] such works will infringe a trademark only where their use of the mark has “no artistic relevance” to the underlying work.  Characterized as an exercise in “balance,”[136] this standard explicitly accepts some degree of confusion in order to avoid chilling expression.[137]  Application of Rogers would almost certainly protect a rapper in his lyrics and a reality television producer in its broadcast, while analogous constitutional privileges of the press would surely protect a newspaper in its coverage of a riot.[138]  While the caselaw interpreting the federal dilution statute is more limited, it suggests a similar result in dilution actions.[139]  Nevertheless, it is not clear that the subjects of these expressive works—the consumer brand renegades themselves—would enjoy similar protection.  Indeed, if Professor McCarthy’s view is correct, there might be some justification for imposing liability against consumers who create such associations. Thus we come, finally, to the ultimate question: whether the brand renegade, who alters a brand’s social meaning by the mere act of conspicuously consuming it, is within the reach of trademark liability.  If our intuition is that the answer to this question must be no,[140] I submit that this intuition can be justified only by recognizing through law what consumer psychologists have concluded through research:[141] that for brand renegades as for the rest of us, consumption itself has an expressive character.[142]  If the reason for tolerating confusion with respect to the expressive works described in the last paragraph is that there is social value in the expression inherent in portrayals of a brand renegade’s consumption, it follows that the ultimate source of that value is the consumptive act itself—passing the Courvoisier, donning Abercrombie & Fitch pants, or wearing Adidas on a looting spree.  As discussed in the first Part of this Article, we engage in such consumption in no small part to forge our social identities, to communicate those identities to others, and to modify our identities in response to similar communications we receive through others’ consumption.[143]  Where that consumption relates to branded goods, the brand itself becomes in at least some measure the subject of a social, not just a commercial, discourse. The possibility of socially expressive consumption is not novel—quite the opposite.[144]  But it is a possibility that American trademark law has yet to fully grapple with—perhaps because the expansion of liability under that body of law is only now reaching the point where consumption itself is implicated.  Where the law and commentary have recognized First Amendment interests, it has generally been with respect to either talking about (and perhaps critiquing) a brand’s cultivated associations, or directly invoking those associations as a kind of shorthand vocabulary.[145]  The brand renegade forces us to recognize a new category of expression—one which both appropriates some aspects of a brand’s meaning and alters that meaning by giving it new social context.  We must recognize that consuming a brand can in itself be a form of commentary on and critique of the social meanings inherent in that brand—particularly where the brand owner explicitly trades on those meanings by cultivating personality associations in its marketing. As brand renegades continue to engage in this form of expression, and brand owners increasingly conflict with them, we are sure to be called on to integrate that conflict into the uneasy legal balance between the ever-expanding sphere of trademark liability and our First Amendment principles.  I submit that in this narrow context, the balance is a relatively easy one to strike.  Professor McCarthy argues that brand owners should be permitted to contribute to a brand’s social meanings, but that nobody else should (at least not without the brand owner’s approval).  He argues, in short, for judicially enforced viewpoint-based restrictions on expression.  In contrast, the intuition against liability that has been the subject of the investigation in this Part demands no such discrimination; it merely demands that the law treat the brand owner and the brand renegade on equal footing with respect to their contributions to the social meaning of a brand.  As between these two alternatives, the intuition investigated in this Part fares far better under the First Amendment than Professor McCarthy’s alternative.[146]  Doctrinally, I propose that the best vehicle for the intuition I have attempted to vindicate in this Part is to extend the balance struck by Rogers and its progeny (and the analogous dilution authorities)[147] from the case of expressive works to the case of expressive consumption.  Absent an explicit claim by the brand renegade that the brand owner approves of his conduct,[148] the expressive dimension of his consumption deserves protection from trademark liability.


In this Article, I have argued that conspicuous consumption of brands whose owners have cultivated particular social connotations is, in itself, an expressive act.  This act cannot help but contribute to the social meanings of the brand itself, and as brand owners increasingly try to actively manage such associations, public confusion as to affiliation or sponsorship may result.  Where the consumption is performed by a brand renegade—someone who identifies with some aspects of the brand’s cultivated image but who also generates social meanings inconsistent with that image—we face a conflict for control between the brand renegade and the brand owner.  My argument in this Article—as elsewhere[149]—is that in this struggle to control social meaning, which implicates not only the identity of the brand but the identity of members of a community, both parties ought to be equally free to make their case, and the social audience should be free to decide between them.[150]  
* Associate Professor of Law, St. John’s University School of Law. Thanks to Professors Laura Heymann, Peggy McGuinness, Mark McKenna, and Zahr Said, and to participants at the Inaugural Academic Conference of the Franklin Pierce Center for Intellectual Property at the University of New Hampshire School of Law for helpful comments.
[1] KingLouisXVII, Chavs in Me Burberry, YOUTUBE (Sept. 16, 2007), http://youtu.be/2WDnukuUc84.  Cf. generally Daniel Gross, To Chav and Chav Not, SLATE (July 12, 2006),http://www.slate.com/id/2145165/.
[2] For purposes of this Article, I am defining a “brand” as the conjunction of a trademark, the marketing efforts behind that trademark, and the set of associations that the public as a whole has come to attach to that trademark.  Cf. 15 U.S.C. §1127 (2010) (“The term ‘trademark’ includes any word, name, symbol, or device, or any combination thereof . . . used by a person . . . to identify and distinguish his or her goods . . . from those manufactured or sold by others and to indicate the source of the goods . . . .”); Lisa Wood, Brands and Brand Equity: Definition and Management, 38 MGMT. DECISION 662, 664-65 (2000), available at http://dx.doi.org/10.1108/00251740010379100 (discussing various extant definitions of the term “brand” in the marketing literature, including one that defines a brand as “nothing more or less than the sum of all the mental connections people have around it”).
[3] See, e.g., Barton Beebe, Intellectual Property Law and the Sumptuary Code, 123 HARV. L. REV. 809, 852 (2010), available at http://www.harvardlawreview.org/issues/123/february10/Article_6838.php; Stacey L. Dogan & Mark A. Lemley, The Merchandising Right: Fragile Theory or Fait Accompli?, 54 EMORY L. J. 461, 491 (2005); Jeremy N. Sheff, Veblen Brands, 94 MINN. L. REV.(forthcoming 2012), available at http://ssrn.com/abstract=1798867.
[4] See, e.g., KEVIN LANE KELLER, STRATEGIC BRAND MANAGEMENT: BUILDING, MEASURING, AND MANAGING BRAND EQUITY 387-88 (2d ed. 2003) (describing “brand attachment” and “brand activity” as important components of a brand’s economic value).
[5] Stephanie Clifford, Abercrombie Wants Off ‘Jersey Shore’ (Wink-Wink), N.Y. TIMES, Aug. 18, 2011, at B1, available at http://www.nytimes.com/2011/08/18/business/abercrombie-offers-jersey-shore-cast-a-paid-non-product-placement.html.
[6] Rupert Neate et al., UK riots: Love affair with gangster-chic turns sour for top fashion brands, GUARDIAN, Aug. 12, 2011, at P8, available at http://gu.com/p/3x7tj.
[7] Clifford, supra note 5.  See also Brian Goldman, Putting Lamborghini Doors on the Escalade: A Legal Analysis of the Unauthorized Use of Brand Names in Rap/Hip-Hop, 8 TEX. REV. ENT. & SPORTS L. 1 (2007) (analyzing the legal claims and defenses in situations similar to those described in Part II.A, infra).
[8] Cf. Renegade Definition, OED ONLINE, http://www.oed.com/viewdictionaryentry/Entry/162410 (last visited Aug. 18, 2011) (subscription required) (“A person who deserts, betrays, or is disloyal to an organization, country, or set of principles. . . . A person who rejects authority and control or behaves in an unconventional manner; a rebel, a nonconformist.”).
[9] Jeremy N. Sheff, Biasing Brands, 32 CARDOZO L. REV. 1245, 1250-51 & n.24, 1254-59 (2011), available at http://ssrn.com/abstract=1681187.
[10] William M. Landes & Richard A. Posner, Trademark Law: An Economic Perspective, 30 J. L. & ECON. 265 (1987); Nicholas S. Economides, The Economics of Trademarks, 78 TRADEMARK REP.523 (1988).
[11] Chav Definition, OED ONLINE, http://www.oed.com/view/Entry/264253 (last visited Aug. 19, 2011) (subscription required) (“In the United Kingdom (originally the south of England): a young person of a type characterized by brash and loutish behaviour and the wearing of designer-style clothes (esp. sportswear); usually with connotations of a low social status.”).  While my use of this term reflects common usage in Britain, an American audience should be aware that the question of its social acceptability stirs some debate in that country.  See, e.g.Stop Use of ‘Chav’ – Think Tank, BBC NEWS (July 16, 2008), http://news.bbc.co.uk/2/hi/uk_news/7509968.stm (“[The word] “[c]hav is . . . deeply offensive to a largely voiceless group.”).
[12] See supra notes 5-6 and sources cited therein.
[13] See generally Jennifer Edson Escalas, Narrative Processing: Building Consumer Connections to Brands, 14 J. CONSUMER PSYCHOL. 168 (2004), available at http://dx.doi.org/10.1207/s15327663jcp1401&2_19.
[14] See Kevin Lane Keller, Conceptualizing, Measuring, and Managing Customer-Based Brand Equity, 57 J. MARKETING 1, 3-8 (1993); see generally Zafer B. Erdogan, Celebrity Endorsement: A Literature Review, 15 J. MKTG. MGMT. 291 (1999); Lawrence Lessig, The Regulation of Social Meaning, 62 U. CHI. L. REV. 943, 1009 (1995) (“[Michael Jordan] endorses Nike shoes.  Some of his social capital is transferred to the product endorsed, and the meaning of wearing Nike shoes changes.”); Grant McCracken, Who Is the Celebrity Endorser?: Cultural Foundations of the Endorsement Processin CULTURE AND CONSUMPTION II: MARKETS, MEANING, AND BRAND MANAGEMENT 97, 97 (2005) (setting forth a “meaning-transfer” theory of the celebrity endorser).  This focus on subjective differentiation has long generated criticism from legal and economic commentators. See generally, e.g., Ralph S. Brown, Jr., Advertising and the Public Interest: Legal Protection of Trade Symbols, 57 YALE L. J. 1165 (1948); Shahar J. Dilbary, Famous Trademarks and the Rational Basis for Protecting “Irrational Beliefs, 14 GEO. MASON L. REV. 605, 610-12 (2007) (collecting sources); Glynn S. Lunney, Jr., Trademark Monopolies, 48EMORY L.J. 367 (1999).
[15] WHO IS THE GERBER BABY?, http://www.gerber.com/AllStages/About/Gerber_Baby.aspx (last visited Jan. 22, 2012).
[16] The Marlboro Man, THE ADVERTISING CENTURY: ADAGE.COMhttp://adage.com/century/icon01.html (last visited Jan. 22, 2012).
[17] WookieCookie, 1972 Avon Commercial – The Avon Lady, YOUTUBE (Mar. 15, 2007), http://youtu.be/fK9-scvGGWY.
[18] GiraldiMedia, Michael Jackson Pepsi Generation, YOUTUBE (June 26, 2009), http://youtu.be/po0jY4WvCIc.
[19] See generally Dilbary, supra note 14; see also Economides, supra note 10, at 535 (“I believe that perception advertising provides consumers with products (mental images) that they value, and which would have been scarce in its absence.  It is not a direct waste.  Some resources are wasted, however, in the effort to tie in the desired image with the advertised product.”).
[20] Jennifer Edson Escalas & James R. Bettman, You Are What They Eat: The Influence of Reference Groups on Consumers’ Connections to Brands, 13 J. CONSUMER PSYCHOL. 339, 339 (2003),available at http://dx.doi.org/10.1207/S15327663JCP1303_14.  Cf. Laura A. Heymann, Metabranding and Intermediation: A Response to Professor Fleischer, 12 HARV. NEGOT. L. REV. 201, 202 (2007) (“Brand meaning is not created until the recipient  of the messages both receives those messages and gives them any particular relevance. . . . Thus, a brand’s meaning doesn’t exist in the abstract, nor does it depend on the interpretation intended by the producer; rather, any meaning that exists does so because consumers are willing to give credence to the message that’s conveyed (or, indeed, some alternative message should consumers be so inclined.”); Lessig, supra note 14, at 1009-12 (describing two mechanisms—tying and ambiguation—by which consumers can participate in constructing the meanings of the objects they consume).
[21] Beebe, supra note 3, at 823.
[22] Id. at 821.
[23] See supra note 8 and accompanying text.
[24] See, e.g., COURVOISIER HERITAGE, http://courvoisier.com/heritage/ (last visited Jan. 22, 2012); COURVOISIER COGNAC: THE BRANDY OF NAPOLEON, http://www.napoleonprisonnier.com/images/postmortem/moderne/courvoisier-large.jpg (last visited Jan. 22, 2012).
[25] See, e.g., Courvoisier Advertisement, GOURMET, Oct. 1950, at 25.
[26] Mike Steinberger, Cognac Attack!, SLATE (Apr. 2, 2008), http://www.slate.com/id/2188005/.
[27] ICE CUBE, Down for Whateveron LETHAL INJECTION (Priority Records 1993).
[28] See generally NELSON GEORGE, HIP HOP AMERICA (3d ed. 2005).
[29] BUSTA RHYMES, Pass The Courvoisieron GENESIS (J Records 2001).
[30] Pass The Courvoisier—Busta Rhymes, BILLBOARD.COM, http://www.billboard.com/#/song/busta-rhymes/pass-the-courvoisier/3694375 (last visited Jan. 22, 2012).
[31] ICE CUBEsupra note 27.
[32] allblackamericans, Busta Rhymes feat. P. Diddy & Pharrell – Pass The Courvoisier Part II, YOUTUBE.COM (Feb. 20, 2009), http://youtu.be/JAYXRtNxsGA.
[33] See supra note 20 and accompanying text.
[34] Cf. Jay-Z, Jay-Z on Cristal: ‘Disrespect for the Culture of Hip-Hop’, TIME (Nov. 18, 2010), http://www.time.com/time/arts/article/0,8599,2032217,00.html, (“Everything that hip-hop touches is transformed by the encounter, especially things like language and brands, which leave themselves open to constant redefinition.  With language, rappers have raided the dictionary and written in new entries to every definition . . . The same thing happens with brands—Cristal meant one thing, but hip-hop gave its definition some new entries. . . . Cristal, before hip-hop, had a nice story attached to it: It was a quality, premium, luxury brand known to connoisseurs.  But hip-hop gave it a deeper meaning. Suddenly, Cristal didn’t just signify the good life, but the good life laced with hip-hop’s values: subversive, self-made, audacious, even a little dangerous. The word itself—Cristal—took on a new dimension.”).
[35] Bernard Stamler, A New Campaign for Courvoisier, Brandy of Napoleon, Looks for Younger, Hipper Customers, N.Y. TIMES (Aug. 29, 2000), http://www.nytimes.com/2000/08/29/business/media-business-advertising-new-campaign-for-courvoisier-brandy-napoleon-looks.htmlsee also Hillary Chura, Spirits Marketing: Global Hue to Handle Courvoisier Business, ADVERTISING AGE (Jan. 20, 2003), http://adage.com/article/news/spirits-marketing-globalhue-handle-courvoisier-business/50448/.
[37] Press Release, Beam Global Spirits & Wine, Courvoisier Launches New Advertising Campaign Inspiring Consumers to ‘Find Greatness Within’ (Oct. 16, 2007), http://finance.bnet.com/bnet/news/read?GUID=3497442.
[38] LEHU, supra note 36, at 175.
[39] See generally Steinberger, supra note 26.
[40] See generally Jay-Z, supra note 34 (explaining the rapper’s decision to publicly boycott the champagne he once touted in his lyrics).
[41] See, e.g., Claire Bothwell, Burberry Versus the Chavs, BBC NEWS (Oct. 28, 2005), http://news.bbc.co.uk/2/hi/business/4381140.stm (“Only five years ago, Burberry was the darling of the fashion world after undergoing one of the most envied brand reinventions of recent years . . .  But all too quickly, the brand became a victim of its own success.  Label-conscious football hooligans started to adopt the distinctive check.  It was associated with people who did bad stuff, who went wild on the terraces.”) (internal quotation marks omitted); Liz Jones, The Luxury Brand with a Chequered Past, Burberry’s Shaken Off Its Chav Image to Become the Fashionistas’ Favourite Once More, MAILONLINE (June 2, 2008), http://www.dailymail.co.uk/femail/article-1023460/Burberrys-shaken-chav-image-fashionistas-favourite-more.html.
[42] See, e.g., Anthony Venutolo, Jersey Shore Season 4 Premiere Sets Ratings Record, NEW JERSEY ONLINE (AUG. 5, 2011), http://www.nj.com/entertainment/tv/index.ssf/2011/08/jersey_shore_italy_florence_ra.html; “Jersey Shore” saves MTV from Ratings Slump, CBS NEWS (Aug. 31, 2010),  http://www.cbsnews.com/stories/2010/08/31/entertainment/main6824265.shtml; David Showalter, MTV’s ‘Jersey Shore’ Success is a Cultural Phenomenon, NEW JERSEY NEWSROOM (July 13, 2011), http://www.newjerseynewsroom.com/movies/success-of-jersey-shore-is-a-cultural-phenomenon.
[43] See supra note 5 and accompanying text.
[44] See, e.g., Neil Genzlinger, Surf, Skin and Jersey. What’s Not to Love?, N.Y. TIMES Jan. 4, 2010, at C1, available at http://www.nytimes.com/2010/01/04/arts/television/04shore.html (“Young People Need Bad Examples. . . .  They have no idea how much ignorance, narcissism, predatory sexism and hair-gel abuse lurk out there in the real world.  Unless they watch ‘Jersey Shore.’”).
[45] See, e.g., Letter from New Jersey Italian American Legislative Caucus to Philippe P. Dauman, President and Chief Executive Officer, Viacom, Inc. (Dec. 22, 2009), http://www.njsendems.com/Docs/Italian%20American%20Caucus%20Letter%20on%20MTV%27s%20%27Jersey%20Shore,%27%2012-23-09.pdf.
[46] See generally Jeremy N. Sheff, The Ethics of Unbranding, 21 FORDHAM INTELL. PROP., MEDIA & ENT. L. J. 983 (2011).
[47] Simon Doonan, How Snooki Got Her Gucci: The Dirt on Purses, N.Y. OBSERVER (Aug. 17, 2010, 5:55 PM), http://www.observer.com/2010/culture/pricey-landscaping.
[48] Cathy Horyn, Snooki’s Time, N.Y. TIMES, July 23, 2010, at ST1, available at http://www.nytimes.com/2010/07/25/fashion/25Snooki.html.
[49]As of this writing Snooki has nearly 4.2 million followers on Twitter.  Nicole Polizzi, TWITTER, http://twitter.com/#!/snooki (last visited Jan. 22, 2012). A substantial number of undergraduates at Rutgers University persuaded their administration to pay her more than $30,000 to appear on campus, and nearly 1,000 lined up for the chance to hear her speak. Aman Ali, Rutgers University defends Snooki’s $32,000 appearance, REUTERS (Apr. 1, 2011), http://www.reuters.com/article/2011/04/01/us-snooki-idUSTRE7305LQ20110401; Rutgers University’s Statement on Nicole “Snooki” Polizzi and her Comedy Act’s Appearance on Campus (Apr. 4, 2011), http://news.rutgers.edu/medrel/statements/2011/statement-from-rutge-20110401.  One commentator noted that Snooki probably generated ten times that sum in free publicity for the University, much as she boosts publicity—and with it, sales—for bars and clubs at which she appears for as little as a few minutes.  Catherine Rampell, Snookinomics, N.Y. TIMES: ECONOMIX BLOG (Apr. 11, 2011), http://economix.blogs.nytimes.com/2011/04/11/snookinomics/.
[50] While The Situation lacks Snooki’s Twitter footprint—at just over a million followers—his Facebook page suggests a much deeper fan base.  Compare Michael Sorrentino, Twitter, http://twitter.com/#!/ITSTHESITUATION (last visited Jan. 22, 2012); with MIKE “THE SITUATION”, FACEBOOK, https://www.facebook.com/MikeTheSituation (last visited Jan. 22, 2012) (Approximately 3.83 million “likes”).
[51] Emma Rosenblum, The Situation with The Situation, NEW YORK MAG. (June 20, 2010), http://nymag.com/guides/summer/2010/66798/.
[52] Elizabeth Holmes, Abercrombie and Fitch Offers to Pay ‘The Situation’ to Stop Wearing Its Clothes, WALL ST. J. SPEAKEASY BLOG (Aug. 16, 2011), http://blogs.wsj.com/speakeasy/2011/08/16/abercrombie-and-fitch-offer-to-pay-the-situation-to-stop-wearing-their-clothes/.
[53] News Release, Abercrombie & Fitch, Abercrombie & Fitch Proposes a Win-Win Situation (Aug. 12, 2011), available at http://phx.corporate-ir.net/phoenix.zhtml?c=61701&p=irol-newsArticle&ID=1597274.
[54] Id.
[55] Id.
[56] Holmes, supra note 52.
[57] Rosenblum, supra note 51; Holmes, supra note 52.
[58] Holmes, supra note 52; see also Andrea Felsted & Alan Rappeport, Abercrombie Sees Off Awkward Brand Situation, FINANCIAL TIMES (Aug. 19, 2011), http://www.ft.com/cms/s/0/0c54f972-ca7c-11e0-94d0-00144feabdc0.html?ftcamp=rss.
[59] See, e.g., Kimberly R. McNeil et al., ‘Did You Hear What Tommy Hilfiger Said?’ Urban Legend, Urban Fashion and African-American Generation Xers, 5 J. FASHION MKTG. & MGMT. 234, 235 (2001) (“[T]he persistence of the Tommy Hilfiger rumour suggests that this urban legend could possibly influence sales of the brand in a core market . . . the impact of such rumours could be tremendous.”); cf. generally Jay-Z, supra note 34.
[60] See generally, e.g., Sarah McBride & Ethan Smith, Music Industry to Abandon Mass Suits, WALL ST. J., Dec. 19, 2008, at B1, available at http://online.wsj.com/article/SB122966038836021137.html (“[T]he legal offensive ultimately did little to stem the tide of illegally downloaded music. And it created a public-relations disaster for the industry, whose lawsuits targeted, among others, several single mothers, a dead person and a 13-year-old girl.”).
[61] England Riots: Maps and Timeline, BBC NEWS (Aug. 15, 2011), http://www.bbc.co.uk/news/uk-14436499 [hereinafter Timeline]; Tottenham Police Shooting: Dead Man Was Minicab Passenger, BBC NEWS (Aug. 5, 2011), http://www.bbc.co.uk/news/uk-england-london-14423942.
[62] Timelinesupra note 61; Riots in Tottenham After Mark Duggan Shooting Protest, BBC NEWS (Aug. 7, 2011), http://www.bbc.co.uk/news/uk-england-london-14434318.
[63] Timelinesupra note 61; cf. Zoe Williams, The UK Riots: The Psychology of Looting, GUARDIAN (Aug. 9, 2011), http://www.guardian.co.uk/commentisfree/2011/aug/09/uk-riots-psychology-of-looting.
[64] London Rioters, ‘Showing the rich we do what we want’, BBC NEWS (Aug. 9, 2011), http://www.bbc.co.uk/news/uk-14458424.
[65] Williams, supra note 63; Anthony France & Brian Flynn, Cops Vow to Nail the Twitter Rioters, THE SUN (Aug. 9, 2011), http://www.thesun.co.uk/sol/homepage/news/3741129/Cops-vow-to-nail-the-Twitter-rioters.html.
[66] Michael Cervieri, Tomorrow’s Cover of the Guardian, FUTURE JOURNALISM PROJECT (Aug. 8, 2011), http://futurejournalismproject.org/post/8658034888/guardian-cover-london-riots.
[67] See, e.g., Neate et al., supra note 6; Janet Street Porter, Big Brands Pay Price of Flirting with Gangsta Chic, DAILY MAIL ONLINE (Aug. 15, 2011), http://www.dailymail.co.uk/femail/article-2025978/UK-riots-Big-brands-like-Nike-Adidas-pay-price-flirting-gangsta-chic.html.
[68] See, e.g., Neate et al., supra note 6; Porter, supra note 67; Chris Roper, The Great UK Shopping Riots, MAIL & GUARDIAN ONLINE (Aug. 10, 2011), http://mg.co.za/article/2011-08-10-the-great-uk-shopping-riots (“[F]orce-feeding people adverts about things they’ll never have, and lives they will never be allowed to share, was almost certain to result in a mob that has decided to steal life, rather than live it vicariously . . . . [T]he thousands who aren’t given the opportunities to earn might eventually, as in the UK, decide to just take . . . . [T]he Great UK Shopping Riots prove that advertising works.  The shops that are being looted are mainly brands that have sold themselves to poor people.”)
[69] See generally Mark Ritson, Spare Us This Riot of Dodgy Brand Theories, MARKETINGWEEK (Aug. 18, 2011), http://www.marketingweek.co.uk/sectors/industry/spare-us-this-riot-of-dodgy-brand-theories/3029361.article.
[70] Rosie Baker, Retailers Targeted by Rioters Suffer Fall in Brand Perception, MARKETINGWEEK (Aug. 17, 2011), http://www.marketingweek.co.uk/sectors/retail/retailers-targeted-by-rioters-suffer-fall-in-brand-perception/3029330.article.
[71] Neate et al., supra note 6.
[72] Porter, supra note 67.
[73] See, e.g., Neate et al., supra note 6; Cervieri, supra note 66.
[74] Neate et al., supra note 6.
[75] Levi’s, Levi’s® Go Forth 2011 (English), YOUTUBE (July 20, 2011), http://youtu.be/KT16DcHcjRA; Charles Bukowski, The Laughing Heartin BETTING ON THE MUSE: POEMS & STORIES 400 (1996) (“your life is your life/don’t let it be clubbed into dank submission./be on the watch.”).
[76] Levi’s, supra note 75.
[77] See, e.g., Tim Nudd, Levi’s Thinks It’s a Good Time for Riot Imagery in Ads, ADWEEK: ADFREAK (Aug. 9, 2011), http://www.adweek.com/adfreak/levis-thinks-its-good-time-riot-imagery-ads-134026.
[78] See, e.g.Post-Riots Levi’s And Nike To Shift Comms And Marketing Strategy From Rebellion, PR WEEK (Aug. 18, 2011), http://www.prweek.com/uk/news/1085216/Post-riots-Levis-Nike-shift-comms-marketing-strategy-rebellion/.
[79] Eliza Williams, Awkward Timing for New Levi’s Ad, CREATIVE REVIEW: CR BLOG (Aug. 10, 2011), http://www.creativereview.co.uk/cr-blog/2011/august/awkward-timing-for-new-levis-spot; Sara Kimberley, Levi’s Ad Yanked Over Riot Police Scene, CAMPAIGN (Aug. 10, 2011), http://www.campaignlive.co.uk/go/news/article/1084242/levis-ad-yanked-riot-police-scene/.
[80] Rosie Baker, Levi’s Pulls Ads Following London Riots, MARKETING WEEK (Aug. 10, 2011), http://www.marketingweek.co.uk/sectors/retail/levi%E2%80%99s-pulls-ads-following-london-riots/3029146.article.
[81] See supra note 7 and accompanying text.
[82] See 15 U.S.C. § 1125(a)(1)(A) (2010) (imposing liability against uses of trademarks that are “likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of [the defendant] with another person, or as to the origin, sponsorship, or approval of [the defendant’s] goods, services, or commercial activities by another person”); see generally Mark P. McKenna, The Normative Foundations of Trademark Law, 82 NOTRE DAME L. REV. 1839 (2007)  (tracing the historical development of Anglo-American trademark law).
[83] See, e.g., Mark A. Lemley & Mark McKenna, Irrelevant Confusion, 62 STAN. L. REV. 413, 414 (2010) (“Over the middle part of the twentieth century, courts expanded the range of actionable confusion beyond confusion over the actual source of a product—trademark law’s traditional concern—to include claims against uses that might confuse consumers about whether the trademark owner sponsors or is affiliated with the defendant’s goods.”).
[84] See generally Borden Ice Cream Co. v. Borden’s Condensed Milk Co., 201 F. 510 (7th Cir. 1912).
[85] See, e.g., Aunt Jemima Mills Co. v. Rigney & Co., 247 F. 407 (2d Cir.1917); Yale Elec. Corp. v. Robertson, 26 F.2d 972 (1928); see generally Lemley & McKenna, supra note 83, at 423-27.
[86] Compare United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90 (1918) (limiting common law trademark rights to geographic region of actual use); with 15 U.S.C. § 1072 (2010) (providing that federal registration of a trademark provides nationwide notice of a trademark claim); Dawn Donut Co., Inc. v. Hart’s Food Stores, Inc., 267 F.2d 358 (2d Cir. 1959) (holding that nationwide notice does not entitle the federal registrant to relief where geographic distance makes likelihood of confusion unlikely, but does give the registrant priority when and if it expands into the geographic region of a later adopter’s actual use).
[87] RESTATEMENT (THIRD) OF UNFAIR COMPETITION, § 33 cmt. a (1995) (“The historical conception of trademarks as symbols indicating the physical source of the goods led a number of early courts to conclude that the owner of a trademark could not license others to use the mark without destroying the significance of the designation as an indication of source.  Licenses were sometimes declared invalid as a fraud on the public, and licensors risked forfeiture of their rights in the mark through a finding of abandonment.”); see also McKenna, supra note 82, at 1893-95, Lemley & McKenna, supra note 83, at 425-27.
[88] See, e.g., 15 U.S.C. § 1055 (2010) (codifying the principle that licensing of trademarks to related companies does not invalidate, and can strengthen, the licensed mark).
[89] Id.
[90] See generally Zahr Said, Embedded Advertising and the Venture Consumer, 89 N.C. L. REV. 99 (2010).
[91] Anheuser-Busch, Inc. v. Balducci Publ’ns, 28 F.3d 769 (8th Cir. 1994) (parody ad in a humor magazine for fictitious “Michelob Oily” beer held infringing); Coca-Cola Co. v. Gemini Rising, Inc., 346 F. Supp. 1183 (E.D.N.Y. 1972) (poster copying the style of a Coca-Cola advertisement but altered to read “Enjoy Cocaine” held likely to confuse at preliminary injunction stage); see Lemley & McKenna, supra note 83, at 418-21 (collecting examples).
[92] Federal Trademark Dilution Act of 1995, § 4, 109 Stat. 985, 986 (1996) (codified as amended at 15 U.S.C. § 1127 (2010)).  This statute and subsequent amendments also expanded even further the types of effects on the minds of the public that can give rise to liability.  Owners of famous trademarks may now seek to enjoin uses of their brands that threaten to “impair[] the distinctiveness” or “harm[] the reputation” of those brands, “regardless of the presence or absence of actual or likely confusion . . . or of actual economic injury.”  15 U.S.C. § 1125(c) (2010).
[93] James Gibson, Risk Aversion and Rights Accretion in Intellectual Property Law, 116 YALE L. REV. 882, 907-23 (2007); see also Lemley & McKenna, supra note 83, at 421 (“[M]any [entertainment producers] simply cave in and change their practices rather than face the uncertainty of a lawsuit.”); cf. generally William McGeveran, Rethinking Trademark Fair Use, 94 IOWA L. REV. 49 (2008) (arguing that the cost of litigating a meritorious defense to a claim of trademark infringement creates a chilling effect on expressive uses of trademarks).
[94] Gibson, supra note 93, at 907-23.
[95] The prevalence of brand mentions in hip-hop lyrics has led many to conclude that artists are paid for such mentions—and indeed sometimes they are, even if only after the fact.  Gil Kaufman, Push The Courvoisier: Are Rappers Paid for Product Placement?, MTV (June 9, 2003), http://www.mtv.com/news/articles/1472393/rappers-paid-product-placement.jhtmlsee also Rebecca Tushnet, Running the Gamut from A to B: Federal Trademark and False Advertising Law, 159 U. PA. L. REV. 1305, 1313-14 (2011) (“Given the number of lucrative and highly visible product placement deals, . . . trademark owners can argue that consumers see a brand’s presence practically anywhere as an indication of endorsement.”).  It is thus perhaps unsurprising that MTV’s response to Abercrombie & Fitch’s publicity stunt regarding The Situation was to suggest a product placement deal.  See Clifford, supra note 5 (“MTV played along on Wednesday. ‘It’s a clever P.R. stunt, and we’d love to work with them on other ways they can leverage “Jersey Shore” to reach the largest youth audience on television,’ it said in an e-mail.”).
[96] See Kaufman, supra note 95; Said, supra note 90, at 111-17, 133-38.  Cf. Bruce Feiler, Pocketful of Dough, GOURMET, Oct. 2000, available at http://www.gourmet.com/magazine/2000s/2000/10/pocketful (“Seconds later, with new confidence, I slipped a fifty toward his hand and said, ‘Is there any way you could speed that up?’  The man felt the money, then pushed it back into my hand.  ‘Sorry,’ he said, ‘there really is nothing I can do.’  Four minutes later, though, we were seated at a table for two by the window.  Moreover, the maître d’ came to our table several times to ask if everything was satisfactory.  At the end of the evening, not because I had planned it but entirely because I felt like it, I gave him $30.  He graciously accepted.  Outside, I realized I had just witnessed the gold standard.  The maître d’ turned down the money when it was a bribe, gave us the service anyway, then accepted the money as a well-earned tip.”) (emphasis omitted).
[97] See generally, e.g., Edward Lee, Warming Up to User-Generated Content, 2008 U. ILL. L. REV. 1459; Ellen P. Goodman, Peer Promotions and False Advertising Law, 58 S.C. L. REV. 683 (2007); Rebecca Tushnet, Attention Must Be Paid: Commercial Speech, User-Generated Ads, and the Challenge of Regulation, 58 BUFF. L. REV. 721 (2010); See David Streitfeld, In a Race to Out-Rave Rivals, 5-Star Web Reviews Go for $5, N.Y. TIMES, Aug. 20, 2011, at A1, available at http://www.nytimes.com/2011/08/20/technology/finding-fake-reviews-online.html (noting the growing practice of marketers paying writers to post favorable user reviews on Amazon.com and other sites); Trevor Pinch & Filip Kesler, How Aunt Ammy Gets Her Free Lunch: A Study of the Top-Thousand Customer Reviewers at Amazon.com, , at 52-55, 78(June 12, 2011) (unpublished manuscript) (available at http://www.freelunch.me/filecabinet/HowAuntAmmyGetsHerFreeLunch-FINAL.pdf) (noting the common practice of sending top reviewers free advance copies of new books, and observing that “[a]s Amazon begins to sell more and more different sorts of goods, reviewers too begin to realize . . . that they can gain even more freebies by reviewing such items”).
[98] For example, the Federal Trade Commission’s guidelines on endorsements purport to draw extremely fine distinctions between the types of conduct that turn an ordinary consumer into a paid endorser in the blogging context.  Guides Concerning the Use of Endorsements and Testimonials in Advertising, 16 C.F.R. § 255.0 ex. 8 (2009), available at http://ftc.gov/os/2009/10/091005revisedendorsementguides.pdf.  Even the Commission itself seems to have trouble applying its guidelines consistently.  See, e.g., Nick Bilton, F.T.C. Says It Will Not Investigate Ashton Kutcher, N.Y. TIMES BITS BLOG (Aug. 19, 2011, 1:07 PM), http://bits.blogs.nytimes.com/2011/08/19/f-t-c-says-it-will-not-investigate-ashton-kutcher/.  Another example of the blurring lines between enthusiastic consumer and paid advocate comes from the increasing use of “brand ambassadors” on college campuses.  See Natasha Singer, On Campus, It’s One Big Commercial, N.Y. TIMES, Sept. 11, 2011, at BU1, available at http://www.nytimes.com/2011/09/11/business/at-colleges-the-marketers-are-everywhere.html.
[99] See William McGeveran, Disclosure, Endorsement, and Identity in Social Marketing, 2009 U. ILL. L. REV. 1105, 1107 (2009) (describing marketing through online social networks as “a form of reputational piggybacking”).
[100] Compare Wells Fargo ‘Flash Mob’ Yields 1 Million YouTube Views, THE FINANCIAL BRAND (May 9, 2011), http://thefinancialbrand.com/18345/wells-fargo-times-square-flash-mob-video/with David Downs, The Evolution of Flash Mobs from Pranks to Crime and Revolution, SAN FRANCISCO EXAMINER (Aug. 28, 2011), http://www.sfexaminer.com/local/2011/08/evolution-flash-mobs-pranks-crime-and-revolution.
[101] Cf. L.I. Couple Seeks Trademark for “Occupy Wall St.”, THE SMOKING GUN (Oct. 24, 2011), http://www.thesmokinggun.com/documents/occupy-wall-street-trademark-986531 (reporting an application to register the mark “Occupy Wall St.” for use on apparel, bumper stickers, and accessories, and a separate application for the mark “We are the 99%”—both marks being slogans of the protest movement against economic and financial elites that continues to grow and develop as of this writing).  This report prompted an apt (if not entirely original) quip by my friend and colleague Professor Laura Heymann: “The revolution will be merchandised.”
[102] Rebecca Tushnet, Gone in Sixty Milliseconds: Trademark Law and Cognitive Science, 86 TEX. L. REV. 507, 540 (2008).
[103] See supra Part II.C.
[104] See supra notes Part II.B.
[105] See supra notes Part II.A.
[106] See supra note 91 and sources cited therein.
[107] See, e.g., Lemley & McKenna, supra note 83, at 413-14 (relating an incident in which FIFA required soccer fans to surrender unlicensed team-colored pants as a condition of entering a football match).
[108] See generally, e.g., Graeme B. Dinwoodie & Mark D. Janis, Confusion over Use: Contextualism in Trademark Law, 92 IOWA L. REV. 1597 (2007) (rejecting trademark use as an independent doctrine and arguing for “contextual analysis” that focuses on confusion); Stacey L. Dogan & Mark A. Lemley, Grounding Trademark Law Through Trademark Use, 92 IOWA L. REV. 1669 (2007) (arguing that trademark use is a doctrine made necessary by the broadening scope of novel trademark claims directed at internet intermediaries); Mark P. McKenna, Trademark Use and the Problem of Source, 2009 U. ILL. L. REV. 773 (arguing that trademark use questions inevitably collapse into questions about consumer confusion).
[109] Rescuecom Corp. v. Google, Inc., 562 F.3d 123, 127-40 (2d Cir. 2009); Stacey L. Dogan, Beyond Trademark Use, 8 J. TELECOMM. & HIGH TECH. L. 135, 136 (2010) (“The Second Circuit appears to have settled the issue, at least temporarily, in its recent opinion….  The Rescuecom court held that the Lanham Act contains virtually no limitation on the type of ‘use’ of a mark that can qualify as direct trademark infringement.”).
[110] 15 U.S.C. 1125(c)(3) (2010) (excluding comparative advertising, parody, criticism, and comment, news reporting and commentary, and noncommercial use from the definition of actionable dilution); Stacey L. Dogan & Mark A. Lemley, The Trademark Use Requirement in Dilution Cases, 24 SANTA CLARA COMPUTER & HIGH TECH. L. J. 541, 549-54 (2008) (arguing that the language of the amended dilution statute supports the interpretation that only use “as a mark” can trigger dilution liability); Tiffany (NJ) Inc. v. eBay, Inc., 600 F.3d 93, 112 (2d Cir. 2010) (effectively adopting the Dogan & Lemley interpretation of the amended dilution statute).
[111] See Tiffany (NJ), 600 F.3d at 112 (holding that there can be no dilution where “there is no second mark or product at issue … to blur with or to tarnish” the plaintiff’s mark); Dogan & Lemley, supra note 109, at 552 (“[T]he only actionable ‘uses’ by a defendant of the plaintiff’s famous mark are those in which a defendant uses a trademark or trade name to identify and distinguish its own goods and services.”).
[112] See supra note 110.
[113] The Trade-Mark Cases, 100 U.S. 82, 95-97 (1879) (invalidating an early federal trademark statute for failure to limit its reach to that sphere of commerce within the power of Congress to regulate).
[114] 15 U.S.C. § 1125(a), (c) (2010) (establishing a private right of action against certain uses of a mark “in commerce”).
[115] See supra note 91 and sources cited therein.
[116] Wickard v. Filburn, 317 U.S. 111, 127-28 (1942).
[117] See supra notes 96-102 and accompanying text.
[118] See Lemley & McKenna, supra note 83.
[119]Id. at 445-53. See generally Tushnet, supra note 95 (comparing the applicable standards under trademark law and false advertising law).
[120]  Lemley & McKenna, supra note 83, at 437-39.
[121] Compare Harry Wallop, Burberry admits chav effect checked sales over Christmas, THE TELEGRAPH (Jan. 13, 2005), http://www.telegraph.co.uk/finance/2903392/Burberry-admits-chav-effect-checked-sales-over-Christmas.html (noting that the association of the brand with “chavs” had “not been helpful” to Burberry’s sales, though other factors also took a negative impact), with Jeremy Mullman, Rap Mogul’s Boycott of Cristal Champagne Unlikely to Hurt Brand, ADVERTISING AGE (June 27, 2006), http://adage.com/article/news/rap-mogul-s-boycott-cristal-champagne-hurt-brand/110203/ (reporting that a boycott by Jay-Z would not impact Cristal’s sales because it is a limited production label which is always sold out).  See supra notes 38-39 and accompanying text.  Professors Lemley and McKenna point to a study suggesting that a brand’s affiliation with a celebrity endorser who later becomes publicly associated with some moral failing tends not to reflect poorly on the brand absent some responsibility of the brand owner for the endorser’s immoral conduct.  Lemley & McKenna, supra note 83, at 437-39 (quoting Nicole L. Votolato & H. Rao Unnava, Spillover of Negative Information on Brand Alliances, 16 J. CONSUMER PSYCHOL. 196 (2006); see also Therese A. Louie, Robert L. Kulik & Robert Jacobson, When Bad Things Happen to the Endorsers of Good Products, 12 MARKETING LETTERS 13 (2001) (testing the effect on firm value of celebrity endorser blameworthiness).  But see Ace Metrix, Celebrity Advertisements: Exposing a Myth of Advertising Effectiveness 1 (2010), available at http://mktg.acemetrix.com/acton/ct/563/p-001d/Bct/-/-/ct14_1/1 (finding that advertisements featuring celebrities “do not perform any better than non-celebrity ads, and in some cases they perform much worse.”).  Of course, the brand owner is, in some sense, responsible for the brand renegade’s conduct, because it is the brand owner’s cultivation of its own image that attracts the brand renegade in the first place.
[122] Lemley & McKenna, supra note 83, at 441-443.
[123] 6 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS & UNFAIR COMPETITION, § 31:145 (“A trademark is itself a powerful symbol identifying a single person, corporation or commercial source. When it is used without permission as a vehicle for someone else’s controversial message, it will be a matter of fact whether the ordinary viewer is likely to believe that the owner of the trademark sponsors or approves of the content of the message. Alternatively, the message itself may be so “morally repugnant” that the person or company would be forced to speak in rebuttal. When the property right resides in the symbol of a trademark itself, the link between defendant’s message and the trademark owner should be much more likely to occur than when the property right merely resides in a semi-public shopping center, as in Pruneyard [Shopping Center v. Robins, 447 U.S. 74  (1980)].”).
[124] See, e.g., Bally Total Fitness Holding Corp. v. Faber, 29 F. Supp. 2d 1161, 1165 (C.D. Cal. 1998) (“[Plaintiff] is exercising his right to publish critical commentary about [defendant].”).
[125] Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894, 901 (9th Cir. 2002) (“[W]here an artistic work targets the original and does not merely borrow another’s property to get attention, First Amendment interests weigh more heavily in the balance.”).
[126] Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir. 1989) (allowing trademark liability only if the mark in question bears no “artistic relevance” to the work whatsoever).
[127] Cliffs Notes, Inc. v. Bantam Doubleday Dell Publ’g Grp., Inc., 886 F.2d 490, 495 (2d Cir. 1989) (extending the Rogers test to the content of expressive works).
[128] 15 U.S.C. § 1115(b)(4) (2010); KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 121-22 (2004) (“The common law’s tolerance of a certain degree of confusion on the part of consumers followed from . . . the undesirability of allowing anyone to obtain a complete monopoly on use of a descriptive term simply by grabbing it first.”).
[129] New Kids on the Block v. News Am. Publ’g, Inc., 971 F.2d 302, 307-08 (9th Cir. 1992) (“[W]e may generalize a class of cases where the use of the trademark does not attempt to capitalize on consumer confusion or to appropriate the cachet of one product for a different one.  Such nominative use of a mark—where the only word reasonably available to describe a particular thing is pressed into service—lies outside the strictures of trademark law.”).
[130] See supra note 111.
[131] See, e.g., Alex Kozinski, Trademarks Unplugged, 68 N.Y.U. L. REV. 960, 973 (1993) (“So long as trademark law limits itself to its traditional role of avoiding confusion in the marketplace, there’s little likelihood that free expression will be hindered.”); Robert C. Denicola, Trademarks as Speech: Constitutional Implications of the Emerging Rationales for the Protections of Trade Symbols, 1982 WISC. L. REV. 158, 206 (1982) (“The First Amendment will not permit the trademark owner the power to dictate the form, and thus the effectiveness, of another’s speech simply because his trademark has been used to express ideas that he would prefer to exclude from the public dialogue.”); Rochelle C. Dreyfuss, Expressive Genericity: Trademarks as Language in the Pepsi Generation, 65 NOTRE DAME L. REV. 397 (1990).
[132] Bally Total Fitness, 29 F. Supp. 2d at 1165 n.2 (“[N]o reasonably prudent Internet user would believe that ‘Ballysucks.com’ is the official Bally site or is sponsored by Bally.”); Cliffs Notes, 886 F.2d at 494 (“A parody must convey two simultaneous—and contradictory—messages: that it is the original, but also that it is not the original and is instead a parody.  To the extent that it does only the former but not the latter, it is not only a poor parody but also vulnerable under trademark law, since the customer will be confused.”); Rogers, 875 F.2d at 1000 (“[M]ost consumers are well aware that they cannot judge a book solely by its title any more than by its cover.”); New Kids on the Block, 971 F.2d at 308 (“Such use is fair because it does not imply sponsorship or endorsement by the trademark holder.”).
[133] Descriptive fair use doctrine reflects similar priorities.  The Supreme Court has noted that tolerating confusion in descriptive fair use cases is justified, at least in part, by the trademark owner’s role in creating the circumstances that give rise to that confusion.  KP Permanent Make-Up, 543 U.S. at 121-22 (“The common law’s tolerance of a certain degree of confusion on the part of consumers followed from the very fact that in cases like this one an originally descriptive term was selected to be used as a mark.”).  Brand owners who trade on social images cultivated in their own marketing campaigns find themselves in a similar position when a brand renegade invokes those meanings in ways that might give rise to confusion as to affiliation or sponsorship.
[134] 875 F.2d 994 (2d Cir. 1989).
[135] See, e.g.Mattel, 296 F.3d at 901-02 (9th Cir. 2002); Cliffs Notes, 886 F.2d at 494.
[136] Rogers, 875 F.2d at 999; see also Cliffs Notes, 886 F.2d at 495 (describing the Rogers test as a “balancing approach”).
[137] Rogers, 875 F.2d at 1000 (“In these circumstances, the slight risk that such use of a celebrity’s name might implicitly suggest endorsement or sponsorship to some people is outweighed by the danger of restricting artistic expression, and the Lanham Act is not applicable.”).
[138] See Yankee Pub. Inc. v. News America Pub. Inc.  809 F. Supp. 267, 276 (S.D.N.Y. 1992) (“[W]here the unauthorized use of a trademark is for expressive purposes of . . . news reporting, and commentary, the law requires a balancing of the rights of the trademark owner against the interests of free speech.”); cf. New York Times v. Sullivan, 376 U.S. 254, 265 (1964) (holding that private lawsuits against newspapers over the content of their reporting implicate the First Amendment).
[139] See, e.g.Mattel, 296 F.3d at 902-07 (holding that the “noncommercial use” exception to liability under the 1996 dilution statute—preserved in the 2006 amendments—exempts from dilution liability all expressive uses of a mark that do not fall within the definition of commercial speech for First Amendment purposes).
[140] See supra notes 102-105 and accompanying text.
[141] See supra note 20 and accompanying text.
[142] See Sheff, supra note 3, Part III (arguing that conspicuous consumption of status goods is expressive conduct under the First Amendment); cf. Lessig, supra note 14 at 946-47 (discussing the construction of social meaning—idiosyncratically defined differently than the term is used in this Article—through, among other things, individuals’ acts and behaviors).
[143] See supra notes 20-23 and accompanying text.
[144] Barton Beebe, The Semiotic Analysis of Trademark Law, 51 UCLA L. REV. 621, 703 (2004) (“It has long been a cliché, of social theory as much as of advertising practice, that consumers communicate with each other by the objects they consume.”).
[145] See Lisa P. Ramsey, Increasing First Amendment Scrutiny of Trademark Law, 61 S.M.U. L REV. 381, 386 n.22 (2008) (citing sources); see generally, e.g., Kozinski, supra note 132, at 973; Denicola,supra note 132, at 195–200; Dreyfuss, supra note 132.
[146] See, e.g., Rosenberger v. Rector & Visitors of Univ. of Va., 515 U.S. 819, 828-29 (1995) (stating that government may not regulate speech based on its substantive content or the message it conveys, nor may it favor one speaker over another); R.A.V. v. St. Paul, 505 U.S. 377, 391 (1992) (invalidating special prohibitions on speakers who express disfavored views on sensitive subjects); cf. ALEXANDER MEIKLEJOHN, FREE SPEECH AND ITS RELATION TO SELF-GOVERNMENT 26 (1948) (“Just so far as, at any point, the citizens who are to decide an issue are denied acquaintance with information … which is relevant to that issue, just so far the result must be ill-considered, ill-balanced planning for the general good.  It is that mutilation of the thinking process of the community against which the First Amendment to the Constitution is directed.”) (emphasis in original).
[147] See supra notes 134-140 and accompanying text.
[148] Cf. Rogers, 875 F.2d at 999 & n.5 (holding that expressive works are not shielded from trademark liability, even where their use of a mark has artistic relevance to the work, if that use “explicitly misleads as to the source or the content of the work”).
[149] Cf. Sheff, supra note 3 (arguing that in the absence of confusion as to source or quality, the First Amendment should bar counterfeiting claims for luxury “status” brands); Sheff, supra note 46, at 17 (arguing that the stealth marketing campaign involving Snooki’s consumption of authentic luxury handbags is unproblematic from an ethical standpoint).
[150] Cf. MEIKLEJOHN, supra note 147; Laura A. Heymann, The Public’s Domain in Trademark Law: A First Amendment Theory of the Consumer, 43 GA. L. REV. 651 (2009).

Choking the Channel of Public Information: Re-Examination of an Eighteenth-Century Warning about Copyright and Free Speech

Choking the Channel of Public Information: Re-Examination of an Eighteenth-Century Warning about Copyright and Free Speech
By Edward L. Carter* A pdf version of this article may be downloaded here.  


On Tuesday, February 22, 1774, Lord Effingham Howard rose in the British House of Lords to declare that a perpetual common law copyright “might prove dangerous to the constitutional rights of the people”[1] because it could amount to government-sanctioned private censorship of communication.  The press, Effingham said, was the lone check on official abuse of power, but a despotic leader from government or monarchy could use copyright law to thwart freedom of the press and hide his own wrongdoing.  By purchasing the copyright in a work critical of himself and then preventing reproduction and distribution, the despot would be “securing in his closet the secret which might prevent the loss of freedom” and “choking the channel of public information.”[2]  Effingham concluded by “declaring…that the Liberty of the Press was of such infinite consequence in this country, that if the constitution was overturned, and the people were enslaved, grant him but a free press and he would undertake to restore the one and redeem the other.”[3] Effingham’s remarks came at the conclusion of the final day of a nearly three-week legal appeal pitting hidebound London booksellers against an innovative Scottish newspaper owner and bookseller named Alexander Donaldson.  Effingham told his fellow lords—sitting as Britain’s highest judicial authority to decide the famous but misunderstood copyright case of Donaldson v. Beckett[4]—that he opposed the perpetual common law copyright sought by the London booksellers because the right would negatively “affect the Liberty of the Press.”[5]  In a defining and enduring precedent that retains relevance today in both the United Kingdom and the United States, Effingham and the majority of the other lords rejected the booksellers’ arguments and concluded that neither an author nor a printer could exercise copyright control of a creative work through a common law copyright after the statutory period of copyright had ended.  The House of Lords reversed an injunction that had barred Donaldson from printing and selling copies of James Thomson’s The Seasons without compensating the London booksellers who had claimed to own the perpetual copyright. Notwithstanding its expansiveness and eloquence, Effingham’s statement has received relatively little attention from scholars and jurists.  This fact can be attributed in part to the idiosyncrasies of British case law reporting in the eighteenth century: the two most prominent reported versions of Donaldson v. Beckett do not even contain the speeches of Effingham or his fellow lords, confining themselves instead to speeches by lawyers arguing the case and comments by common law judges who were invited to advise the lords in making the ultimate decision.[6] However, in its treatment of two recent cases decided more than two centuries after Donaldson, the U.S. Supreme Court has given scholars fresh reason to carefully re-examine Effingham’s warning about the dangers posed by copyright to free expression.  First, by tying application of First Amendment scrutiny to a test of whether Congress has altered the “traditional contours” of copyright law, the Court in Eldred v. Ashcroft[7] gave the matter of copyright history First Amendment importance.  Second, despite longstanding claims[8] that copyright law and the First Amendment did not conflict with one another due principally to copyright’s idea-expression dichotomy and the doctrine of fair use, the Court in its 2011 Term considered whether a provision of the U.S. Copyright Act should be struck down because it violated the First Amendment’s protections of freedom of speech.[9]  Thus, it appears, after decades of reluctance and much prodding by copyright scholars,[10] the federal courts are being dragged toward a realization that copyright law is not “categorically immune from challenges under the First Amendment.”[11] In Golan, those challenging the Uruguay Round Agreements Act as a violation of the First Amendment contended that “[h]istory and tradition tell a different story” with respect to Congress’ removal of works from the public domain than with the series of copyright term extensions culminating in the Sonny Bono Copyright Term Extension Act that was challenged in Eldred.[12]  In advancing their argument that “Section 514 privatized public speech rights,”[13] the petitioners noted that the House of Lords in Donaldson“held the time limitations in the Statute of Anne cut off any common law copyrights the stationers might have held in published works.”[14]  The Government, meanwhile, argued that the Uruguay Round Agreements Act did not alter the traditional contours of copyright law, and thus no First Amendment scrutiny should be applied.[15]  This argument hinged in part on the contention that, when Congress passed the first Copyright Act in 1790, it took many works out of the public domain and brought them within copyright protection.[16]  Hence the question in Donaldson—whether works could have common law copyright protection even after statutory protection has expired—remains relevant today. This article contends that understanding the “traditional contours”[17] of copyright law requires more than superficial references to modern fair use and the idea-expression dichotomy.  A careful reading of eighteenth-century sources reveals concerns that copyright threatened the structure of mass public communication that emerged after the system of licensing expired in the late seventeenth century.  Although eighteenth-century political philosophers, lawmakers, and jurists may not have had a modern conception of individual free speech rights as they came to exist under the First Amendment, at least some of those early policymakers and commentators did appreciate the value of communication unfettered by public or private censorship and control.[18] In this article, the relationship between copyright and free speech is explored through a re-examination of the Donaldson v. Beckett case.  In Part I, the article reviews what modern scholars already have said about Donaldson as it relates to the eighteenth-century relationship between freedom of the press and copyright.  Parts II and III re-examine accounts, primarily in newspapers, of the Donaldson decision in the House of Lords in 1774.  The news accounts reveal some concern for the implications the case would have on freedom of the press, a topic that greatly affected the late eighteenth-century newspapers themselves.  Based on a close re-examination of contemporary accounts of Donaldson, Part IV presents considerations for today’s federal judges when applying—as they may be asked to do more frequently in light of Eldred and Golan—the “traditional contours” test championed by Justice Ginsburg’s majority opinion in Eldred.  The article’s conclusions are applicable to Golan and should be of relevance to future disputes about copyright and free speech.  

I. Scholarly Views on Donaldson v. Beckett

Generally speaking, American scholars and jurists have exhibited a relatively superficial and poor understanding of Donaldson v. Beckett.[19]  Some of these misperceptions are understandable in light of the confusion and errors found in the supposedly authoritative eighteenth-century legal reports of Donaldson.  In the history of American perceptions of the debate over English common law copyright, special mention must be given to James Madison’s The Federalist No. 43, first published in New York newspapers in early 1788.[20]  In No. 43, Madison argued that the proposed federal government should have exclusive jurisdiction over copyright law, a topic that most of the colonies already had addressed in their own laws.  In doing so, Madison wrote that the proposed Constitution’s Copyright Clause[21] created a federal government power that “will scarcely be questioned” and that “[t]he copyright of authors has been solemnly adjudged in Great Britain to be a right of common law.”[22] Written as it was in 1788, it is unclear whether The Federalist No. 43 accurately reflected all developments in English law up to that point, including the decision in Donaldson 14 years earlier.[23]  However, even if Madison’s description of the state of English common law would be considered mistaken today, it would be difficult to fault him for restating the understanding of his time.  Due to an error in the reporting of advisory opinions by common law judges,[24] Madison and his contemporaries understandably could have described Donaldson as holding that a common law copyright did exist.  It must also be recalled that Madison’s Federalist No. 43 was a rhetorical and propaganda device to persuade colonists that the proposed Constitution’s Copyright Clause was in line with their common law history, and therefore it was in Madison’s interest to say that British common law included copyright protection.[25]  In addition, the 1783 edition of Blackstone’s Commentaries, which would have contained a report of Donaldson, may not have been available to colonial lawyers until after the Revolutionary War, and so American colonists may have continued to apply the precedent of Millar v. Taylor long after British judges had abandoned it in Donaldson.[26] While Donaldson has been called a case in which there was an answer but no rationale,[27] some modern scholars have argued that the real logic of the case was that common law copyright did not exist.[28]  If it is the case that Donaldson stood for the fact that a common law copyright did not exist, then Madison—like Burrow, the official case reporter—got it wrong.   Madison’s mistaken belief was then cited by the influential early U.S. Supreme Court case Wheaton v. Peters.[29] In the course of its opinion in Wheaton, the Supreme Court discussed Donaldson but may have perpetuated several errors.  In Wheaton, the Court had to determine whether a common law copyright, if it existed in the United States, had been violated, as well as whether a violation of the U.S. Copyright Act had occurred, in an infringement claim involving the copying of its own reported decisions. Having cited and relied exclusively on Burrow, which did not contain the speeches of the lords, the Supreme Court mistook the advisory opinions of the common law judges for the rationale of the case.[30]  Second, again relying on Burrow, the Court was misled into thinking that six of the 11 advisory judges had said the common law copyright was superseded by the Statute of Anne,[31] when in fact six of the 11 judges (the difference being Nares, whose vote was misreported in Burrow) had said the common law copyright was not superseded by the Statute of Anne.  Hence Wheaton mis-described the holding of Donaldson in a way that would be followed many times subsequently by jurists and scholars.  In the end, Wheaton concluded that while there was a common law right of first publication, there was not a perpetual common law copyright in the United States that would continue to exist after publication; at the point of publication, the rights available to an author were through the Copyright Act alone.[32] The author and three graduate students reviewed all 271 journal and law review articles in the U.S. version of Westlaw’s “Journals and Law Reviews” database that cite Donaldson v. Beckett (or Becket, as the spelling is sometimes rendered).[33]  The review demonstrated significant confusion in the legal scholarship over the rationale and holding of Donaldson and showed that at least some of this confusion comes from errors and omissions in the eighteenth-century legal reports.  Nearly 80 percent of the U.S. law review articles cite only to Burrow, only to Brown, or to Burrow and Brown together.  Although they are the most common versions of Donaldson to be cited, Burrow and Brown are the least comprehensive and least accurate of the five reported versions of the case.[34]  It has been well-documented by Abrams,[35] Deazley,[36] and Rose[37] that Burrow perpetuated an error regarding the vote of a judge named Nares, and that has had a significant impact on how the case has been perceived during more than 235 years. Burrow does not include the speeches by the lords, and Brown does not report the speeches by either the lords or the judges.  Thus neither of them is particularly useful in actually understanding the rationale of Donaldson.  The fact that Burrow reports the speeches by the judges but not the lords has contributed to the tendency of some American scholars, accustomed to reading judicial rationales in written opinions, to mistake the advisory opinions of the judges for the binding logic of the lords, the ultimate decision-makers in the case.[38]  Only about 12 percent of American legal journal articles cite the Parliamentary History, the Gentleman’s Report, or the Anonymous Report, even though those versions of the case are more accurate and complete than either Burrow or Brown.  Nearly 10 percent of the articles discussed Donaldson but cited no version of the actual case; instead, these articles either cited no source or cited a secondary source, such as a journal article or book, in referencing Donaldson (see Appendix). Modern American legal scholars describe the holding of Donaldson v. Beckett in three major ways (see Appendix).  About a fifth of the articles said the case held that no common law copyright existed at all.  This is the meaning of Donaldson that has been most recently advocated by experts who have closely examined British copyright history, including the British scholar Ronan Deazley.[39]   Meanwhile, another fifth of the articles focused their description of Donaldson on the general idea that publication of a work cut off some form of common law right.  The third major description of the case by journal authors was that Donaldson held or recognized that common law rights were superseded by the Statute of Anne; some form of this description was present in nearly 30 percent of the articles.  The remaining articles either did not describe the holding or merely noted the confusion surrounding Donaldson’s meaning.  In summary, then, as many as half of American law journal article authors seem to have misunderstood that the House of Lords decided against the common law right. Of course, there are notable exceptions to the general rule that American scholars have struggled to understand Donaldson.  For example, Mark Rose, an English professor at the University of California at Santa Barbara, has written extensively and perceptively about the history of copyright, and discussed the importance of the Donaldson case for understanding British and American roots of copyright law.[40]  Before Rose, Howard Abrams wrote that, had the U.S. Supreme Court justices truly understood Donaldson v. Beckett at the time they decided Wheaton in 1834, the path of American copyright law may have been altered significantly.[41] And before Abrams, Lyman Ray Patterson conducted a sophisticated review of copyright law history including Donaldson.[42] For the most part, however, these authors have not discussed Donaldson in the context of what it offers for understanding the eighteenth-century view on the relationship between freedom of the press and copyright.  Rose, for example, only briefly mentions Effingham’s speech in two sentences.[43]  Abrams gives similar cursory treatment to the Effingham statement.[44]  Deazley, though, noted Lord Effingham Howard’s “fear . . . of unchecked political suppression” and also pointed out that Effingham was not the first eighteenth-century English jurist to express concern that copyright might interfere with public communication.[45] Deazley noted that, in an earlier case brought against Donaldson by London booksellers, Lord Chancellor Northington declined to extend an injunction against Donaldson because, in his observation, a “perpetual property” in books “would give [booksellers] not only a right to publish, but to suppress too,” and, Northington said, “this would be a fatal consequence to the public.”[46] Many scholars have written well about the general relationship between copyright and free speech.[47]  A smaller number of these analyses have cited Donaldson in contribution to the historical understanding of that relationship,[48] but very few American scholars have discussed Effingham’s speech specifically.  Among those that have done so, Diane Leenheer Zimmerman wrote that Effingham voiced a “modern-sounding concern” about freedom of the press.[49]  In another article, Zimmerman wrote that although the general understanding of copyright law in the eighteenth century focused on societal goals and benefits rather than individual rights, Effingham stood out for his effort inDonaldson to champion the cause of individual rights in the face of a potential perpetual copyright monopoly.[50] Mark Rose pointed out, in the context of a discussion about Eldred, that Effingham and others in the eighteenth century recognized that “treating writing simply as property,” rather than constitutionally protected expression, would lead to the private control of printing through copyright law in much the same way the government previously controlled printing through licensing.[51] Effingham, Rose said, urged “that affirmation of a common-law right of literary property could provide a dangerous foundation for censorship.”[52] Effingham’s hypothetical about a despotic prince or minister using copyright law to suppress information contrary to his own interests “might appear somewhat far-fetched at first glance,”[53] Zimmerman wrote, but in reality, Effingham proved prescient.  Zimmerman cited the examples of Howard Hughes, L. Ron Hubbard and J.D. Salinger, who—while not exactly despotic ministers and princes—were influential figures who attempted to use modern copyright law to suppress undesirable information about themselves.[54] Queen Elizabeth II famously extracted a front-page apology and a £200,000 charitable donation from Rupert Murdoch’s Sun newspaper after she threatened to sue for copyright infringement because the newspaper published the text of her Christmas Day 1992 address two days early.[55] “Public pronouncements do not belong to anybody,” the newspaper’s editor had complained futilely.[56]  Indeed, in today’s world, “aggressive copyright claims” may often succeed in silencing a political or commercial rival through the use of preliminary injunctions even though a substantive infringement claim might be weak.[57]

II. Alexander Donaldson and the Crusade Against Speech Monopoly

Alexander Donaldson’s background proves beneficial in explaining the context in which he rose to prominence and became involved in not just one case, but in a series of copyright litigation efforts.  Even before Alexander Donaldson was born, his grandfather experienced firsthand the perils of publishing a newspaper without broad legal and societal free press guarantees.  Capt. James Donaldson already was a satirical poet and author of several pamphlets when, in 1699, he received permission from the Privy Council to begin publishing the Edinburgh Gazette newspaper.[58]  He was briefly jailed at one point for publishing false statements, but gained his release upon promising to allow the Privy Council to censor his newspaper in the future.[59]  Capt. James Donaldson’s grandson, Alexander, entered the bookselling business in 1750, while still in his early twenties. With John Reid, Alexander Donaldson owned and operated a bookshop in Edinburgh.  He also ran a bookshop in London with his brother John, until their partnership dissolved in 1773.[60]  Donaldson forged a reputation, as a bookseller, for selling cheap editions of books for which the statutory period of copyright had expired.  This made him the subject of both praise and criticism, and he was even compared to Robin Hood for his efforts to disseminate previously copyrighted information at low cost.[61] Donaldson launched the Edinburgh Advertiser with Reid in 1764, and served as editor and publisher of the newspaper until the beginning of 1774, when he turned the operation over to his son, James.  Donaldson’s launch of the Advertiser was attributed to his public-spiritedness and enterprising nature, as he recognized a commercial opportunity.[62]  On the first page of the first edition, dated Tuesday, January 3, 1764, Donaldson and Reid wrote that the Advertiser was intended to be published on Tuesday and Friday to take advantage of the fact that no other newspapers were printed in Edinburgh on these days, yet mail delivery arrived from London on these days and so there was news to convey.[63]  In stating their purpose of publishing the newspaper, Donaldson and Reid wrote:
Beside what are properly called news, the editors will give the utmost attention to whatever regards religiontrade, manufactures, agriculture, and politics in Great Britain, and Ireland, and the colonies thereto belonging; and will be careful to insert the best and most accurate accounts they can procure of all important transactions, interesting anecdotes, and useful discoveries, in every part of the British dominions. Nor shall the article of Entertainment, for which there is so large a demand, be unregarded. Essays on useful, ingenious, and entertaining subjects, both in prose and verse, if well wrote, and of moderate extent, will be thankfully received and readily inserted.[64]
On the first day of publication, Donaldson and Reid criticized the other Edinburgh newspapers, all of whom refused to publish an advertisement announcing the launch of the Advertiser.[65]  Within two months, Donaldson and Reid gave a lengthy invitation to and justification of advertising, saying that old notions about the disreputable nature of having one’s personal or business name appear in a public print should be discarded.[66]  The editors defended the value of the London Gazette, an official government newspaper, which may not have had independent editorial copy but did, they said, communicate some news and advertising to the public and also had spawned other, independent, newspapers throughout Great Britain.[67]  The Advertiser was printed in quarto size, and, with an index published every six months, could be bound and preserved, thus enhancing its shelf life and value to readers and advertisers.  Within six months after its first publication date, the Advertiser was apparently financially stable and had been received well throughout Scotland; in writing to thank his subscribers and advertisers, Donaldson recommitted himself to “the utmost care . . . to insert the best essays and most interesting articles of intelligence that may occur.”[68] In his public writings as editor of the Advertiser, at least, Donaldson’s concern for profits eventually subsided in favor of a focus on editorial quality and independence.  By the end of 1764, Reid had left the Advertiser and Donaldson remained alone as editor and proprietor.  On the final day of 1771, he wrote a remarkable letter to readers acknowledging that newspapers might make mistakes, but asking readers to forgive them and warning government officials to refrain from both censuring and censoring:
If we have occasionally married couples without the privity of friends or relations, without the publication of banns, or even the consent of the parties themselves, it can be no secret to our fair readers that frequent examples of matrimony are absolutely necessary in this licentious age. If we have sometimes dismissed people of quality from the world, without asking leave of the college of physicians, the joy of their friends will prove the greater when they are raised to life in the succeeding paper. If we have been sometimes more in haste to decide a cause than the lawyers themselves, we have thereby placed before them an example, which all ranks of his Majesty’s subjects would concur in recommending to their notice. In fine, if we have given children to the barren, riches to the poor, or preferment to the undeserving, we have only done that for them, which intrigue, chance, or interest will frequently bring about; with this advantage in favour of all parties, that the progeny we bestow will cost nothing in education, the wealth we dispense may be retained without care, and the honours we confer be received without disgrace to the donor. As fickle as is fortune, we are favourable to all in their turn, and (as Macheath says) the wretch of to day may be happy to morrow)—in the EDINBURGH ADVERTISER.[69]
Donaldson continued by writing that the Advertiser was “open to all parties and influenced by none,” mentioning specifically that some had accused his editorial approach of having been “too ministerial” while others charged him with being too critical of British government ministers.[70] In 1764, Donaldson publicly distributed an essay uncovering the scheming ways of London booksellers against Scottish booksellers like himself.  Attached to the essay, Donaldson also published the text of several letters from London booksellers that exposed their schemes.[71]  Letters by this time had been judged to be the intellectual property of their authors,[72] and so this act by Donaldson both provided the potential for a copyright infringement lawsuit and represented a manifestation of his belief in freedom of the press from private control.  Donaldson was determined to invest in copyright litigation in order to protect future bookselling opportunities, and he pursued litigation vigorously. The Court of Session, Scotland’s highest court, decided in Donaldson’s favor on July 28, 1773, in a copyright case brought by a London printer named John Hinton.[73]  Hinton had sued Donaldson for copyright infringement after Donaldson and other Scottish printers published approximately 10,000 copies of Thomas Stackhouse’s A New History of the Holy Bible between the years 1760 and 1770.[74]  The Scottish court held that there was no perpetual common law copyright, or right of “literary property,” and that Donaldson had not infringed the Statute of Anne because the statutory copyright term for Stackhouse’s work had expired.[75]  Later, in the run-up to the House of Lords’ hearing in Donaldson v. Beckett, Donaldson used his newspaper, as well as advertisements in other newspapers, to publicize his victory over Hinton.  Donaldson paid for advertisements in the classified ad section of London newspapers announcing that he was selling copies of the Scottish Court of Session decision.[76] Eleven of the twelve Court of Session judges[77] who gave their opinions in Hinton favored Donaldson, and for several of them the only reason for pause was an English Court of King’s Bench decision issued in 1769.  In that case, Andrew Millar sued Robert Taylor for publishing unauthorized copies of the poem The Seasons by James Thomson.[78]  After hearing arguments on behalf of the booksellers by the famous legal commentator William Blackstone, the Court of King’s Bench relied on a series of licensing acts, the system of letters patent granted by the Crown, the prerogatives and processes of the Stationers Company, and several Chancery Court injunctions to conclude there was a common law right of literary property.  Lord Chief Justice Mansfield, a recognized authority with whom even the Scottish Court of Session judges were loath to disagree, delivered the holding that the common law right existed “before and independent of” the Statute of Anne.[79] Taylor was enjoined from printing or selling copies of The Seasons.[80] As with Millar v. Taylor, the case of Donaldson v. Beckett was brought by London booksellers for unauthorized publication of Thomson’s The Seasons.[81] On the same day Donaldson’s classified advertisement was published, one of the newspapers in which it appeared also published in its editorial columns a report that lawyers representing Donaldson before the House of Lords had requested the beginning of arguments in the case be delayed a week until Friday, February 4, 1774.[82]   Intended or not, the delay gave Donaldson the opportunity to print and begin selling copies of the Scottish Court of Session decision in Hinton prior to the House of Lords’ hearing.[83] The Public Advertiser, the newspaper that published both the classified advertisement and the editorial report about Donaldson, had lifted its editorial copy about the case verbatim from another London newspaper, the Morning Chronicle and London Advertiser.  In fact, much of the content of eighteenth-century London newspapers consisted of passages reprinted from other newspapers, both foreign and domestic.  News content was expressly not protected by copyright under the Statute of Anne, and the London newspapers reporting on the great eighteenth-century literary property debate culminating with Donaldson v. Beckett borrowed liberally from one another’s editorial columns.  This tendency for newspapers to print verbatim copies of others’ material—as well as the public anticipation for the House of Lords’ consideration of Donaldson v. Beckett—was on clear display in the first days of February, 1774, when at least three London newspapers said the case “materially affects the Literature of this Country, as well as the Property of many Individuals, to an immense amount.”[84]  One newspaper, the Morning Chronicle and London Advertiser, took such interest in the case that it printed transcripts of the proceedings for nearly three weeks and, even before the arguments began, reproduced Lord Mansfield’s lengthy opinion given five years earlier in Millar v. Taylor.[85]

III. Donaldson v. Beckett Re-Examined

Given the importance of Donaldson v. Beckett as well as the misunderstandings surrounding it, a detailed review of the facts and legal arguments in the case seems to be in order.  This is particularly so in light of the importance placed on copyright history by the Supreme Court in Eldred and the task before the Court in its 2011 Term case of Golan.  This re-examination relies heavily on contemporary newspaper accounts, a source not made the subject of original examination by most copyright history scholars, with the exception of Rose.  Even Rose discussed only a small number of the scores of articles published about the case in London and Edinburgh newspapers in January and February of 1774.  The newspaper articles provide a particularly relevant accounting of the case, given that Donaldson was a newspaper publisher and that they reveal the newspapers’ own perspectives about freedom of the press in the first century after the expiration of government licensing.[86] Furthermore, Donaldson v. Beckett appears to have been one of the first judicial proceedings in the House of Lords covered “gavel-to-gavel” by newspapers.[87] Before it came to the House of Lords, the case of Donaldson v. Beckett had been heard first in the Court of Chancery.  Upon initial filing of the case in 1771, a temporary injunction was granted, and the injunction was made permanent in 1772 by Lord Chancellor Apsley,[88] another of the law lords who, like Mansfield, would play a key and unexpected role in the House of Lords’ later consideration of the case.  Given that Thomson’s collection of poems was first published in 1730, and that the Statute of Anne granted a 14-year term with another 14-year renewal possible if the author was still alive, statutory copyright protection had expired by 1768, when Donaldson printed the copy of The Seasons at issue in Donaldson v. Beckett.[89] Under its eighteenth-century rules, the House of Lords reviewed Apsley’s decree de novo.  As Lord Chancellor sitting in his role as Speaker of the House, Apsley presided over the case but the ultimate decision rested with the entire House of Lords,[90] whose members were sometimes called “peers.” Those lords who were not law-trained had equal say with those who were, but in practice the lay lords deferred to the law lords on most cases.[91] In addition, the lords could—as they did in Donaldson—request legal advice from common law judges via “writs of assistance” on certain specific questions.[92] The role of the common law judges from the courts of King’s Bench, Common Pleas and Exchequer[93]—to give their opinions on specific questions posed by the lords but not to decide the case themselves—is critical and appears to be misunderstood by many modern American legal commentators, who view the judges’ opinions as justifications by the actual decision-makers rather than just advisory statements by external actors.  Copyright scholar Ronan Deazley expressed the relationship between the lords and the judges on such occasions:
The lords, when faced with a particularly complex or difficult legal issue, could call upon the common law judges to proffer expert advice for the consideration of the House. The judges, if summoned, took up their position upon the woolsack, a position that was not considered to lie within the limits of the House. As a consequence, technically they “had no voice in the House” and could not give an opinion “unless formally asked for”. When they were asked for an opinion, if unanimous in their thinking, the senior judge present would deliver a collegiate address. If, however, there existed disagreement then the judges would be asked to answer the lords’ questions, each in turn, in order of increasing seniority.[94]
What follows is a daily summary of the appeal taken primarily from contemporaneous newspaper accounts, with particular focus on aspects of the case relating to press freedom.

A. Day 1: Friday, February 4, 1774

Prior to the House of Lords’ first day hearing the case on February 4, 1774, London society had anticipated the outcome of the case with much anxiety.[95] Although it became clear in December 1772 that the House of Lords eventually would hear the case, it was for about a year in the hands of a University of Oxford law professor for “perusal and approbation.”[96]  The Oxford professor apparently was assigned as special master to determine the amount of money the petitioners had derived from sales of copies of The Seasons and thus the amount they should pay to the London bookseller Beckett.[97] As the appeal in the House of Lords finally neared, London newspapers diligently kept their readers abreast of “[t]he great cause of literary property.”[98]  In explaining its decision to reprint the lengthy Lord Mansfield opinion from Millar v. Taylor in two parts, the Morning Chronicle and London Advertiser just two days before the House of Lords took up Donaldson explained that “the public cannot be too well apprized [sic] of the peculiar nature of the question.”[99] The extent to which the debate over common law copyright roiled and divided the English legal community in the eighteenth century was evidenced by Mansfield’s statement, reprinted in the newspaper during the days leading up to the House of Lords hearing, that Millar v. Taylor was the first time the Court of King’s Bench had failed to reach unanimity in his time there.[100] On the first day of the Donaldson appeal, a letter-to-the-editor writer called “A Friend to Literature” anticipated some of the arguments that would be made against common law copyright: The writer noted that London booksellers had been paying authors for copyrights “from the day of Shakespeare to our times” and therefore it was evident common law copyright existed long before Parliament adopted the Statute of Anne in 1710.[101]  Further, the writer said, literary property may well have established a monopoly but no more so than any other form of property ownership.[102]  The author said Donaldson and other Scottish booksellers would never “give a shilling in their lives to the encouragement of literature” and that “plunder, and temporary subsistence is all their aim.”[103]  Finally, the letter writer made an economic argument in favor of common law copyright, saying the failure to enforce it would cause legitimate copyright owners and booksellers to sell their works initially at exorbitant prices because of the expectation they would thereafter be pirated.[104] A large crowd of people reportedly had to be turned away on the first day due to lack of room in the House of Lords.[105]  On that first day, the House of Lords heard just one advocate: Edward Thurlow,[106] the Attorney General, arguing on behalf of Donaldson.  The newspapers described Thurlow’s remarks as “a long and eloquent speech”[107] against literary property, or perpetual common law copyright, in which he “declaimed against monopolies of that nature as repugnant to law.”[108] In February 1774, Thurlow was a 42-year-old lawyer on the ascendancy.  He and Dunning, despite their positions on opposite sides of the copyright litigation and their sharp critiques of one another’s arguments, were known to be close associates.  Thurlow’s arguments before the House of Lords on behalf of Donaldson were summarized in general form by Brown, together with and undifferentiated from those of his co-counsel, Sir John Dalrymple.[109]  Burrow contains no report of Thurlow’s remarks or any others made by the lawyers in the case.[110]  The Parliamentary History contains a third-person account of Thurlow’s remarks, which were said to be focused on the nature of property and whether such a thing as literary property could even exist or was “too abstruse and chimerical a nature to be defined.”[111]  Thurlow appealed to history, stating that if there had been a common law or natural right, then royal “grants, charters, licenses, and patents” would not have been necessary and neither would the Statute of Anne itself.[112]  The Anonymous Report contains a third-person account similar to that of the Parliamentary History,[113] but the Gentleman’s Report conveys what purports to be a first-person transcript of Thurlow’s remarks.[114] The newspapers focused on Thurlow’s discussion of previous Chancery Court injunctions in favor of booksellers with respect to the unauthorized publication of the anonymous seventeenth-century work “Whole Duty of Man” as well as works by Milton, Pope, Swift and others.[115]  Thurlow argued these injunctions were based not on a common law right of copyright but rather government printing patents and the prerogatives of the Stationers’ Company.[116] The Edinburgh Advertiser reported that Thurlow had referred to the Scottish Court of Session decision in Hinton v. Donaldson.[117] Thurlow’s arguments about the nature of property provoked strong public response from a newspaper reader, whose letter to the editor the following week expressed chagrin and surprise that the literary products of geniuses such as Shakespeare, Milton, Bacon, Newton, Pope, Locke and Addison could not be bequeathed to their posterity perpetually, but that other individuals could bequeath such mundane property as a windmill, fish pond, coal pit or lead mine.[118]  Other letters-to-the-editor displayed similar sophistication in responding to Thurlow’s arguments and those of Sir John Dalrymple, which would follow on Monday.  One, for example, evoked natural rights and a notion of the modern right of integrity,[119] which predominates in European moral rights regimes and appears in the Berne Convention for the Protection of Literary and Artistic Rights.[120]  Others expressed their support for copyright in terms of economic incentives to benefit the public.[121]

B.  Day 2: Monday, February 7, 1774

As with the remarks by Thurlow, the arguments made by Sir John Dalrymple on behalf of Donaldson on February 7 were reported in brief summary form by Brown and completely ignored by Burrow.  The record that later appeared in the Parliamentary History is very similar to a detailed third-person newspaper account[122] published in the days immediately after the speech.  Meanwhile, another, less-detailed newspaper account[123] seems to have been the basis for the version rendered in the Gentleman’s Report and a substantial part of the Anonymous Report. Dalrymple’s speech,[124] though given little or no attention by Brown and Burrow, is singularly important because it provides a window to understand the contemporary view of the issue at stake in Donaldson, a topic of later confusion.  Several newspapers reported Dalrymple’s speech as emphasizing that “the point principally to be contended” in the Donaldson case was that the common law had never granted a property right to either bookseller or authors.[125]  On this point, Dalrymple stated that the booksellers lobbied in favor of passage of the Statute of Anne precisely because they knew they did not already have a common law property right.  It would have made no sense, Dalrymple said, for the booksellers to have lobbied for a 14-year copyright in the Statute of Anne if they already owned a perpetual right under the common law: “They knew their own situation,” Sir John told the lords.  “They knew the rottenness of their pretended right, and wanted a new real one, instead of the old imaginary one.”[126]  Dalrymple noted the Statute of Anne said it “vested” or “secured” a right, and that language would not have been present if the common law right already existed.[127] Dalrymple might have contributed to the confusion that surrounds Donaldson—including on the part of the judges and the lords—and continues to mystify legal scholars.[128]  Although his main point of contention was that English common law, like that of Scotland and every other “civilized nation . . . under the canopy of heaven”[129] did not recognize a common law copyright,[130] Dalrymple also made an alternative argument.  Ideas, Dalrymple said, might belong to the individual who has them as long as that individual keeps them secret.  Once published, however, those ideas no longer belong to that individual.[131]  It was perhaps from this line of argument—Dalrymple’s emphasis that the Statute of Anne affected a sea change along with his discussion of the impact of publication of ideas—that grew the sentiment that the real issue in Donaldson was not whether a common law right existed in England but rather whether the common law right that surely existed was abrogated or preempted by publication of literary works.[132] The newspapers also reported that at least a portion of Dalrymple’s argument centered on freedom of the press.  According to William Woodfall’s account in the Morning Chronicle,[133] Dalrymple “investigated the commencement and the secrecy attending the commencement of the art of printing, as well as the mode then taken by the printers to secure their property by patents, licenses, and Star Chamber decrees.”[134]  He observed that there was nothing so powerful in the political process as the press and said that the British monarchy had realized this early in the history of printing.  The monarchy had to account for the fact that “free use of the press must be finally dangerous to themselves” and so the Crown colluded with the booksellers to create the system of licensing that prevailed until 1694.[135]  In this way, he said, the Crown could exercise full control over the content of mass communication, much as it had done in the previous century with licensing.

C.  Day 3: Tuesday, February 8, 1774

Solicitor General Alexander Wedderburn began presentation of the case for perpetual common law copyright on February 8.[136]  In his remarks, Wedderburn appealed to both natural law and a public benefit rationale.[137]  Wedderburn cited the 17th century Dutch jurist Hugo Grotius, who quoted the Roman lawyer Paulus in saying one who invented an object was the owner of it.[138]  Wedderburn showed the lords a copy of the original grant by King James to the booksellers to print some of his poems, with the suggestion being that James would not have attempted to give the booksellers a literary property right he did not possess.[139] Later that day, the lords heard from John Dunning on behalf of the booksellers.  Dunning had served as solicitor general prior to Thurlow, and in 1768 Dunning had been elected to the House of Commons.  Colleagues called him a brilliant lawyer and “the foremost advocate of his day.”[140]  Dunning was described by the newspapers as “having a violent Cold upon him”[141] that caused him to be hoarse and difficult to understand.[142]  Dunning, apparently responding to Dalrymple, said it was not reasonable to conclude that mere publication could deprive a literary property owner of his or her right.[143]

D.  Day 4: Wednesday, February 9, 1774

On February 9, Thurlow was allowed one hour and 45 minutes to respond to the arguments that had been made by Wedderburn and Dunning.[144]  Following Thurlow’s reply, Lord Chancellor Apsley directed that three questions be asked of the common law judges, who would render advisory opinions to assist the lords in deciding the case.  Lord Camden then posed two additional questions to the judges.  These questions and the judges’ subsequent responses have spawned a great deal of commentary and confusion.[145]  There appears to be some dispute surrounding even the newspapers’ contemporary reports of the questions.  Woodfall’s Morning Chronicle, for example, assured readers that all the other newspaper accounts of the questions were in error and that only the Morning Chronicle’s reporting could be trusted as accurate.[146] In fact, there are significant differences between the questions as rendered by the Morning Chronicle, on the one hand, and three other newspapers, on the other hand.  According to the Morning Chronicle, Lord Chancellor Apsley repeated his three questions to the judges twice:
  1. Whether at Common Law, the author of any literary composition had the sole first right of printing and publishing the same for sale, and could bring an action against any person for publishing the same without his consent.
  2. If the author had such right originally, did the law take it away upon his printing and publishing the said book or literary composition, or might any person re-print and publish the said literary composition for his own benefit, against the will of the author.
  3. If such action would have laid at Common Law, is the same taken away by the Statute of Queen Ann?  Or is an author precluded by such statute from any remedy, except on the foundation of the said statute?[147]
Meanwhile, the London Evening Post rendered Apsley’s questions differently, and two other publications[148] mimicked this version:
Question I. Whether the author of a book, or literary composition, has a common law right to the sole and exclusive publication of such book or literary composition? Q. II. Whether an action for a violation of common law right will lie against those persons who publish the book or literary composition of an author without his consent? Q. III. How far the statute of the 8th Queen Anne affects the supposition of a common law right.[149]
The London Evening Post version omits the middle question about whether a common law right, if one existed, was taken away upon printing and publication of a work.  In the London Evening Post’s rendering, the first two questions are redundant and the third is less precise than in the report of the Morning Chronicle.  All of the legal reports—Brown, Burrow, Parliamentary History, Gentleman’s Report and Anonymous Report—follow in substance the Morning Chronicle’s account of the three questions posed by Lord Chancellor Apsley.  But, as will be seen, at least one of the judges apparently understood the question to be the one printed in the London Evening Post and not the one in the Morning Chronicle. Immediately after the three questions were put to the judges by Apsley, Lord Camden posed two additional questions.  Although Camden’s questions may seem repetitive of those posed by Apsley, modern scholars have noted that Apsley’s questions focused on the rights of authors while Camden’s questions focused on the rights of booksellers or printers who purchased copyrights from authors.[150]  This is related to the fact that Camden’s questions refer both to assignees and to a perpetual common law copyright that could, at least in theory, continue in force even after statutory rights have expired.  Once again, the Morning Chronicle version of the questions was followed in substance by the five reported versions in Brown, Burrow, Parliamentary History, Gentleman’s Report and Anonymous Report (and this time, there was no significant difference in the other newspapers’ version):
Whether the author of any literary composition, or his assigns, had the sole right of printing and publishing the same in perpetuity by the Common Law? Whether this right is any ways impeached, restrained, or taken away by the 8th of Queen Ann?[151]
Although the judges would not begin giving their opinions on the questions for nearly a week, it did not take that long for London citizens to begin chiming in with their own answers to the questions posed by Apsley and Camden.  Even before the judges could begin to respond in the House of Lords on February 15, a letter-writer called “Brecknock” wrote in the Morning Chronicle that the purpose of the Statute of Anne was to encourage authors to publish their works as soon and as often as possible within 14 years or the exclusive right to do so would be lost.[152]

E. Days 5, 6 and 7: Tuesday, February 15, 1774; Thursday, February 17, 1774; and Monday, February 21, 1774

A total of 11 judges, including two who were also members of the House of Lords, gave their opinions on the five questions posed.  Had they been unanimous, the judges apparently would not have had to speak individually but rather could have submitted a single recommendation to the lords.  But since they disagreed, the judges were given the opportunity by the lords to present their views in order from junior to senior.[153]  The opinions of the judges have confused many readers of Donaldson for centuries, but in recent years scholars such as Deazley[154] have made detailed efforts to document the judges’ views and to correct errors traditionally made in describing those views, even in the official reported versions of the case. The following summary of the judges’ advice to the lords, taken from contemporary newspaper accounts, is organized around the questions the judges had been asked to answer.  It should be noted that not all of the judges explicitly answered all of the questions put to them, and virtually none of the judges spoke at length about the distinction between the questions posed by Apsley and those posed by Camden.  In other words, the judges generally did not distinguish between the rights of authors and the rights of booksellers or printers.
1.  Was There a Common Law Copyright? (7 Judges “Yes”; 4 Judges “No”)
On this question the judges who answered “No” were Eyre,[155] Perrott,[156] Adams[157] and De Grey.[158]  Perrott and Adams (and probably De Grey) expressed the sentiment that manuscripts could be owned in their physical form and that this ownership would protect something like a right of first publication.  This right was not unique to expression but was a kind of possessory right of the type that would extend to other property; as Perrott expressed, “[a]n author certainly had a right to his manuscript; he might line his trunk with it; or he might print it.”[159]  Perrott also believed that “[i]f a manuscript was surreptitiously obtained, an action at Common Law would certainly lie for the corporeal part of it, the paper.”[160]  This could not be called a common law copyright, however.  Instead, De Grey described it as simply the power to do “what a man will with his own” and said it included the prerogative “of publishing or withholding from the world a literary composition.”[161]  Meanwhile, the seven judges who concluded there was a common law right were Nares,[162] Ashurst,[163] Blackstone,[164] Willes,[165] Aston,[166] Gould[167] and Smythe.[168]
2.  Was the Common Law Copyright Lost upon Publication? (7 Judges “No”; 4 Judges N/A)
All seven judges who believed there was a common law right also believed that it was not lost upon publication.  However, none of the remaining four judges clearly answered “Yes” to this question.  Although all five of the case reports—Burrow, Brown, Parliamentary History, Gentleman’s Report and Anonymous Report—put Eyre in the camp of judges who answered in the affirmative,[169] a newspaper account says Eyre argued “for an Hour and a Half, in a very strong Manner against Literary Property”[170] and therefore, in his view, there was no common law right for publication to take away.  A careful review of the various accounts of Eyre’s speech provides no basis for a conclusion that he answered in the affirmative on this question.  In fact, there seems to be widespread confusion about what question Eyre was answering.[171] One contemporary newspaper writer reported that Eyre’s vote was given in response to the second question as inaccurately described by the London Evening Post(whether an action could lie) rather than the version of the Morning Chronicle and the legal reporters (whether the right was lost upon publication).[172]  The Gentleman’s Report,[173] Anonymous Report[174] and Parliamentary History[175] all substantiate that Eyre said, in response to what he apparently thought was the second question, that an action could not be brought because there was no common law right.  Thus it appears Eyre never squarely addressed the actual second question posed by Apsley: whether any common law right that existed was lost on publication.  Burrow reports that Eyre said “if the author had such sole right of first printing, the law did take away his right, upon his printing and publishing such book or literary composition.”[176]  But there is no basis for this conclusion by Burrow in any of the narratives of Eyre’s arguments, including the newspaper accounts.  Given that Burrow made an error in recording Nares’ vote on the next question,[177] it seems likely that Burrow’s statement about Eyre’s vote on this question could also be erroneous. A letter-writer to the Morning Chronicle challenged Eyre’s view that there was no common law right.  The writer contended that the real danger to the public interest in free communication was that writers would not “bring the product of their ideas to public market” but would rather keep them unpublished and thereby monopolize those ideas.[178]  This would happen, the writer said, if the statutory and common law schemes for copyright were not sufficiently protective as to convince the author that publication was in his or her best interest. Like Eyre, the judges Perrott, Adams, and De Grey did not believe there was a common law right and did not squarely address this question.  To the extent they believed a right was taken away by publication, it was the possessory right of first publication and not the common law copyright, which for them did not exist.[179]
3.  Did the Statute of Anne Supersede the Common Law Copyright? (6 Judges “No”; 1 Judge “Yes”; 4 Judges “If right had existed, it would have been superseded”)
On this question, six of the judges who believed that the common law copyright existed answered “No” while only one judge, Gould, clearly answered “Yes.”[180]  Although modern observers place Eyre in the affirmative camp, his opinion might best be described as: “If a common law right had existed, it would have been taken away by the statute” since he so strongly believed there was no common law copyright at all.[181]  De Grey’s opinion was similar, given that he spent a considerable amount of time arguing that the Statute of Anne would have superseded the common law right if it had existed but he also concluded the common law copyright did not exist.[182]  Perrott and Adams expressed the same sentiment.[183] Nares’ negative vote was erroneously recorded as “yes” by Burrow.[184]  The Parliamentary History is internally contradictory, reporting on the same page that Nares voted both “yes” and “no” on this question.[185]  However, it is of particular importance to note that no fewer than seven London newspapers recorded Nares’ vote as negative.[186]  The importance of correctly placing Nares in the “no” group is that Nares is the swing vote who gives the judges supporting a common law right not superseded by the Statute of Anne the six votes necessary to constitute a majority among the eleven judges who spoke.[187]  Given that the lords ultimately did not follow the judges’ advice on this point (because they reversed the injunction that had been given against Donaldson), it has been argued that the lords’ holding against common law copyright is strengthened.[188]  In other words, if the lords had merely followed the advice of the judges, then the judges’ opinions would have been most important.  But since the lords rejected the advisory opinions of a majority of the judges, it is the lords’ statements that must be given priority.
4.  Was There a Perpetual Common Law Copyright That Authors Could Assign to Printers? (7 Judges “Yes”; 4 Judges “No”)
On this question the four judges who earlier stated there was no common law copyright again answered “No,” and the same seven judges who endorsed the common law copyright can probably be placed in the “Yes” category.  For most of these seven judges, the affirmative response is by implication because there was little discussion, according to the newspaper accounts, of how this question and the judges’ corresponding responses may have differed from the first question.[189]
5.  Did the Statute of Anne Supersede the Perpetual and Assignable Common Law Copyright? (6 Judges “No”; 1 Judge “Yes”; 4 Judges “If right had existed, it would have been superseded”)
Unsurprisingly, on this question the six “No” votes came from the same judges who answered “No” to the third question—those who believed that the common law copyright did exist, was not surrendered upon publication, and was not superseded by the Statute of Anne.  And again, the only judge to clearly answer “Yes” was Gould, while Eyre, Perrott, Adams and De Grey—the four who believed no common law copyright ever existed—are probably best classified as answering that the statute would have taken the common law right away if it had existed.[190] In an effort to summarize the sentiments of the judges, Deazley has placed them in three camps: (1) those who believed there was a perpetual common law copyright that was neither abrogated by the Statute of Anne nor given up by publication (Nares, Ashurst, Blackstone, Willes, Aston, and Smythe); (2) those who believed there was a right of first printing that was not a common law copyright but rather a kind of possessory right in the physical manuscript itself, but that this right disappeared after publication because of the Statute of Anne (Eyre, Perrott, Adams, and De Grey); and (3) one judge who believed there was a common law copyright but that it was superseded by the Statute of Anne (Gould).[191] However, based on review of the newspaper accounts, this article concludes four categories of judges should be identified: (1) those who believed there was a perpetual common law copyright that was neither abrogated by the Statute of Anne nor given up by publication (Nares, Ashurst, Blackstone, Willes, Aston, and Smythe); (2) those who believed there was a right of first printing that was not a common law copyright but rather a kind of possessory right in the physical manuscript itself, but that this right disappeared after publication (Perrott, Adams, and De Grey); (3) those who believed there was not a common law copyright but that, if one had existed, it would have been superseded by the Statute of Anne (Eyre, Perrott, Adams, and De Grey); and (4) one judge who believed there was a common law copyright but that it was superseded by the Statute of Anne (Gould).  The difference between this article’s categorization and Deazley’s is that, in this version, Perrott, Adams and De Grey each have been placed in two separate categories: one in favor of the possessory right of first publication and another for the alternative holding that, if a common law right had existed, it would have been superseded by the Statute of Anne.  Meanwhile, based on a review of the newspaper and other accounts showing Eyre did not vote “yes” on the real Question No. 2 but rather answered a different question, Eyre has been moved from the category of those who believed that publication resulted in loss of a common law right.  This seems to most accurately describe the four major ways of thinking about the case among the judges. Another way of viewing the opinions of the judges is that seven out of 11 (categories 1 and 4 above) concluded there was a common law copyright, and four judges (categories 2 and 3 above) concluded there was no common law copyright.  Significantly, six of the 11 judges believed the common law copyright survived the Statute of Anne, meaning that an author could assign rights to a printer in perpetuity and the printer could prevent others from publishing the work even after the statutory term of copyright protection had expired.[192]  Given this state of affairs at the conclusion of the judges’ advisory opinions, one does not blame supporters of the booksellers for declaring in the newspapers that they were “well pleased that the Question of Literary Property is likely to go in Favour of those who have in their Purchases treated it as such.”[193]  In reality, however, the lords had something else in mind. It is significant to note, especially in light of how the case has come to be perceived by American legal scholars, that only one judge—Gould—said there was a common law copyright superseded by the Statute of Anne.  Meanwhile, equally significant in light of modern interpretations is that no judge concluded there was a common law copyright given up by publication of the work in question.

F.  Day 8: Tuesday, February 22, 1774

After following the case closely and reporting on its numerous developments for more than two weeks, London newspapers were anxious for the decision by the House of Lords.  One newspaper reported that Lord Camden was “infirm” and yet contended for more than two hours that there was no common law copyright.[194]  He took the booksellers to task, calling them “monopolizers of letters” and “extinguishers of genius.”[195]  Camden agreed with Dalrymple’s argument and said authors write for fame only and judges interpret law, not make it—essentially concluding that no common law right existed.[196]  Apsley then seconded Camden’s motion to reverse the Chancery Court injunction Apsley had entered against Donaldson less than two years earlier.[197]  Apsley spent a considerable amount of time speaking “against his own decree” and showing “the specious grounds which he went upon before, and candidly confessed his conviction by a different opinion from that he had before given.”[198]  Apsley claimed that he had been bound in the Chancery Court to follow Millar but that he had no particular conviction in favor of common law copyright and after examining the legislative history of the Statute of Anne, thought it was clear that Parliament was against the common law right at the time of passage of the Act.[199] Lord Lyttleton said there was a common law copyright not superseded by statute while the Bishop of Carlisle was reported to have agreed with Camden that there was no common law right.  Meanwhile, Lord Effingham said there was no common law copyright because it would inhibit freedom of speech.[200]  One newspaper reported simply, “Lord Mansfield did not speak.”[201]  In summary, then, four of the five lords who spoke were of a mind that there was no common law copyright.  The House of Lords ultimately voted to reverse the injunction, either by voice vote or, in some accounts, a counted majority.[202]  One newspaper reported that “a great personage has expressed much satisfaction” at the decision but did not say who that great personage might be.[203]  One Londoner called Ben Button wrote to the editor of the St. James Chronicle, “The Lord above knows but I don’t what the Lords here below can mean by their Decision against Literary Property in Perpetuity….”[204] Finally, the newspapers related two tragically humorous stories—perhaps apocryphal—about the ramifications of the House of Lords decision.  The first involves a conversation between a bookseller and his lawyer, reported to have been heard in the lobby of the House of Lords immediately after the decision in favor of Donaldson:
Bookseller. And now, Sir, I am ruined;—my whole Fortune has been expended in Literary Moonshine. “Lawyer. The more a Lunatic you, to lay out your Money upon a Non-entity, a Phantom,—to give a something for nothing. “B. I thought it was Property; it was sold and conveyed to me as such; it has been esteemed so for sixty Years past: The Author would have libelled me if I had denied its being so; and I verily believed it was as much Property as what I gave in Exchange for it. “L. And so it is; you see what it is to deal with an Author; you now see your Money is no more your Property, than his Works which you bought of him. “B. This may be Sport to you; but it is hard to be ruined by a Decision on a doubtful Point. “L. Doubtful! The Law can never be doubtful; for every Peasant is presumed to know the Law, and therefore you cannot plead ignorance in Excuse for your Folly. “B. Was it so clear, Mr. Double-Tongue, when the Judges were divided in Opinion? [W]hen the Chancellor made the Decree which he afterwards reversed? [W]hen the Lords themselves were not unanimous? [W]hen— “L. Pfhaw, you know nothing of the Matter—this is the glorious Uncertainty of the Law. [Exit, chinking his Purse.] “BOOKSELLER folus. “B. The glorious Uncertainty of the Law—that which has proved my Ruin, and makes your Fortune—What shall I do? Shall I turn Pirate? For they and the Smugglers are more encouraged than the fair Trader, or Merchant—NO, I’ll turn Lawyer, there I cannot err, for the Ignorance of Law, which has ruined me, is a good Plea in the Professors; and my Friend’s glorious Uncertainty of the Law will make my Opinion as often right as the best of them.”[205]
The second story reportedly took place at Eton, and in it the teller notes the anger of the booksellers toward Mansfield, who, had he spoken, might have been able to change the outcome of the case:
An arch thing happened here a day or two ago, between a young lad of this school and an old woman who sold gingerbread and cakes. The young spark having made free with the dame’s gingerbread while the old woman’s back was turned, and being discovered, was very severely rated by her for making free with her property: the boy observing that what he had taken was alphabet gingerbread, cried out, that she was mistaken, it was not her property, for the House of Lords had lately determined there was no such thing as literary property, and therefore lettered gingerbread was from thenceforth common. The old dame was as angry at this speech, though she did not understand it, as certain lawyers were at a great man’s silence on this subject, which they did not understand, and determined to complain to the matter; but a friend of mine, who saw the affair, stepped in and paid for the gingerbread.[206]
The newspapers also reported that “ill consequences” were expected to result from the decision, and among those would be the discouragement of literature.[207]  Donaldson’s Edinburgh Advertiser, though, was ecstatic with the outcome.  Donaldson, who by then had given control of the newspaper over to his son, probably did not have a direct hand in all the Advertiser’s coverage of the case, and in any case the coverage was fairly objective.  But at the conclusion of the case, the Advertiser published a letter from London—one cannot help but speculate whether it could have been written by Alexander Donaldson himself—that made a concession to the joy of victory by publishing all the names of the booksellers who had lost the case.[208]


This re-examination of Donaldson v. Beckett, and the discussion of modern American scholars’ struggles to understand the meaning of the case, demonstrates that determining the “traditional contours” of copyright law may be difficult.  The Supreme Court did not provide guidance in Eldred v. Ashcroft on how the “traditional contours” of copyright may best be understood, and the issue is little clearer today than it was in 2003.  This article’s examination of Donaldson v. Beckett has shown that, at the time of the adoption of the first American Copyright Act by the U.S. Congress in 1790, the British House of Lords had made clear that English common law did not recognize a common law copyright after expiration of statutory rights.  It is also apparent through careful re-examination of the case that, while observers of and participants in eighteenth-century copyright legislation and litigation may not have shared a single clear understanding of Donaldson, the potential conflict between copyright and free public communication was not only recognized by newspaper readers, journalists, lawyers, judges and lords but at least some of those involved were genuinely concerned about the negative impact of copyright on freedom of the press.[209] The lessons learned from this history[210] can be of use to federal judges in reviewing free-speech-based challenges to copyright law.  One such challenge was heard by the Supreme Court in the 2011 Term in Golan v. Holder.  The Tenth Circuit addressed the First Amendment issue in the case, [211] and concluded that Congress had altered the traditional contours of copyright in 1994 when it passed the Uruguay Round Agreements Act, a law that sought to bring the United States in compliance with obligations under the Berne Convention for the Protection of Literary and Artistic Rights.[212]  In bringing the works of certain foreign authors from the public domain back into copyright protection, the Tenth Circuit said, Congress triggered First Amendment scrutiny.  One of the “traditional contours” of copyright, the court said, “is the principle that once a work enters the public domain, no individual—not even the creator—may copyright it.”[213]  Ultimately, the Court of Appeals held that the law survived First Amendment scrutiny because Congress demonstrated a substantial or important interest—to secure foreign copyright protection for American authors under Berne by granting copyright protection to foreign authors in the United States, even if their works were previously in the public domain—which was unrelated to the suppression of free expression and narrowly tailored.[214] Upon appeal to the U.S. Supreme Court, the orchestra conductors, educators and others challenging the law disagreed with the U.S. Solicitor General over what constituted the “traditional contours” of copyright.  The plaintiffs-appellants argued before the Supreme Court on October 5, 2011 that the Tenth Circuit was right when it said that a traditional contour of the U.S. Copyright Act was that works could not be taken out of the public domain and put under copyright protection.[215]  The United States, meanwhile, argued that First Amendment scrutiny would be applicable only if Congress took the extreme measure of doing away with fair use altogether, or abrogated the idea-expression dichotomy and gave copyright protection to mere ideas.[216]  A substantial part of the written briefs and oral argument in the case focused on the state of English and American common law prior to 1790, when the United States adopted its first Copyright Act.  Those challenging the law contended that Congress did not bring any public domain works into copyright protection in 1790 because common law copyright already protected those works at the time. [217]  The Government countered that Congress did bring public domain works into copyright protection in 1790. [218]  The former interpretation is not supported by the evidence discussed in this article as related to Donaldson v. Beckett, although admittedly this article makes no definitive conclusions about the American circumstances and developments from 1774 to 1790. What this article has shown is that the historical relationship between copyright law and free speech is more complicated than a simple conclusion that they have been separate branches of law between which lawmakers and jurists have traditionally seen no conflict.  In the episode of Donaldson, the conflict was recognized and made up a substantive part of the debate.  No one connected with Donaldson viewed the free speech issues at stake in the way they would be viewed today under the First Amendment, but nonetheless the concern that copyright could inhibit communication of ideas and even the freedom of the press was present in the speech of Effingham, as well as in the newspaper coverage.  The newspapers themselves were just emerging from a bruising battle with the House of Commons and the House of Lords over publication of those bodies’ proceedings, and several newspaper reporters and correspondents recognized that the copyright monopoly could pose a private threat to freedom of press similar to the state threat they knew well.  Further, newspaper coverage of speeches by Thurlow and Dalrymple demonstrated that those lawyers made freedom of press issues a part of their arguments to the House of Lords.  Finally, Donaldson himself engaged in free-press advocacy through the editorial pages of his own newspaper, the Edinburgh Advertiser, including during the appeal to the lords in Donaldson v. Beckett. Perhaps one of the most important legacies of Donaldson should be the recognition that, regardless of whether the common law copyright existed then or exists today, and regardless of a statute’s effect on that common law right, there is yet another source of law that trumps both common law and statute: a fundamental human right to freedom of expression.  Although their opinions have been given relatively scant attention in the court of history, Effingham and the other lords who spoke have given an important warning about the dangers posed by copyright to public communication of ideas.  Donaldson’s Edinburgh Advertiser reported:
LORD EFFINGHAM then rose and said, though it might appear presumptuous in one of his cloth, (an officer) to give his opinion in a cause which had divided the learned judges, yet he thought, if a perpetual exclusive right was given to authors, it would also give them a right of suppressing: a bad minister might purchase copies of books or pamphlets, which arraigned his conduct, or were friendly to the liberties of the people, and suppress them, and thus a blow might be given to the constitution and liberty of the press; that where there was a free press, there would always be a free people, and he wished to see no encroachment made on it, or on the liberty of the subject, and was therefore for reversing the decree.[219]
In his eloquence and position, Effingham was not alone.  Camden, too, expressed a sentiment not far afield, and Camden’s statement has received more attention from history than Effingham’s has.  Camden said that science and learning are public property and “they ought to be as free and general as Air or Water.”[220]  Indeed, Camden said, the very purpose of “enter[ing] into Society at all” is to “enlighten one another’s Minds, and improve our Faculties, for the common Welfare of the Species.”[221]  Knowledge, he said, is of no use or enjoyment unless it is shared, and true geniuses seek understanding rather than money.[222]  He cited the example of Milton, who, when offered five pounds for Paradise Lost, “did not reject it, and commit his Poem to the Flames, nor did he accept the miserable Pittance as the Reward for his labor; he knew that the real price of his Work was Immortality, and that Posterity would pay it.”[223] If the alteration of historical contours of copyright law is really what triggers First Amendment scrutiny, then courts in the future would do well to look carefully at copyright’s past.  Although it has been accepted that the modern American concepts of fair use and idea-expression dichotomy account for free-expression interests within copyright law itself,[224] the reality of copyright history is that it has always had a more complicated relationship with free expression.  The very purpose of copyright law—to “encourage learning” in the words of the Statute of Anne, or to “promote progress” of art in the words of the U.S. Constitution—arose in the period immediately after Parliament allowed the Licensing Act to expire in 1694 and various parties clamored for a law regulating printing.  As he argued against a return of licensing, the journalist (later turned novelist) Daniel Defoe articulated a societal benefit to freedom of speech:
To put a general stop to public Printing, would be a check to Learning, a Prohibition of Knowledge, and make Instruction Contraband: And as Printing has been own’d to be the most useful Invention ever found out, in order to polish the Learned World, make men Polite, and increase the Knowledge of Letters, and thereby all useful Arts and Sciences; so the high Perfection of Human Knowledge must be at a stand, Improvements stop, and the Knowledge of Letters decay in the Kingdom, if a general Interruption should be put to the Press.[225]
As an aside, Defoe argued later in the same essay that perhaps the government could require authors to attach their names to their works and thus cut down on undesirable attacks on others.  This would have the incidental benefit, he said, of decreasing “press-piracy,” or what we would today call copyright infringement.  In their efforts to get a bill regulating printing adopted and thus restore their monopoly powers, the booksellers or stationers who had benefited from licensing adopted Defoe’s public education rationale for free speech and attached it to copyright law.[226]  An understanding of the “traditional contours” of copyright law, then, must take into account the intertwined histories of free expression and copyright.  Such an understanding will require much careful study and will not be aided by simplistic or mistaken rhetoric based on a cursory historical review. Although the scope of this article has not permitted such a review of hundreds of years of copyright history, it has demonstrated that, even if the plaintiffs-appellants in Golan v. Holder are correct that American common law protected works under copyright in 1790, this protection did not emanate from English common law, at least in relation to Donaldson’s holding that there was no perpetual common law right that continued after statutory rights were extinguished.  Perhaps more importantly, however, this article demonstrates that the Government’s argument in Golan that Congress can remove works from the public domain without First Amendment scrutiny is not in line with the outcome of the eighteenth-century Battle of the Booksellers that culminated with Donaldson.  That episode suggests that legislative authority is not unlimited in the arena of copyright law and legislative enactments of copyright are to be read narrowly while the public interest, including in free communication, should be given weight when considering copyright questions. Appendix—Summary of Data from Westlaw “Journals and Law Reviews” Database on Donaldson v. Beckett
* J.D. LL.M., Associate Professor of Communications, Brigham Young University, 360 BRMB, Provo, UT 84602, Tel. 801-422-4340, ed_carter@byu.edu.
[1] Literary Property, Morning Chron. & London Advertiser, Feb. 26, 1774, at 2. Spelling here and throughout this manuscript has been modernized.
[2] Id.
[3] Id.
[4] The case is reported in multiple eighteenth-century sources, but not all of them are equally accurate and detailed. The authoritative legal reporter Sir James Burrow appended his report of Donaldson v. Beckett to an earlier case, Millar v. Taylor, decided on the same issue by the Court of King’s Bench in 1769. Burrow’s version tracks the minute book of the House of Lords. See Mark Rose, Authors and Owners: The Invention of Copyright 108-09 (1993).  However, it lacks reporting of the speeches by the lords themselves and also contains a critical error in reporting the recommendations of the common law judges. See Millar v. Taylor, (1769) 98 Eng. Rep. 201 (K.B.). (Burrow’s report of Donaldson v. Beckett begins on page 257For the sake of accuracy, even when making a full citation to Burrow’s Donaldson alone, this article’s footnotes will cite “Millar v. Taylor, (1769) 98 Eng. Rep. 201, 257 (K.B.),” because that is where the report is located, and where it will be most easily found in electronic databases, even though the case was decided in the House of Lords in 1774.) Meanwhile, the version reported by Brown does not make the same error in counting the common law judges’ advisory opinions but, like Burrow, omits the lords’ speeches. See Donaldson v. Beckett, (1774) 1 Eng. Rep. 837 (H.L.). The Parliamentary History version (or Hansard) is more comprehensive than either Burrow or Brown because it contains concise summaries of the speeches by the lawyers, judges, and lords. See 17 Parl. Hist. Eng. (1774) 953. A version called here the “Anonymous Report” contains detailed first-person accounts of the speeches by the lawyers, judges, and lords. See The Pleadings of the Counsel Before the House of Lords, in the Great Cause Concerning Literary Property (London, Wilkin, 1774) [hereinafter Anonymous Report]. The so-called Gentleman’s Report appears to be the most complete version of all five legal reports of the case. It includes a report of written submissions by the parties to the House of Lords that is not included in the other accounts. See The Cases of the Appellants and Respondents In the Cause of Literary Property (London, Bew 1774) [hereinafter Gentleman’s Report]. This article also gleans previously underappreciated details about Donaldson from eighteenth-century London and Edinburgh newspaper accounts found in the National Library of Scotland in Edinburgh, the British Library in London (Colindale), and the Burney Collection of Newspapers. The Reverend Charles Burney (1757-1817) amassed a large collection of early British newspapers, now housed at the British Library and made available electronically by Gale. The Burney Collection of Newspapers, which was digitized and made searchable in 2007, contains more than 1,200 titles and nearly one million pages.
[5] Literary Property, supra note 1.
[6] See supra note 4.
[7] See Eldred v. Ashcroft, 537 U.S. 186, 221 (2003).
[8] See, e.g., Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 560 (1985) (“In view of the First Amendment protections already embodied in the Copyright Act’s distinction between copyrightable expression and uncopyrightable facts and ideas, and the latitude for scholarship and comment traditionally afforded by fair use, we see no warrant for expanding the doctrine of fair use to create what amounts to a public figure exception to copyright.”).
[9] See Transcript of Oral Argument at 3, Golan v. Holder, No. 10-545 (U.S. Oct. 5, 2011). Speaking of the law at issue in Golan, Anthony T. Falzone, the attorney for the professors and composers challenging the law told the Justices at oral argument: “Section 514 did something unprecedented in American copyright law. It took millions of works out of the public domain, where they had remained for decades as the common property of all Americans. That violated the Copyright Clause and the First Amendment.” In questioning Solicitor General Donald B. Verrilli, Chief Justice John G. Roberts said: “General, there’s something at least at an intuitive level appealing about Mr. Falzone’s First Amendment argument. One day I can perform Shostakovich; Congress does something, the next day I can’t. Doesn’t that present a serious First Amendment problem?” Id. at 38.
[10] See, e.g., Jessica Litman, Digital Copyright (2001) (arguing that copyright law currently weighs too heavily in favor of owners and authors and against individuals); Neil Weinstock Netanel, Locating Copyright Within the First Amendment Skein, 54 Stan. L. Rev. 1 (2001); Lawrence Lessig, Copyright’s First Amendment, 48 U.C.L.A. L. Rev. 1057 (2001); Yochai Benkler, Free As the Air to Common Use: First Amendment Constraints on Enclosure of the Public Domain, 74 N.Y.U. L. Rev. 354 (1999).
[11] Eldred v. Reno, 239 F.3d 372, 375 (D.C. Cir. 2001). The Supreme Court in Eldred said the U.S. Court of Appeals for the D.C. Circuit “spoke too broadly” in making this statement. Eldred, 537 U.S. at 221. Meanwhile, the U.S. Court of Appeals for the Tenth Circuit applied intermediate scrutiny under the First Amendment to the Uruguay Round Agreements Act but ultimately concluded that the Act was constitutional. See Golan v. Holder, 609 F.3d 1076 (10th Cir. 2010), cert. granted, 131 S.Ct. 1600 (U.S. Mar. 7, 2011) (No. 10-545).
[12] Brief for the Petitioners at 14, Golan v. Holder, No. 10-545, (U.S. June 14, 2011).
[13] Id. at 18.
[14] Id. at 27.
[15] See Brief for the Respondents at 12, Golan v. Holder, No. 10-545, (U.S. Aug. 3, 2011).
[16] Id. at 17-18.
[17] Eldred v. Ashcroft, 537 U.S. 186, 221 (2003).
[18] See infra notes 219-26 and accompanying text.
[19] See infra notes 33-42 and accompanying text.
[20] The Federalist No. 43, at 268 (James Madison) (Clinton Rossiter ed., 1961).
[21] See U.S. Const. art. I, § 8, cl. 8. “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”
[22] The Federalist No. 43, supra note 20.
[23] One scholar has pointed out that the colonists should have been aware of the British literary property debate because on January 29, 1774, Benjamin Franklin appeared before members of the House of Lords in the Privy Council and was dressed down by Solicitor General Wedderburn. Just days later, Wedderburn would argue before the lords in favor of common law copyright in Donaldson v. Beckett, and on this occasion Wedderburn pilloried Franklin for having published a series of letters in a Boston newspaper without authorization of the letters’ owners. See Liam Séamus O’Melinn, What if James Madison Were to Assess the Intellectual Property Revolution? 2008 Mich. St. L. Rev. 401, 403 (2008).
[24] See infra notes 30-32 and accompanying text for the observation that Burrows’ omission of the speeches and votes of the lords contributed to misunderstandings of Donaldson’s holding. It was the votes of the lords, not the common law judges, that decided the case, and the lords clearly voted against the existence of a common law copyright.  See infra notes 184-87 and 191-93 and accompanying text for a fuller explication of Burrows’ miscounting of the votes of the common law judges and the effects of that error.
[25] See O’Melinn, supra note 23, at 408.
[26] See Susan P. Liemer, How We Lost Our Moral Rights and the Door Closed on Non-Economic Values in Copyright, 5 J. Marshall Rev. Intell. Prop. L. 1, 21-22 (2005). Another author speculates that Madison, in The Federalist No. 43, “may have been misled because his Blackstone was printed before the outcome of Donaldson v. Beckett.” Malla Pollack, Purveyance and Power, or Over-Priced Free Lunch: The Intellectual Property Clause as an Ally of the Takings Clause in the Public’s Control of Government, 30 Sw. U. L. Rev. 1, 110 n.659 (2000) (citing John F. Whicher, The Ghost of Donaldson v. Beckett: An Inquiry into the Constitutional Distribution of Powers over the Law of Literary Proptery in the United States, 9 Bull. Copyr. Soc’y of U.S.A. 102, 133 (1961-62)) For the coverage of Donaldson in the 1783 edition of Commentaries, see 2 Sir William Blackstone, Commentaries on the Laws of England 407, note h (9th ed. 1783).
[27] See Rose, supra note 4, at 103.
[28] See Ronan Deazley, On the Origin of the Right to Copy 191-210 (2004) [hereinafter Deazley, On the Origin]; Ronan Deazley, Rethinking Copyright 19-20 (hardcover ed. 2006) [hereinafterDeazley, Rethinking Copyright].
[29] See Wheaton v. Peters, 33 U.S. 591, 681, 685 (1834).
[30] See id. at 655-56 (“The eleven judges gave their opinions on the following points.”).
[31] See id. at 656 (“It would appear from the points decided, that a majority of the judges were in favour of the common law right of authors, but that the same had been taken away by the statute.”).
[32] See id. at 658-61.
[33] See Appendix for a summary of the results of this review.
[34] See supra note 4 for a description of the five legal reports.
[35] See Howard B. Abrams, The Historic Foundation of American Copyright Law: Exploding the Myth of Common Law Copyright, 29 Wayne L. Rev. 1119, 1156-70 (1983).
[36] See Deazley, On the Origin, supra note 28, at 199; Deazley, Rethinking Copyright, supra note 28, at 17-18.
[37] See Rose, supra note 4, at 154-58.
[38] See Craig W. Dallon, The Problem With Congress and Copyright Law: Forgetting the Past and Ignoring the Public Interest, 44 Santa Clara L. Rev. 365, 414-15 (2004) (discussing how the idiosyncratic nature of eighteenth-century House of Lords procedure has contributed to modern confusion about the meaning of Donaldson).  See also H. Ron Davidson, The Mechanics of Judicial Vote Switching, 38 Suffolk L. Rev. 17, 41 (2004). Abrams noted that the “dean of American copyright scholars,” Melville Nimmer, initially made this error. See Abrams, supra note 35, at 1164 n.189.
[39] See Deazley, On the Origin, supra note 28, at 209-10; Deazley, Rethinking Copyright, supra note 28.
[40] See generally, Rose, supra note 4.
[41] See Abrams, supra note 35, at 1183-4.
[42] See Lyman Ray Patterson, Copyright in Historical Perspective 172-79 (1st. ed., 1968).
[43] See Rose, supra note 4, at 86, 101-02.
[44] See Abrams, supra note 35, at 1163-64.
[45] Deazley, On the Origin, supra note 28, at 208.
[46] Id. at 172.
[47] See, e.g., Shyamkrishna Balganesh, Review, Debunking Blackstonian Copyright, 118 Yale L.J. 1126 (2009) (reviewing Neil Weinstock Netanel’s book, Copyright’s Paradox); Steven J. Horowitz, A Free Speech Theory of Copyright, 2009 Stan. Tech. L. Rev. 2 (2009); Raymond Shih Ray Ku, F(r)ee Expression? Reconciling Copyright and the First Amendment, 57 Case W. Res. L. Rev. 863 (2007); David McGowan, Why the First Amendment Cannot Dictate Copyright Policy, 65 U. Pitt. L. Rev. 281 (2004); Peter K. Yu, The Escalating Copyright Wars, 32 Hofstra L. Rev. 907 (2004).
[48] See, e.g., Diane Leenheer Zimmerman, Is There a Right to Have Something to Say? One View of the Public Domain, 73 Fordham L. Rev. 297, 303 n.14, 314, 333 n.149 (2004); Michael D. Birnhack, The Copyright Law and Free Speech Affair: Making-up and Breaking-up, 43 IDEA 233, 285 n.237 (2003). For a view on copyright and free speech in Great Britain, see generally Michael D. Birnhack, Acknowledging the Conflict Between Copyright Law and Freedom of Expression Under the Human Rights Act, 14(2) Ent. L. Rev. 24 (2003).
[49] Diane L. Zimmerman, The Statute of Anne and Its Progeny: Variations Without a Theme, 47 Hous. L. Rev. 965, 979 (2010).
[50] See Diane Leenheer Zimmerman, Information As Speech, Information As Goods: Some Thoughts on Marketplaces and the Bill of Rights, 33 Wm. & Mary L. Rev. 665, 684 (1992).
[51] Mark Rose, The Public Sphere and the Emergence of Copyright: Areopagitica, the Stationers’ Company, and the Statute of Anne, 12 Tul. J. Tech. & Intell. Prop. 123, 141 (2009).
[52] Id. at 141 n.82.
[53] Zimmerman, supra note 50, at 684 n.134.
[54] Id.
[55] Richard Perez-Pena, Chronicle, N.Y. Times, Feb. 16, 1993, at B7.
[56] William E. Schmidt, Queen Seeks Damages From Paper Over a Speech, N.Y. Times, Feb. 3, 1993, at A3.
[57] See generally, Alfred C. Yen, Essay, Eldred, the First Amendment, and Aggressive Copyright Claims, 40 Hous. L. Rev. 673 (2003).
[58] Robert T. Skinner, A Notable Family of Scots Printers 1-2 (1927).
[59] Id. at 2.
[60] Id. at 5.
[61] 1 James Boswell, The Life of Samuel Johnson, LL.D., 237-38 (London, Baldwin, 1791).
[62] Skinner, supra note 58, at 16.
[63] The Editors to the Public, Edinburgh Advertiser, Jan. 3, 1764, at 1. Copies of the Edinburgh Advertiser, which are not part of the Burney Collection and are thus not available electronically, were examined by the author at the National Library of Scotland in Edinburgh and the British Library in London (Newspaper Library Branch in Colindale). Typed transcriptions of the Edinburgh Advertiser cited throughout this article are on file with the author.
[64] Id.
[65] A Card to the Publishers of the Edinburgh Newspapers, Edinburgh Advertiser, Jan 3, 1764, at 6.
[66] On the Benefit of Advertising, Edinburgh Advertiser, Mar. 2, 1764, at 1.
[67] Id.
[68] The Editors to the Public, Edinburgh Advertiser, June 29, 1764, at 1.
[69] To the Public, Edinburgh Advertiser, Dec. 31, 1771, at 1 (emphasis in original).
[70] Id.
[71] Alexander Donaldson, Some Thoughts on the State of Literary Property, Humbly Submitted to the Consideration of the Public 11-17 (London, Donaldson 1764).
[72] See Mark Rose, The Author in Court: Pope v. Curll (1741), 21 Cultural Critique 197 (1992).
[73] James Boswell, The Decision of the Court of Session upon the Question of Literary Property (Edinburgh, Boswell, 1774).
[74] Id. at ii-iii.
[75] Stackhouse’s Bible history was first published in England in 1738, and the statutory copyright term under the 1710 Statute of Anne was 14 years, with a 14-year renewal term possible if the author was still alive. Given that more than 28 years had passed between 1738 and 1767, the book had entered the public domain, or in other words was no longer under statutory copyright protection, when Donaldson published his version of it.
[76] Advertisement, Gazetteer & New Daily Advertiser (London), Jan. 27, 1774, at 1; Advertisement, Pub. Advertiser (London), Jan. 27, 1774, at 1. Essentially the same advertisement was published a few days later in St. James’ Chronicle or the British Evening Post, the London Evening Post and the Morning Chronicle and London Advertiser. The London booksellers did not like the fact that Donaldson had come from Edinburgh to London and opened a shop that was focused on selling books at cheaper prices than what the London booksellers could offer. Donaldson’s critics contended that his books were not only inexpensive in price but also cheap in quality. A certain individual affiliated with or sympathetic to the booksellers (the letter was signed simply “Aldus”) complained that Donaldson’s shop was advertised with a sign that said, “The only shop for cheap books.” Letter to the Printer, Morning Chron. & London Advertiser, Feb. 15, 1774, at 2.
[77] Boswell, supra note 73, at 37. Since the sixteenth century, the Scottish Court of Session has acted as that country’s highest civil court, though appeals currently may be made to the House of Lords or, since 2009, the Supreme Court of the United Kingdom. At the time of Hinton v. Donaldson, as today, the judges of the Scottish Court of Session were legal professionals who took honorary titles as “lords” upon their appointment to the court. See Court of Session—Introduction, http://www.scotcourts.gov.uk/session/index.asp (last visited Dec. 1, 2011).
[78] Millar v. Taylor, (1769) 98 Eng. Rep. 201-02 (K.B.). Thomson was educated in Edinburgh but moved to London in 1725 to serve as a tutor for a wealthy family while he pursued his literary career.  Thomson’s idea to write a poem about winter was not original; in fact, he told a friend that he got the idea from another poet named Robert Riccaltoun (sometimes rendered “Rickleton”).  James Sambrook, James Thomson 1700-1748: A Life 33 (1991). He sold the copyright in the poem “Winter” to a young Scottish bookseller named John Millan (he had changed his name from “Macmillan” to appear more English rather than Scottish) for three pounds. Alan Dugald McKillop, ed., James Thomson (1700-1748): Letters and Documents 22, 37 (Alan Dugald McKillop ed., Univ. of Kansas Press, 1958). The poem “Winter” was entered on the copyright registry at Stationers’ Hall in London on April 29, 1726. Id. at 64. Thomson later wrote poems called “Summer” and “Autumn” and these copyrights, too, were sold to Millan. Id. at 63-64. Millan assigned the copyrights in “Winter,” “”Summer” and “Autumn” to Millar in June 1738. Id. at 120-122. The copyright for the poem “Spring,” however, was sold to Andrew Millar in 1729. Id. at 69-70. “The Seasons,” a collection of the four poems plus another called “A Hymn on the Seasons,” was first published in 1730 and subsequently revised by Thomson numerous times and republished in various editions before his death in 1748. See Hilbert H. Campbell, James Thomson 50-58 (1979). One critic said “The Seasons” made Thomson “enormously famous” (though certainly not enormously wealthy) and “was probably known, loved, and quoted more than any other English poem for a hundred years after Thomson’s death….” Id. at 142.
[79] Millar, 98 Eng. Rep. at 252. Mansfield was a judge as well as a lord who would play a key role in the House of Lords’ consideration of Donaldson in 1774. He previously served as counsel for the booksellers.
[80] Id. at 257.
[81] (1774) 1 Eng. Rep. 837-38 (H.L.).
[82] London, Pub. Advertiser, Jan. 27, 1774, at 2.
[83] Deazley, On the Origin, supra note 28, at 194-95.
[84] London, London Evening-Post, Feb. 1–3, 1774, at 3; London, Middlesex J. & Evening Advertiser (London), Feb. 1–3, 1774, at 3; For the Morning Chronicle, Morning Chron. & London Advertiser, Feb. 2, 1774, at 4.
[85] For the Morning Chronicle, supra note 84.
[86] Parliament allowed pre-publication licensing to expire in 1694. Among the immediate results of this change in policy was the rise of newspapers in London. In the years leading up to the 1710 Statute of Anne, however, public policy debates focused on whether and how to regulate printing, including newspapers. See infra notes 225-26 and accompanying text.
[87] At this time, the newspapers themselves had just emerged from a significant free press battle with Parliament over reporting and publishing verbatim the debates in the House of Commons and the House of Lords.  Via a Standing Order in 1698, the House of Lords made unauthorized publication of its official activities a breach of privilege, and the Lords vigorously sought to punish certain newspapers under this authority through the 1760s.  William C. Lowe, Peers and Printers: The Beginnings of Sustained Press Coverage of the House of Lords in the 1770s, 7:2 Parl. Hist. 241, 242-43 (1988).  By 1771 the radical journalist and member of Parliament John Wilkes, via the Printers’ Case, helped secure the right of printers to report proceedings of the House of Commons.  Id. at 244-45.  To prevent a similar fate, the Lords excluded everyone—including reporters and members of the House of Commons—from their debates until 1774, when this practice eventually proved unsustainable.  Id. at 248-49. While news coverage eventually would change the entire culture of Parliament, in early 1774 the Lords had not yet fully transformed their speeches into public performances for the benefit of the news media and their audiences.  See Jason Peacey, The Print Culture of Parliament, 1600-1800, 26:1 Parl. Hist. 1 (2007) (surveying the development of print coverage of Parliament through the seventeenth and eighteenth centuries); Christopher Reid, Whose Parliament? Political Oratory and Print Culture in the Later 18th Century, 9(2) Lang. & Lit. 122 (2000) (examining how a parliamentary culture of “gentlemanly orality” began to give way under the increasing scrutiny of print media).
[88] Deazley, Rethinking Copyright, supra note 28, at 15-16.
[89] See supra note 86 and accompanying text.
[90] Deazley, On the Origin, supra note 28, at 192.
[91] Id. at 193.
[92] Abrams, supra note 35, at 1157.
[93] Id.
[94] Deazley, On the Origin, supra note 28, at 193 (internal footnotes omitted).
[95] In addition to the copious news coverage of the appeal in the House of Lords, the extent to which the case attracted attention at the expense of other matters was evidenced by the fact that the House of Lords postponed its consideration of what to do in response to the American colonists’ Boston Tea Party, which had taken place in December 1773, until after Donaldson was resolved. See London, London Evening-Post, Feb. 8–10, 1774, at 3 (“The papers relative to the affairs at Boston, are preparing to be laid before a Great Assembly, that business being to come on after the affair of literary property is determined.”).
[96] Deazley, On the Origin, supra note 28, at 194 n.22.
[97] Donaldson v. Beckett, 1 Eng. Rep. 837, 839.
[98] The newspapers even kept their readership informed of week-long delays in the House of Lords. Postscript, London Chron., Jan. 22–25, 1774, at 8; London, Morning Chron. & London Advertiser, Jan. 25, 1774, at 2; London, Morning Post & Daily Advertiser (London), Jan. 26, 1774, at 2; London, Pub. Advertiser (London), Jan. 27, 1774, at 2.
[99] For the Morning Chronicle, supra note 84.
[100] Id.
[101] Letter to the Printer, On Literary Property, Morning Chron. & London Advertiser, Feb. 4, 1774, at 2.
[102] Id.
[103] Id.
[104] Id.
[105] Rose, supra note 4, at 96.
[106] Thurlow was known as a “bold and determined lawyer.” 3 Sir Lewis Namier and John Brooke, The House of Commons 1754-1790, 530 (Oxford Univ. Press 1964). Thurlow and two of the lawyers who represented Beckett, the Solicitor General Alexander Wedderburn and John Dunning, were veterans of literary property litigation, having appeared against one another in 1761 in a case called Tonson v. Collins, (1761) 96 Eng. Rep. 169 (K.B.), and again in 1768 in Millar v. Taylor, (1769) 98 Eng. Rep. 201 (K.B.). Deazley, On the Origin, supra note 28, at 195.
[107] London, Gazetteer & New Daily Advertiser (London), Feb. 5, 1774, at 2. Another newspaper writer timed Thurlow’s remarks at two hours. House of Lords, St. James’s Chron. or Brit. Evening-Post (London), Feb. 3–5, 1774, at 4. (The front page of the St. James’s Chronicle erroneously displays the dates as Jan. 3–Feb. 5, 1774. The correct dates of coverage by that issue are Feb. 3–5, 1774.)
[108] London, London Evening-Post, Feb. 3–5, 1774, at 3.
[109] Brown simply describes the appellants’ case as being presented by “E. Thurlow, J. Dalrymple, A. Murphy.” Nowhere in the report are the respective arguments of the individual counsel ascribed to them on an individual basis. See Donaldson v. Beckett, (1774) 1 Eng. Rep. at 839-46 (H.L.).
[110] Donaldson v. Beckett, (1769) 98 Eng. Rep. 201, 257 (K.B.).
[111] 17 Parl. Hist. Eng. (1774) 953, 954.
[112] Id.
[113] Anonymous Report, supra note 4, at 1.
[114] Gentleman’s Report, supra note 4, at 5.
[115] House of Lords, Middlesex J. & Evening Advertiser (London), February 3–5, 1774, at 4.
[116] Id.
[117] “The Attorney-General concluded, by hoping, ‘That as the Lords of Session in Scotland had freed that country from a monopoly which took its rise from the chimerical idea of the actuality of Literary Property, their Lordships, whom he addressed, would likewise, by a decree of a similar nature, rescue the cause of Literature and Authorship from the hands of a few monopolizing booksellers, in whom the perquisites of other men’s labours, the fruits of their inventions, and result, of their ingenuity, were at present wholly centered.’ Edinburgh Advertiser, Feb. 8–11, 1774, at 3. In its reporting of this part of Thurlow’s speech, one London newspaper emphasized the public interest. Quoting Thurlow, the Middlesex Journal and Evening Advertiser wrote, “The Lords of Sessions[sic] in Scotland have freed their country from this monopoly; they did it from the clearest conviction that it was contrary to the interest of the public and of literature; and I cannot conclude myself with wishing, that your Lordships will also free this country from the same monopoly.” House of Lordssupra note 115.
[118] “Authors! Turn your Pens to Swords, or blunt them for the Service of the Law; what Property you gain by [murdering] the human Species will be your’s [sic] and your Successor’s; the immense Sums you may obtain by pleading for and against the Rights of others, the Law will secure to you and Representatives to the End of Time! Strange must the Laws of that Country be, where every Thing is protected but the Product of Genius!” Letter to the Printer, St. James’s Chron. or Brit. Evening Post (London), February 8–10, 1774, at 1.
[119] Some Thoughts on Literary Property, Morning Chron. & London Advertiser, Feb. 9, 1774, at 2.
[120] Berne Convention for the Protection of Literary and Artistic Works art. 6bis, Sept. 9, 1886, 25 U.S.T. 1341, 828 U.N.T.S. 221 (revised in Paris July 24, 1971, and in 1979) (“Independently of the author’s economic rights, and even after the transfer of the said rights, the author shall have the right to claim authorship of the work and to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, the said work, which would be prejudicial to his honor or reputation.”).
[121] A Thought on Literary Property, Morning Chron. & London Advertiser Feb. 9, 1774, at 2 (a letter writer stated that “an exclusive right to print a book must be legally vested somewhere, otherwise the community cannot reap the benefit of it; for no man will be at the expence [sic], risk and trouble of printing an impression of any book, if he is not certain that it is not in the power of any other man to print an impression of the same book”).
[122] The Substance of Sir John Dalrymple’s Arguments in the House of Lords Against Literary Property, London Chron., Feb. 8–10, 1774, at 1 [hereinafter Substance]. Cf. Dalrymple’s speech in Parliamentary History, 17 Eng. Parl. Hist. (1774) 957-63.
[123] House of Lords, Middlesex J. & Evening Advertiser (London), Feb. 5–8, 1774, at 4.
[124] Even before Dalrymple spoke, Woodfall’s Morning Chronicle predicted that Sir John would give “an elaborate and learned speech.” London, Morning Chron. & London Advertiser, Feb. 7, 1774, at 3. In fact, Dalrymple’s time before the lords proved illuminating and entertaining. One newspaper reporter said Dalrymple “seemed to exhaust, in this one speech, all the knowledge, metaphysical, legal, chemical and political, he possesses.”  Substancesupra note 122.  Newspapers also noted that Dalrymple recently had sold rights to his book “Memoirs of Great Britain” to the very booksellers against whom he argued in the House of Lords.London, Pub. Advertiser (London), Feb. 9, 1774, at 2.  Following his speech, Dalrymple was called a “pernicious bloodsucker of sleeping men” by one newspaper correspondent. London, Morning Chron. & London Advertiser, Feb. 11, 1774, at 2.
[125] London, London Chron., Feb. 5–8, 1774, at 7; London, London Evening-Post, Feb. 5–8, 1774, at 3; London, Gazetteer & New Daily Advertiser (London), Feb. 8, 1774, at 2.
[126] House of Lordssupra note 123 (emphasis in original).
[127] Id.
[128] In general, Dalrymple’s argument is the least coherent but most entertaining of all the lawyers who argued before the House of Lords. Dalrymple made a joke about not believing anything said by the church; laughed at the attempts at writing poetry by British monarchy; poked fun at the Stationers’ Company for its silly rules, including one about members taking off their hats while speaking; and drew out an extended analogy to the Statute of Anne that involved an imaginary Parliamentary act to encourage planting hedges and trees. 17 Parl. Hist. Eng. (1774) at 959-62 (doubting the Church, mocking the poetry of British monarchy and the rules of the Stationers’ Company); Gentleman’s Report, supra note 4 at 22 (the imaginary act to encourage planting hedges and trees).
[129] Substancesupra note 122.
[130] That this was the main point of Dalrymple’s argument was recognized by the Morning Chronicle, in an account presumably written by Woodfall, reporting that Dalrymple “entered into a variety of observations upon the question at large” but ultimately “den[ied] that there ever were any [rights] at Common Law upon such principles as the Respondents contended for.” Literary Property, Morning Chron. & London Advertiser, Feb. 8, 1774, at 2.
[131] Substancesupra note 122.
[132] See Rose, supra note 4, at 109-10 (describing the possibility that Burrow’s errors conveyed to readers the mistaken impression that the question being decided was only whether the common law right is abrogated by statute, and not whether there was a common law right at all).
[133] Woodfall, editor of the Morning Chronicle and London Advertiser, created “masterpieces” of detailed and accurate news coverage while other, less gifted reporters could compose only “brief sketches” that sometimes suffered from errors and lacked detail.  Peter D.G. Thomas, The Beginning of Parliamentary Reporting in Newspapers, 1768-1774, 74(293) Engl. Hist. Rev. 623, 636 (1959). Woodfall, whose nickname was “Memory,” possessed extraordinary skills and capacity to recollect things that “enabled him to sit in the Gallery without moving for twelve hours at a time, occasionally throughout the night, and then move on to his printing house to compose a hasty record of the proceedings.” Newspaper History: From the Seventeenth Century to the Present Day 160 (George Boyce, James Curran & Pauline Wingate eds., 1978) [hereinafterNewspaper History]. During the Donaldson case, a newspaper letter writer who called himself or herself “Justice” commented on the “astonishing memory” of Woodfall and noted that no other London newspaper even attempted to give verbatim accounts of the speeches in the House of Lords as the Morning Chronicle did even though Woodfall never took written notes. Letter to the Printer, Morning Chron. & London Advertiser, Feb. 14, 1774, at 2. In parliamentary reporting, Woodfall was known to have acquired transcripts of politicians’ remarks and may even have been part of a common practice at the time of accepting money from certain politicians to give them more lengthy coverage in the newspaper than that given to political rivals. See Newspaper History, supra, at 161. It is not known whether these practices affected Woodfall’s coverage of theDonaldson case in the House of Lords.
[134] Literary Propertysupra note 130, at 2.
[135] Id.
[136] London, Pub. Advertiser (London), Feb. 9, 1774, at 2.
[137] 17 Parl. Hist. Eng. (1774) 963-66.
[138] Substance of the Arguments of the Solicitor General, in Favour of Literary Property, on Tuesday Last, London Chron., supra note 122, at 5.
[139] 17 Parl. Hist. Eng. (1774) 965-66.
[140] 2 Namier & Brooke, supra note 106, at 367.
[141] Londonsupra note 136.
[142] Literary Propertysupra note 119, at 2.
[143] Id.
[144] London, Gazetteer & New Daily Advertiser (London), Feb. 11, 1774, at 2.
[145] While the lords posed the questions to the judges in the form of whether the Statute of Anne superseded the common law copyright, if it ever existed, the lords themselves were not bound to answer those same five questions. The lords only had to decide whether the injunction banning Donaldson’s publication of The Seasons, in which the London booksellers claimed to own copyright, should be reversed.
[146] London, Morning Chron. & London Advertiser, Feb. 11, 1774, at 2 (“The public may depend upon our authority, when we assure them, that the questions stated by the Lord Chancellor and Lord Camden, for the opinion of the Judges, respecting the existence of a common law right as to Literary Property, are erroneously worded in every paper of yesterday but the Morning Chronicle.”).
[147] Literary Property, Morning Chron. & London Advertiser, Feb. 10, 1774, at 2.
[148] Londonsupra note 144, at 2; Craftsman or Say’s Weekly J. (London), Feb. 12, 1774, at 3.
[149] House of Lords, London Evening-Post, Feb. 8–10, 1774, at 3. It is evident this version makes the second half of Question No. 1 into Question No. 2 and omits the actual Question No. 2 (dealing with publication’s effect on a common law right) entirely.
[150] Deazley, Rethinking Copyright, supra note 28, at 16 (citing Patterson, supra note 42, at 176-77).
[151] Literary Propertysupra note 147, at 2.  The version of these two questions reported in the London Evening Post and other newspapers differs in wording, though not obviously in substance, from the Morning Chronicle report.
[152] On Literary Property, Morning Chron. & London Advertiser, supra note 76, at 1.
[153] Literary Property, Morning Chron. & London Advertiser, Feb. 16, 1774, at 2 (noting that “the Judges were not entirely of the same opinion” and therefore the lords voted to invite the judges to “deliver their sentiments upon the subject.”). On February 15, the following judges were heard: Mr. Baron James Eyre of the Court of Exchequer, Mr. Justice George Nares of the Court of Common Pleas, Mr. Justice William Ashurst of the Court of King’s Bench and Mr. Justice William Blackstone of the Court of King’s Bench. Blackstone was indisposed (one newspaper noted he was “ill with gout,” id.) and so he sent a written statement to be read by Ashurst. London, London Evening-Post, Feb. 15–17, 1774, at 1. On February 17, the House of Lords heard from Mr. Justice Edward Willes of the Court of King’s Bench, Sir Richard Aston of the Court of King’s Bench, Baron George Perrott of the Exchequer, Baron Richard Adams of the Exchequer and Mr. Justice Henry Gould of the Court of Common Pleas. London, Gen. Evening-Post (London), Feb. 15–17, 1774, at 1.Finally, on February 21, two judges who were also members of the House of Lords spoke: Lord Chief Baron Sydney Smythe of the Exchequer and Chief Justice of the Court of Common Pleas William De Grey. London,London Evening-Post, Feb. 19–22, 1774, at 3. That Mansfield did not speak as a judge was a surprise. See London, Daily Advertiser, Feb. 18, 1774, at 1 (reporting that three lords were expected to speak on Monday). He did not speak as a judge or a lord, thus drawing the wrath of his former clients, the booksellers, who undoubtedly expected a repeat performance of his opinion in Millar v. Taylor. The booksellers felt that Mansfield had induced them to bring the costly and difficult appeal to the House of Lords and then abandoned them; in newspaper copy he was derided as mean, treacherous and an imitator of Satan because he “tempted the booksellers, and now laughs at them for their folly.” London, Middlesex J. & Evening Advertiser (London), Feb. 22–24, 1774, at 4.
[154] See Deazley, On the Origin, supra note 28, at 199-209.
[155] Literary Property, London Chron., Feb. 15–17, 1774, at 5.
[156] Literary Property, Morning Chron. & London Advertiser, Feb. 19, 1774, at 2.
[157] Literary Property, Morning Chron. & London Advertiser, Feb. 21, 1774, at 3.
[158] Literary Property, London Chron., Feb. 22–24, 1774, at 4.
[159] Literary Propertysupra note 156, at 2.
[160] Id.
[161] Literary Propertysupra note 158.
[162] Literary Propertysupra note 153.
[163] Id.
[164] Id. Blackstone was known to be in support of the rights of authors and booksellers, perhaps not coincidentally given his status as an author of the Commentaries, of which there were known to be pirated copies printed in Ireland and Scotland and then brought to England. Letter to the Printer, Morning Chron. & London Advertiser, supra note 76.
[165] Literary Property, Morning Chron. & London Advertiser, Feb. 18, 1774, at 2.
[166] Id.; Literary Propertysupra note 156.
[167] Literary Propertysupra note 157.
[168] Literary Propertysupra note 158.
[169] See Deazley, On the Origin, supra note 28, at 199.
[170] London, Pub. Advertiser (London), Feb. 16, 1774, at 2.
[171] The second question posed a variety of problems and the reporting of the judges’ answers to it seems full of error. Deazley, for example, notes an error in the reporting of Aston’s answer to Question No. 2. SeeDeazley, On the Origin, supra note 28, at 200. Deazley also reports discrepancies in the reporting of responses to the second question by not only Aston but also Perrott, Adams, Smythe and De Grey. See id. at 200-04.
[172] Literary Propertysupra note 155 (quoting Eyre saying, “if the notion of a common law right should be reprobated, such reprobation carried with it an explicit answer to the second question: There being no common law right, an action could not be maintained against the re-publishers of an Author’s book or literary composition, without his consent.”).
[173] See Gentleman’s Report, supra note 4, at 32.
[174] See Anonymous Report, supra note 4, at 15.
[175] 17 Parl. Hist. Eng. (1774) 972-73.
[176] Millar v. Taylor, (1769) 98 Eng. Rep. 201, 258 (K.B.).
[177] See infra notes 184-88 and accompanying text.
[178] Letter to the Printer, Morning Chron. & London Advertiser, supra note 157, at 2.
[179] Literary Propertysupra note 156 (Barron Perrott); Literary Propertysupra note 158 (Baron Adams and Chief Justice De Grey).
[180] Literary Propertysupra note 158.
[181] Literary Propertysupra note 155.
[182] Literary Propertysupra note 158.
[183] Literary Propertysupra note 156 (Baron Perrott); Literary Propertysupra note 158 (Baron Adams).
[184] Millar v. Taylor, (1769) 98 Eng. Rep. 201, 258 (K.B).
[185] 17 Parl. Hist. Eng. (1774) 975-76.
[186] Literary Propertysupra note 155; London Evening-Post, Feb. 15—17, 1774, at 1; Literary Property, Middlesex J. & Evening Advertiser (London), Feb. 15—17, 1774, at 2; London, Gazetteer & New Daily Advertiser (London), Feb. 16, 1774, at 2; Literary Property, Morning Chron. & London Advertiser, Feb. 16, 1774, at 2; London, Pub. Advertiser (London), Feb. 16, 1774, at 2; House of Lords,Gen. Evening Post (London), Feb. 17—19, 1774, at 1.
[187] The erroneous recording of Nares’ vote remains somewhat mysterious as to its cause, but modern scholars such as Whicher, Abrams and Rose have documented in detail the error and its effects. Whicher, supranote 26, at 129-30; Abrams, supra note 35, at 1169; Rose, supra note 4, at 154-58.
[188] See, e.g., Rose, supra note 4, at 157—58 (arguing that the clerk’s error was substantively inconsequential because the House of Lords’ vote determined the outcome of the appeal but that the error “contributed to a less than fully justified sense of closure to the literary-property question.”).
[189] See, e.g.Literary Property, Morning Chron. & London Advertiser, Feb. 16, 1774, at 2 (the opinions of the judges focus on whether there is a common law right of literary property, and whether it is superseded by the Statute of Anne).
[190] Literary Property, London Chron., Feb.15—17, 1774, at 5.
[191] Deazley, On the Origin, supra note 28, at 205.
[192] Id.
[193] London, St. James’s Chron. or Brit. Evening Post (London), Feb. 19—22, 1774, at 4.
[194] London, Middlesex J. & Evening Advertiser (London), Feb. 22—24, 1774, at 1.
[195] Id.
[196] Deazley, On the Origin, supra note 28, at 205-06. He also suggests (id. at 210) that Camden said the statute trumped, but it appears that Camden said there was never a common law right. Rose, supra note 4, at 103 n.7 makes clear that Camden thought there was never a common law right.
[197] Literary Property, Morning Chron. & London Advertiser, Feb. 26, 1774, at 2; London, London Evening-Post, Feb. 22—24, 1774, at 1.
[198] Londonsupra note 194.
[199] It is somewhat unclear from this whether Apsley meant there was a common law right superseded by the Statute of Anne, or that there never was a common law right.
[200] Literary Propertysupra note 1.
[201] London, supra note 194.
[202] The Parliamentary History reports that there was a 22-11 vote in the House of Lords to reverse the decree. 17 Parl. Hist. Eng. (1774) 1003. None of the other versions report a numerical vote, and Rose—relying in part on contemporary newspaper accounts—contends that there was not a “formal division of the House” and that, instead, “[m]ost likely the decision was by simple voice vote.” Rose, supra note 4, at 102.
[203] London, London Evening-Post, Feb. 22–24, 1774, at 4.
[204] Ben Button, Letter to the Printer, St. James’s Chron. or Brit. Evening Post (London), Feb. 24–26, 1774, at 1.
[205] Baldwin’s London Wkly. J., Feb. 26, 1774, at 4.
[206] Extract of a Letter from Eton, London Chron., Mar. 3–5, 1774, at 6.
[207] Morning Chron. & London Advertiser, Feb. 26, 1774, at 3.
[208] Extract of a Letter from London, Edinburgh Advertiser, Feb. 25 – Mar. 1, 1774, at 4. The names are Thomas Becket, Peter Abraham de Hondt, John Rivington, William Johnson, William Strachan, Thomas Longman, William Richardson, John Richardson, Thomas Lowndes, Thomas Caflon, George Kearfley, Henry Baldwin, William Owen, Thomas Davies, and Thomas Cadell.
[209] This fact does not mean that eighteenth-century participants in Donaldson contemplated modern problems posed by copyright law in the face of constitutional free speech guarantees. But it does counter the notion that copyright and free speech were never considered to be in conflict and, therefore, under the traditionalist mode of constitutional and statutory interpretation, American jurists in the twenty-first century should not apply First Amendment scrutiny to the Copyright Act. See, e.g., Stephen M. McJohn, Eldred’s Aftermath: Tradition, the Copyright Clause, and the Constitutionalization of Fair Use, 10 Mich. Telecomm. & Tech. L. Rev. 95, 107 (2003) (explaining Eldred’s traditionalist focus on the First Amendment safeguards within copyright itself); Michael D. Birnhack, Copyright Law and Free Speech After Eldred v. Ashcroft, 76 S. Cal. L. Rev. 1275, 1278 (2003) (arguing that external constitutional scrutiny must be applied to copyright because its internal accommodations for free speech are insufficient).
[210] Of course, much more work can be done to understand the history of copyright and free speech, both before and after Donaldson v. Beckett. This article has not made a comprehensive attempt but only illustrates that the history is not as uncomplicatedly clear as some have suggested. A primary contribution of this article is to demonstrate that copyright law and free speech, while often considered completely separate branches of law, do have some shared history that should be further explored.
[211] Golan v. Gonzales, 501 F.3d 1179 (10th Cir. 2007).
[212] Berne Convention, supra note 120, art. 7.
[213] Golan v. Gonzales, 501 F.3d at 1184.
[214] Golan v. Holder, 609 F.3d 1076, 1084 (10th Cir. 2010), cert. granted, 131 S.Ct. 1600 (2011).
[215] Transcript of Oral Argument at 23–24, Golan v. Holder, No. 10-545 (U.S. Oct. 5, 2011).
[216] Id. at 40.
[217] Brief for the Petitioners at 31, Golan v. Holder, No. 10-545 (U.S. June 14, 2011).
[218] Brief for the Respondents at 17-18, Golan v. Holder, No. 10-545 (U.S. Aug. 3, 2011).
[219] Extract of a Letter from London, supra note 208 (emphasis in original). In response to Effingham’s speech, a letter-to-editor writer said, “I was highly charmed with the divine and noble spirit of liberty, which breathes through the speech of Lord Effingham Howard, on the subject of Literary Property. May it ever inhere in him, and be communicated, not only to the House of which is a Member, but to the most distant corner of the kingdom, for ever to continue and be an inhabitant in the breast of every individual….” Letter to the Editor, Gen. Evening Post, Mar. 8, 1774, at 4. The same letter writer, however, went on to dispute that Effingham’s hypothetical about the despotic minister or prince could ever actually take place. Id.
[220] Gentleman’s Report, supra note 4, at 53.
[221] Id. at 53-54.
[222] Id. at 54.
[223] Id. at 54.
[224] Harper & Row Publishers, Inc. v. Nation Enterp., 471 U.S. 539, 555-557 (1985).
[225] Daniel Defoe, An Essay on Regulation of the Press 3 (1704).
[226] Deazley, On the Origin, supra note 28, at 32.

Caught in the Middle: Reducing the Uncertainty Created by the FDA and the Patent System for Genetic Diagnostic Test Makers

Caught in the Middle: Reducing the Uncertainty Created by the FDA and the Patent System for Genetic Diagnostic Test Makers
By Sharonmoyee Goswami* A pdf version of this article may be downloaded here.  


Genetic diagnostic tests promise a wealth of benefits. They can figure out if a particular drug will work in your body, tell you what disease you have, or one you might get. There are two main types of genetic diagnostic tests, commercially developed “kits”—complete test systems with all the components and instructions needed to conduct the test that are sold to multiple labs—and “laboratory-developed tests” (LDTs)—preassembled test systems intended for use at a single laboratory.[1] Unlike kits, LDTs are sold to individual health care providers and directly to patients.[2] Until recently, the Food and Drug Administration (FDA)  regulated commercially developed kits, but did not regulate LDTs, even when the two performed the same function.[3] In 2010, the FDA decided to start regulating all laboratory-developed tests. However, regulation does not occur in a vacuum, and increased regulation necessitates increased outlay for companies seeking to market genetic diagnostic tests. For drug companies, the risk that a product will require extensive ex ante investment in clinical trials but may not be approved for market release is mitigated by the presence of drug patents, and to a lesser extent, by statutory data exclusivity.[4] Both ensure that if a company succeeds in getting a drug past clinical trials and onto the market, then a competitor will not be able to copy their drug and unfairly profit without an initial outlay. Because the patentability of diagnostic tests is uncertain,[5] diagnostic test companies do not enjoy the same level of protection as drug companies. If the FDA expands the scope of regulation without the backstop of patent protection, it seems likely that the current booming market for genetic diagnostic tests will wane, to the detriment of consumers. To combat this result, I address three principle options:
  1. Require no regulation, but create no change in the status of patentable subject matter. Effectively, this option maintains the status quo and responds to critics’ suggestions that the FDA is expanding its reach too far by regulating genetic diagnostic tests.
  2. Pursue regulation, but create a per se patentable subject matter rule for diagnostic tests to balance the additional expense (notwithstanding additional barriers to patentability), creating a baseline similar to that for pharmaceutical drugs.
  3. Create a new regulatory regime that balances the additional expense of regulation through data exclusivity and limiting additional regulation to only the most necessary areas.
In exploring these options, this paper proceeds in five parts. Part I outlines the current regulatory framework and the FDA’s recent shift in regulation. Part II covers the main problems with the current unregulated market for genetic diagnostic tests and concludes by eliminating the first principal option. Part III addresses the current framework for patentable subject matter and discusses whether a per se rule would fit within this regime. In Part III, I determine that a twenty-year patent term may provide too much protection for genetic diagnostic tests, particularly considering that enforcement of such patents serves to limit consumer choice and may stifle innovation. Part III further finds an appropriate alternative to be FDA-mediated data exclusivity, as seen with the Hatch-Waxman Act. Part IV addresses what regulatory changes are necessary to accommodate the unusual needs of genetic diagnostic tests. The solutions suggested would reduce the ex ante uncertainty facing diagnostic test companies by clarifying the classification regime in the FDA, creating mandatory maximum times for approval within the FDA, streamlining complaint procedures to ensure that any issues with tests are quickly corrected, particularly for software and internet-based tests, and most importantly, creating a data exclusivity backstop for diagnostic tests that fall outside the scope of patentable subject matter. Corresponding solutions would benefit consumers by strengthening labeling requirements and genetic counseling for particular test varieties and increasing methods of keeping up with new technology in this field. Finally, Part V applies this new regulatory system to a purely computational genetic diagnostic test, which I believe to be emblematic of genetic diagnostic tests in the future.

I. Current Regulatory Framework for Genetic Diagnostic Tests and the Dangers of Increased Regulation

In this section, I discuss the current regulatory framework for genetic diagnostic tests, beginning with a short background of how institutional relationships led to the FDA’s current framework. Subsequently, I address the main problems with the regulatory framework that increased regulation would exacerbate and the negative impact that expansion could have on the genetic diagnostic test industry, namely, (1) the delay in time-to-market for the tests; (2) the uncertainty as to the classification of a particular test, and (3) the absence of any exclusivity backstop to prevent copying by competitors after approval.

A.  Institutional Frameworks at the FDA

According to the traditional “transmission belt” theory,[6] Congress creates rules that govern agency action, the agency adopts procedures that adhere to those Congressional directives, and these processes are kept in check through judicial review. However, unlike other agencies that adhere to the traditional “transmission belt” theory, the FDA is a particularly powerful agency that takes a greater role in governance than mere transmission.[7] The increasingly difficult subject matter that the FDA regulates creates a situation where Congress and the courts simply do not have the necessary expertise to create specific policies governing drugs and devices. Indeed, well-known practitioner Thomas Austern has criticized the FDA’s substantial power, alleging that it was “delegation running riot”.[8] Historically, Congress and the courts have stepped in to curtail FDA power in one of two situations: (1) when a high-risk product creates public outcry and (2) when FDA regulation injures industry substantially. The FDA originated out of concern about high-risk products—Congress created the agency in response to Upton Sinclair’s 1906 book The Jungle and its exposé of the meatpacking industry.[9] Subsequent expansion continued in response to other high-risk disasters. The 1938 Act[10] responded to medicines for children that had been mixed with antifreeze.[11] The 1962 Kefauver-Harris Amendments responded to the narrowly averted Thalidomide disaster.[12] Further, during the 1960s, all but one of the Congressional oversight hearings were conducted to criticize the FDA for failing to take adequate regulatory action against products that the committee concluded were safe or ineffective.[13] Congress also traditionally steps in when FDA involvement threatens to substantially injure industry. This second situation  may be a result of agency capture and Congressional interests in the industry. Established companies who get many products approved by the FDA have developed long-standing relationships with the agency, particularly given a “revolving door” between the agency and corresponding companies. Since these established companies are familiar with existing FDA procedures, they are unlikely to lobby Congress to change that framework. Even when FDA procedures are onerous, established companies are likewise better equipped to deal with them, often to the detriment of smaller entities. As those small companies are unlikely to have sway in Congress, the framework remains unchanged until problems become large enough to attract the attention of the general public or established companies. The high-risk disasters discussed supra are examples of FDA change in response to problems that affect the general public. More recently, changes at the FDA have come from established companies that helped enact legislation to make the FDA more efficient, most notably the Prescription Drug User Fee Act,[14] or to reduce adverse effects on industry from increased regulation, as with the Hatch-Waxman Act,[15] discussed infra. Because of the significant discretion given to the FDA by Congress and the courts, the agency is adept at responding to technological changes. Instead of relying on rulemaking or case-by-case adjudication like most agencies, the FDA promulgates new policies through guidelines, which often have a de facto binding effect because of the close relationship those companies have with the agency. If the company is able to follow the guidelines, it is in their best interest to do so because going against the FDA’s policies could put their entire line of products at risk. Of course, the agency would not retaliate by refusing to approve a particular product, but may delay the approval or requests for additional clinical trials, which increase expenses to the company with little corresponding benefit to the consumer. Finally, the FDA and its counterpart state agencies have fared extremely well in the courts.[16] When faced with complex scientific and technical issues, judges have been reluctant to overrule decisions made by the FDA, and the Supreme Court has repeatedly upheld the power of the FDA to protect the public from “dangerous products.”[17] Furthermore, because judges generally do not choose which cases they will adjudicate (although the Supreme Court does to a certain extent), the courts cannot provide a reliable mechanism for effecting policy, except in a reactive fashion. Despite these limitations, the courts have acted to influence policy in this area in two ways: (1) by curbing FDA procedural irregularities and (2) by marshalling public opinion of high-risk products through lawsuits. The main target of courts is the non-binding guidelines discussed supra, which have been struck down by courts when they become too much like binding regulations without any of the requisite procedural mechanisms.[18] The result has been an FDA policy in which the guidelines are never actively enforced, but upheld through extra-legal mechanisms. As for the marshalling of public opinion of high-risk products through lawsuits, many tort suits and class-actions have created changes in the way that the FDA approaches regulation. Although most of these suits target the individual companies rather than the FDA, because companies seek to avoid similar situations in the future, large entities may actually seek increased regulation from the FDA to avoid tort liability. This backdrop has led to the current state of genetic diagnostic test regulation. Until recently, the FDA had not exercised its enforcement discretion to regulate most genetic diagnostic tests. Because the adverse effects from the unregulated market for genetic diagnostics are not likely to surface for many years due to their predictive nature, there is not likely to be a “Thalidomide moment” in Congress or the courts for such an industry. Furthermore, most industry players have benefited financially from the FDA’s neglect, and consumers are much less able than either large or small companies to lobby Congress for increased regulation.

B.  FDA Shift in Regulating Genetic Diagnostic Tests

The majority of genetic diagnostic tests fall within the category of “lab-developed tests,” which until recently, were completely unregulated by the FDA. Instead, laboratory procedures used in such tests were subject to minimal regulation under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) through the Centers of Medicare and Medicaid Services (CMS).[19] CLIA applies to all clinical laboratories that operate or provide testing services in the United States[20] and mandates that laboratories not accept materials from the human body for testing without adequate certification. In 1992, CMS issued regulations for implementing CLIA, creating “specialty areas” for laboratories that perform high-complexity tests, but did not include genetic diagnostic tests.[21] CMS had not instituted specific requirements for molecular or biochemical genetic testing laboratories by 2010.[22] Likewise, CLIA can only regulate a laboratory’s analytical validity (whether a test properly measures the characteristic it was intended to measure[23]), leaving clinical validity considerations (whether or not the test actually diagnoses the condition) up to the laboratory director.[24] The FDA currently regulates clinical validity for experimental diagnostics to some extent.[25] For example, suppose that a laboratory hypothesizes that a given gene sequence is associated with a particular disease. If the laboratory wished to offer this test to volunteers to bolster their confidence in this correlation, the FDA would require that the Internal Review Board of the institution oversee all such studies and inform the volunteers of the test’s experimental status.[26] More generally, the FDA regulates devices using biological materials outside the body (in vitro) differently depending on whether they are commercially available kits or lab-developed tests. The FDA regulates kits as medical devices,[27] which are organized into three classes. In contrast, lab-developed tests presently fall within the discretion given to the laboratory director under CLIA,[28] leading to two separate options for genetic diagnostic tests: one for commercially available kits and another for lab-developed tests administered by CLIA-regulated labs.[29] Many have complained that this creates an uneven playing field between these two categories.[30] In 2007, the FDA changed course and decided to regulate lab-developed tests more stringently to address the uneven field. There were a number of reasons for this change. Early lab-developed tests were limited to small entities, with close relationships between the physician or technician performing the test and the patient.[31] More recently, it became clear that the laboratory developing the test was actually a large corporation interacting with the patient only through the postal system.[32] The complexity of the tests had also increased in recent years.[33] Finally, the Secretary’s Advisory Committee on Genetic Testing had recommended that the FDA become more involved in pre-market review of these tests.[34] This 2007 guidance stated that the FDA would require pre-market review for a limited subset of lab-developed tests known as in vitro diagnostic multivariate index assays (hereinafter, “algorithm assays”). These algorithm assays analyze laboratory data using an algorithm to generate a result for diagnosing, treating, or preventing disease[35]. The agency was particularly concerned about this subset of lab-developed tests because they use proprietary methods to calculate patient-specific results that healthcare providers are unable to independently derive or confirm.[36] In 2010, the FDA decided not to issue final guidance on algorithm assays, and instead chose to pursue comprehensive regulation of all laboratory-developed tests.[37] In doing so, it recognized that the absence of oversight may make it easier for laboratories to develop and offer tests quickly, but believed that comprehensive regulation would create a level playing field.[38]

C.  The Three Classes of Devices for FDA Approval

This section examines the framework currently used for those genetic diagnostic tests (kits) that are regulated by the FDA. Because the FDA will likely proceed under a similar framework for future genetic diagnostics that fall within its enforcement discretion, I treat this classification system as a baseline for future suggestions for regulation in Part IV. Under the Medical Device Amendments of 1976,[39] once the FDA classifies a test as a medical device, it places the product into one of three classes of regulation. Class I, or low-risk, products require no approval before sale, although the FDA monitors adverse effect reports after sale.[40] Class I devices includes items like bandages where there are likely to be few ill effects even from device misuse.[41] Class II, or moderate-risk, products require clearance of a pre-market notification submission known as a 510(k).[42] The 510(k) submission requires a comparison of the submitted device with a legally marketed device and a showing that they are substantially equivalent.[43] There are also de novo classifications for Class II items that have no identifiable predicate device.[44] Class II devices may require additional clinical testing, but generally do not. Clinical testing in this context does not necessarily mean randomized, double-blind studies; submissions can rely on published studies or earlier data, although the FDA prefers studies where samples are prospectively collected.[45] The 510(k) requirements were envisioned as an efficient regulatory option: allowing companies to build upon established clinical and scientific evidence of safety.[46] As a result, the 510(k) option is more widely used than the Pre-Market Approval (PMA) option, discussed infra.[47] Finally, Class III, or high-risk, products require submission of an application for Pre-Market Approval.[48]  PMA is the FDA process of scientific and regulatory review to evaluate safety and effectiveness. These devices are those that support or sustain human life, are of substantial importance in preventing impairment of human health, or present an unreasonable risk of illness or injury, including patient misuse.[49] Examples include diagnostics for Hepatitis B and C and for HPV.[50] Regardless of whether the company follows the Class II or Class III pathway, the FDA may request that the company provide clinical data to support clearance or approval.[51] After the introduction of any product (of any class), adverse events must be reported to the FDA, even if such malfunctions do not cause any injury.[52] The FDA estimates that 50 percent of regulated devices are Class I, 42 percent are Class II, and only eight percent are Class III.[53] In the 2007 draft guidance, the FDA stated that most algorithm assays would be Class II or Class III devices, depending partly on the seriousness of the disease measured.[54] Although the requirements after classification are very clear, the FDA has been unclear about why certain devices fall into certain classes. Furthermore, given the deference accorded the FDA by the courts, it is difficult to change the classification of a device subsequent to FDA classification. The overlap between Class II and Class III indicates a need for increased clarity in device classification, including ex ante categories for genetic diagnostic tests. This is particularly necessary given the letters that the FDA has sent out to diagnostic test companies requesting that they submit information for approval and regulation pursuant to its enforcement discretion, discussed infra.

D.  Choice of Classification Delays Market Entry and Can Be Uncertain

The FDA’s decision to place a product into one of these three classes can make a substantial difference in both the expense associated with clinical trials and the amount of time that it takes before the product can enter the market. At the same time, empirical data shows that the European Union (EU) regulates many of the same products, but that these products are introduced many months or even years earlier in Europe than in the United States.[55] Because the FDA is planning to expand this regulation further, this indicates that previously unregulated products may be particularly affected by this disparity in time-to-market. The data suggests two solutions, (1) that the FDA create more stringent time limits on the approval of medical devices and (2) that the FDA provide greater transparency as to why they have chosen to classify a particular device into a given class, thereby enabling companies to better predict their expenses. A recent survey of 204 public or venture-backed medical technology companies compared the efficiency of the FDA’s regulation to equivalent EU practices and concluded that despite having similar safety outcomes, the FDA’s current practices are less efficient than the agency’s European counterparts.[56] Although some delays were caused by personnel changes during the approval process,[57] the average review time for a Class II product from first filing to clearance was ten months, suggesting that the FDA requirements are particularly onerous.[58] For those companies who communicated with the FDA prior to making a 510(k) submission, the total time from that first communication was nearly three years compared to seven months in Europe.[59] The average total cost for participants to bring a low-to-moderate risk 510(k) product from concept to clearance was approximately $31 million, with $24 million spent on FDA dependent activities.[60] For Class III products, the average review time increased to 54 months, almost four years longer than European agency review for the same products.[61] At least some of this delay stems from increased risk aversion to new products at the FDA.[62] For higher-risk products that require pre-market approval, the average total cost from concept to approval was approximately $94 million, with $75 million spent in stages linked to the FDA.[63] Because of the additional time spent in the regulation process, as well as the additional funds used, earlier expansions in FDA regulatory authority have been financially detrimental to the regulated industry. This extensive time frame is exacerbated by the uncertainty as to how the FDA will classify the newly regulated diagnostic tests. In 2010, the FDA sent several letters to genetic testing companies, including a letter to the genomic chip manufacturer Illumina.[64] The letter to Illumina stated that their chip (used to sequence genes) was classified as a device under the FDCA and had not been submitted for pre-market clearance or approval.[65] The letter further suggested that the agency could consider the chip a Class III device.[66] Similar letters were sent to deCODE Genetics, Navigenics and 23andMe, which use the Illumina chip for use in testing kits.[67] These letters stated that these products did not fall under the category of lab-developed tests because they were not “developed by and used in a single laboratory,”[68] and because the collection kits were distributed through a website or by a third party distributor.[69] All three letters intimated that such kits were considered Class III devices and required Pre-Market Approval submissions. A fifth letter was sent to Knome, which provides whole-genome sequencing and software to interpret this data.[70] Here, the FDA specifically stressed that as a software program that analyzes genetic test results generated by an external laboratory, the product is a diagnostic device that requires pre-market approval under the FDCA, and because it was not within a single laboratory, it was not considered a laboratory-developed test (which were then unregulated).[71] Fourteen additional letters were sent to other companies suggesting that their devices may require pre-market approval under Section 201(h) of the FDCA, although they did not suggest that they were Class II or Class III devices.[72] These letters suggest that these genetic diagnostic test manufacturers may need to go through the onerous Class III approval process, likely delaying the time-to-market for these devices even more.

E.  Historical Expansion of Regulation Has Been Alleviated by Commensurate Expansion in Patent and FDA-Mediated Data Exclusivity

This section shows that historical instances of regulatory expansion of previously unregulated products did have negative impact on those industries, and suggests that similar concerns about increased regulation of genetic diagnostic tests today are well-founded. Congress responded to negative results and complaints from industry by providing for greater patent exclusivity and for a new data-exclusivity backstop, which helped to reverse the trend in fewer drug approvals following increased drug testing regulation. These historical results suggest that there is no need to wait for a negative impact on diagnostic tests to aid the industry, particularly after many of these companies may choose to relocate to Europe, and provides support for the exclusivity solutions explored infra in Part III. As mentioned, the expansion of pre-market scrutiny by the FDA is not new. In 1962, the revolutionary Kefauver-Harris Amendments significantly expanded the FDA’s ability to regulate drugs before they went to market.[73] As a result, thirteen out of fourteen new products regulated by the FDA took longer to get to market in the United States than in other countries.[74] Without the protection of patents, it is unclear whether manufacturers would have invested the significant funds required for product approval.[75]Indeed, the delay in reaching market was already hurting the pioneer drug manufacturers by eating away at their patent term. In response, because generic manufacturers were subject to similarly stringent requirements, the pioneer drug manufacturers obtained court decisions preventing generic manufacturers from beginning clinical trials while a brand drug was still under patent.[76] The solution to these tactics was the Drug Price Competition and Patent Term Restoration Act of 1984 (hereinafter “Hatch-Waxman,” the names of its two sponsors), which tied the extension of patent terms to the period spent in the FDA approval stage.[77] The unusual thing about Hatch-Waxman is that in addition to providing a handy mechanism for resolving conflicts between pioneer drug manufacturers and generic drug manufacturers, it also provides for three-year data exclusivity for performing further clinical studies.[78] This means that for a generic company to gain FDA approval even after the expiry of the pioneer patent term, they must perform their own clinical trials rather than rely on the data from clinical trials performed by the pioneer drug manufacturer, or wait five years until this period of exclusivity expires. The Hatch-Waxman exclusivity period does not apply to medical devices, but the subsequent Safe Medical Devices Act of 1990 created a six-year data exclusivity provision for Class III devices[79] subject to PMA requirements.[80] As discussed earlier, there are very few Class III devices approved each year, but some Class II devices still require clinical trials. A baseline level of exclusivity for any diagnostic test that needs clinical trials for approval or reclassification by the FDA would help to alleviate the uncertainty created by the current patentability status discussed in Part III. To ensure that the expansion of regulation does not hurt companies, it is insufficient to simply apply the current medical device framework used for kits to all genetic diagnostic tests (including LDTs). Instead, we should pursue a framework that would reduce the significant times required in device approval, as well as clarify device classifications to ensure that diagnostic companies are prepared for the investment that the approval process would require. In addition, companies’ investments in clinical trials should be protected with either a patent or a data-exclusivity backstop.

II. Why We Need Better Regulation of Genetic Diagnostic Tests

As discussed in Part I, the FDA is currently overhauling the regulation of diagnostic tests to include additional regulation of genetic diagnostic tests. Additional regulation, particularly where FDA classifications of such devices is unclear, could be damaging for the industry. Critics find the expansion of FDA oversight into this sector as emblematic of FDA overreach stifling industry and suggest that the agency avoid expanding its enforcement discretion to regulate laboratory-developed tests.[81] However, this section discusses why additional regulation is necessary for these laboratory-developed genetic diagnostic tests and why this expansion is beneficial for consumers. Diagnostic tests detect the presence of a condition by measuring some quantity associated with the condition. Similarly, genetic diagnostic tests can predict an individual’s propensity for a condition based on their nucleotide sequence, as discussed infra. If such tests worked perfectly to predict disease and provided completely clear information to patients who use the tests, there would be no need for regulation. Unfortunately, this is not the case. First, I address common errors made in diagnostic genetic testing and the role that regulation may play in minimizing such errors. These common errors include: (1) errors caused by using molecular markers rather than sequencing the whole genome; (2) errors due to variations in gene expression between individuals; and (3) errors resulting from statistical studies relied upon in designing the test, which are compounded by the complexity of gene interactions. Oversight by a regulatory agency, such as the FDA, would reduce the occurrence of these errors and increase the utility of such tests for consumers. To understand these problems, this section discusses the principles that enable genetic diagnostic tests to function and explains where these principles break down, resulting in errors in the test results. All humans have strands of DNA comprising four fundamental nucleotides, Adenine (A), Thymine (T), Guanine (G) and Cytosine (C).[82] The sequence of these nucleotides form genes, which determine which proteins the body produces, and thus determines how the body functions.[83] Within every species, there are variants of genes known as alleles.[84] To use a simplified example, not all humans have the same eye color. However, we all have genes that affect eye color, such that some of us have a blue-eye color allele whereas others may have alleles for brown or green eyes.[85] Certain alleles are more likely to lead to diseased conditions than others. [86] For example, a mutant allele of a gene known to repair damaged DNA may be less effective at repairing such damages than the normal allele.[87] Because the DNA cannot be repaired, individuals with the mutant allele may have diseases caused by the damaged DNA, including colon cancer.[88] Therefore, a genetic diagnostic test may be able to predict the development of  cancer by detecting the presence of the mutant allele. One method for detecting the presence of a mutant allele is by sequencing all of the nucleotides. A possible issue with sequencing is that a genetic diagnostic test may return an incorrect sequence, reading “ATAC” when a subject actually has “ATGC”, demonstrating a failure of analytical validity.[89] A recent study compared the data of five individuals sequenced by two different genetic testing companies for thirteen diseases.[90] The results of the tests were 99.7% the same between the two companies, suggesting that the analytical validity for unregulated tests (the status quo) is quite high.[91] Even those companies that have been criticized for their inaccuracy do not have analytical validity thresholds below 99%.[92] Therefore, the issues in this section focus on issues aside from analytical validity.

A.  Molecular Markers That Do Not Correctly Predict the Presence of a Disease Allele

Although whole genome sequencing (where every nucleotide is sequenced) is the best way to detect the presence of certain genes, it currently costs approximately $20,000 per person.[93] To save costs, companies use molecular markers that are statistically associated with the presence of certain mutant alleles.[94] The use of molecular markers means that rather than sequencing A, T, G, and C, a company may only sequence the starting “A” and determine the remaining nucleotides based on their statistical analyses. A simplified example can help to illustrate how molecular markers are able to replicate full sequencing. Suppose that, in addition to having brown eyes and blonde hair, your mother also had an unusual allele that protected against the bubonic plague.[95] If your mother’s ancestors lived in areas where the plague was prevalent, those individuals who did not have this allele would be more likely to die. Soon, the population would have a high prevalence of the plague protection allele and the alleles surrounding that allele on the chromosome. If those alleles were for blonde hair and brown eyes, this population would likely share those characteristics as well. However, if the correlation between blonde hair and the plague allele were perfect, there would be no error from using the blonde hair as a marker for the actual allele. As discussed infra, such a perfect correlation, however, is seldom the case. Sometimes the statistical assumptions used may be incorrect, causing errors in the genetic results reported to consumers. Events such as “cross-over” between genes may cause such errors. Humans have two copies of each gene, one from each parent.[96] For example, while your mother might have blonde hair and brown eyes, your father might have black hair and blue eyes. Let us also assume that the genes corresponding to hair and eye color are next to each other on the same chromosome.[97] If you inherited one copy of each gene from each parent, you would have one copy with blue eyes and black hair and the other copy with brown eyes and blonde hair. Assuming that your father’s genes were dominant, no child would ever have blue eyes with blonde hair or brown eyes with black hair.[98] Therefore, to create beneficial variation in the population, chromosomes “cross-over” one another in sex cells, yielding new chromosome combinations like blue eyes with blonde hair and brown eyes with black hair.[99] Such natural variation makes the job of genetic diagnostic test companies more difficult. Returning to your mother’s hypothetical plague protection allele associated with her blonde hair and brown eyes, a genetic test company may always assume that any blonde-haired, brown-eyed individual possesses the unusual allele. However, if an individual has either had a cross-over event between the plague allele and their hair color allele, the genetic diagnostic test will yield incorrect results. An error like this can lead to a false negative or a false positive result. Such errors are more likely when the company is using a “weak-effect” marker—one where the correlation between the marker and the full nucleotide sequence is statistically tenuous. Additional regulation can alleviate this concern by either requiring full sequencing for certain regions of the genome that incur many cross-over events or by requiring that companies rely on multiple markers (or a single “strong-effect” marker) rather than a single “weak-effect” marker.[100]

B.  Mistakes in Genetic Test Interpretation Occur Because of Genetic and Environmental Variation

Another regulatory criterion is clinical validity, the accuracy of a test in actually diagnosing a particular condition.[101] Regulating clinical validity is more difficult because of the interpretation involved, and because of genetic concepts known as “penetrance” and “expressivity.” This is largely because consumers can find it difficult to understand that a heightened risk of breast cancer from a single gene can mean anything from never developing breast cancer to dying from the disease in the next ten years. Penetrance is the percentage of people with a particular genotype (nucleotide sequence) who show the diseased phenotype (physical manifestation of the allele).[102]Expressivity, on the other hand, is the intensity of the phenotype expressed by someone who possesses a particular genotype.[103] These variations among individuals present the most difficult challenges for genetic test regulation. Genetic diagnostic tests would be easier for consumers to understand if explained by a physician intermediary, who could show that the same mutation could lead to widely varying results in onset of the disease, as discussed in the earlier example. However, unlike similar non-genetic diagnostic tests, genetic diagnostics are sold and marketed directly to consumers, presenting a challenge for regulators. This problem is exacerbated because an interpretation error can lead to dire results. Suppose a company sequenced a subject’s genes for repairing damaged DNA and found that the woman carried the disease allele for BRCA1, a gene associated with the onset of breast cancer.[104] The woman may not develop breast cancer in her lifetime—a penetrance problem—or may develop a form that does not rapidly metastasize—an expressivity problem.  Indeed, very few diseases have 100% penetrance, where all of the individuals with a particular genotype have the corresponding disease.[105] As a result, interpretation of the test results remains difficult even with the knowledge of the full sequence.[106] Expressivity is a lesser concern for clinical validity because such variation arises once the individual has the disease. However, for serious diseases, individuals may take action based on these disease risk profiles when in reality their disease expression may be very low based on other risk factors, such as age and lifestyle.[107] As a result, much of the regulation in this area will depend on what information the company provides to consumers. If the genetic diagnostic testing company only provides the sequence with no additional information, very little regulation may be necessary. On the other hand, if the company provides extensive information, such as “breast cancer will appear at age thirty-four,” such claims require more regulation because consumers are more likely to rely on such information for treatment purposes.[108] The molecular markers problem compounded with expressivity and penetrance strengthens the case for regulation; even with a perfect correlation between “A” and “ATGC”, it is not clear that the disease associated with “ATGC” may present in the individual. It is even less likely that the disease associated with “ATGC” will present in an individual who actually has “AAGT”. Because of the research used to create these correlations, an individual with characteristics different from the majority population, particularly race, has a much higher likelihood of having test results that are not actually correlative.[109] These factors support the use of strong-effect markers, which move diagnostic companies closer to “perfect correlation”. As it stands, when companies sequence strong-effect markers, the agreement between multiple testing companies is higher than when companies use weak-effect markers (that have more moderate effects).[110] To use the earlier example, suppose your mother’s ancestors did not live in an environment where the plague was prevalent. Rather than facing evolutionary pressures when the plague allele was not present, individuals without the allele would survive at the same rate as the rest of the population. As a result, the population would show a very different distribution of alleles from the original example and the molecular marker of blonde hair would be less helpful. Regulation can mitigate such problems by requiring that consumers receive additional information about the studies that produced the genetic testing data and by creating greater incentives to include a wider population in initial genome-wide-association studies.[111]

C.  Mistakes in Genetic Test Interpretation Occur Because of Unforeseen Interactions between Genes

Not all genetic tests simply convey the likelihood of a single disease based on a single gene. Many tests predict propensity for a disease or for reoccurrence of a condition based on algorithms that approximate the disease pathway.[112] For example, scientists believe that many genes affect the development of schizophrenia.[113] By putting together multiple genotype markers from different locations on the genome, a company could predict an individual’s likelihood of developing schizophrenia. However, if there were errors in developing this algorithm, this clinical prediction would be wrong. Indeed, the chance of error is very high because the interactions between genes can be unpredictable and small-effect genes can be difficult to find. For instance, one study found that a predictive test using the cumulative effects of thousands of small-effect genes was more accurate at predicting the existence of schizophrenia than a test using only major-effect genes.[114] One way that this sort of error can occur is when a lab relies on a meta-analysis, a type of study that puts together data from multiple studies to deduce the interactions between different genes. The problem with meta-analyses is that the actual interaction between two particular genes may not have been tested directly, which could lead to incorrect conclusions. One possible cause for this error is when the two genes are on the same pathway that leads to the disease.[115] In most cases, if gene Z affects a function earlier in a molecular pathway than gene Y, it does not matter if the allele at gene Y carries a mutation, since the pathway would have already been altered due to a mutated allele at gene Z.[116] For a simple example, consider the genes that control certain properties of human hair: suppose that gene Z governs hair growth and gene Y governs hair texture. If the individual carries an allele at gene Z that prevents hair growth entirely, it does not matter if the allele at gene Y is for curly or straight hair, the individual will be unaffected. A meta-analysis of genes like Z and Y might infer increased effects from mutations at both genes when the actual effects remain the same when both genes are present. Even with perfect testing results, there are dangers in how companies present their data to patients.[117] Is it sufficient to say that the patient has an increased likelihood of developing disease sometime in their life? This may depend on the seriousness of the disease tested, and even the character of the testing service. The common errors with (1) molecular marker technology, (2) disease phenotype variation from expressivity and penetrance, and (3) the interaction between different genes show that regulation of genetic diagnostic tests is necessary. Therefore, continuing the status quo of minimal regulation is not a valid option, despite the possible adverse effects on industry.

III. Is a Per Se Patentable Subject Matter Rule for Genetic Diagnostic Tests the Solution?

Now that we have established that there must be some regulation for genetic diagnostic tests, this section examines e statutory or judge-made exclusivity for diagnostic tests to help underwrite the costs of such regulation and bolster the financial viability of genetic testing companies. One such option is a per se patentable subject matter rule. As we discussed earlier, with increased regulation of diagnostic tests, companies become more interested in protecting their investment that they have made in new technologies because of the additional financial outlays required to fund additional regulatory submissions and possible clinical trials. Patents can be one form of protection for these companies. Under the patent system, companies in the United States may file a specification and claims (which must fall within the scope of patentable subject matter and meet patentability criteria of novelty, non-obviousness, enablement and written description) in exchange for twenty years of exclusive rights to the claimed technology.[118] The patent system protects the patent-holder from others who copy their invention by allowing the patent-holder to sue for damages or an injunction if another company’s product infringes their patent.[119] Aside from patenting the genetic identity associated with the disease, companies may also be interested in patenting the algorithm that predicts the propensity for metastasis of tumors or the interaction of multiple genes. While the Hatch-Waxman framework helped counter he delay to market for drugs through patent-term extension, this solution is insufficient for genetic diagnostic tests, given the current uncertainty as to whether such tests fall within the scope of patentable subject matter. Therefore, to provide the same protection to diagnostic test companies as we do drug companies, we must create an equally effective exclusivity backstop. This may be accomplished by bringing all genetic diagnostic tests within the scope of patentable subject matter through the creation of a per se rule (making all genetic diagnostic tests “patent-eligible”), or through FDA-mediated data exclusivity, a feature also found within Hatch-Waxman. This section explores two issues with respect to the creation of a per se rule: (1) does it fit within the current patentable subject matter jurisprudence and (2) is patentability really necessary for the financial success of genetic diagnostic tests, or will the lesser protection of data exclusivity be sufficient? As this section will show, data exclusivity is a superior option because of the possibility of patent over-enforcement stifling innovation in the diagnostic test arena.

A.  A Per Se Rule Does Not Fit within the Patentable Subject Matter Framework

The current era of controversy over patentable subject matter began in 1980 with the seminal Supreme Court case, Diamond v. Chakrabarty, where the inventor, Chakrabarty, filed a patent application claiming “a bacterium from the genus Pseudomonas”—not merely the process claims for producing the genetically modified bacterium, but the bacteria themselves.[120] The Court determined that this bacterium was not an unpatentable natural phenomenon, but rather a non-naturally occurring manufacture or composition of matter, and therefore held it was patentable.[121] A related case from many years earlier is Parke-Davis & Co. v. H.K. Mulford Co., where Judge Learned Hand reasoned in dicta that purified adrenaline was patentable subject matter because it was materially different from the naturally-occurring adrenaline found in the human body.[122]Parke-Davis provides some of the support for the modern patenting of genes, reasoning that such genes are patentable because they are the purified forms—the inventor has separated the gene from the rest of the chromosome and from the other cellular matter in the naturally occurring state.[123] Four recent cases have brought into question the patentability of genetic diagnostic tests. This section discusses each case and determines that not only is the framework for patentable subject matter unpredictable and fact-specific for diagnostic tests, but also that a per se patentability rule would be unfeasible to implement without disrupting the patentability of unrelated industries. The first such case is Laboratory Corporation v. Metabolite Laboratories,[124] where the patent at issue claimed a process that detected deficiency of two vitamins, folate and cobalamin, by measuring the level of homocysteine in the body fluid. If the homocysteine levels fell within a particular range, the patent suggested that there was a vitamin deficiency.[125] In his dissent from the Court’s unusual decision to dismiss the case for certiorari improvidently granted, Justice Breyer wrote that the patent office should not have permitted this patent as it “claim[ed] a monopoly over a basic scientific relationship,” yielding an interpretation that would cause doctors’ medical diagnoses to infringe the patent.[126] Although Justice Breyer’s view was not ultimately adopted by the Court, his remark suggests that the area of patentable subject matter was far from settled and created an opening for subsequent cases.[127] The second major case relevant to our analysis of patentable subject matter is In re Bilski (later Bilski v. Kappos), which did not deal with diagnostic tests, but rather software patents.[128] The inventor, Bilski, claimed an algorithm for hedging.[129] The Federal Circuit disposed of Bilski’s patent by determining that an algorithm fell within the scope of patentable subject matter so long as it was implemented with a non-trivial machine or involved the transformation of matter, reaffirming the so-called “machine-or-transformation test”.[130] As Bilski’s method did not involve any such transformation of matter nor was it implemented in a non-trivial machine, the patent-in-suit was therefore held to be unpatentable.[131] Immediately, it was unclear how Bilski would apply to diagnostic tests and methods. The Federal Circuit applied the “machine-or-transformation test” in a third major case, Prometheus Laboratories v. Mayo Collaborative Services.[132] Prometheus is the exclusive licensee of two patents that calibrate the dosage of thiopurine drugs.[133] Although doctors had used such drugs to treat autoimmune diseases for many years, their efficacy was limited by non-responsiveness and drug toxicity in some patients.[134] To address this complication, the patents claimed the following “method of treatment”: (1) administer a particular dosage of the drug; (2) determine the levels of the drug metabolites found in the body fluid; (3) depending on the levels of those metabolites, either increase or decrease the dosage of the drug subsequently administered.[135] In the original Federal Circuit decision in 2009, Judge Lourie applied the “machine-or-transformation test” and found the requisite transformation in the method of treatment.[136] This overruled the District Court judgment that the patent was invalid because the administration was a trivial “data-gathering step” (rather than fundamental to the invention) and the claims relied on a naturally-occurring correlation.[137] Subsequently, when In re Bilski was appealed to the Supreme Court in Bilski v. Kappos, the Court found the “machine-or-transformation” test was too restrictive, and held that although the test could provide “a useful and important clue” as to the patentability of an invention, it was not the sole test for patentability.[138] In dicta, Justice Kennedy noted that the formalistic “machine-or-transformation test” may have the unfortunate side-effect of rendering “advanced diagnostic medical techniques” unpatentable.[139] Indeed, he was not alone in this fear: when a lower court invalidated Prometheus’ patent based on the Federal Circuit’s machine-or-transformation test, one response alleged that this decision would “threaten to invalidate the entire field of medical treatment and diagnostic patents on which the innovative and lifesaving biotech industry is built.”[140] When the Federal Circuit revisited Prometheus Labs after Bilski v. Kappos, they upheld the court’s initial finding of validity.[141] The court recognized that Congress envisioned a permissive approach to patent eligibility to ensure that “ingenuity should receive a liberal encouragement.”[142] The Federal Circuit found that the decision turned on whether the claims covered a natural phenomenon, whose patenting would entirely preempt the use of that correlation, or whether it was only a particular application of that phenomenon.[143] The court held that it was the latter, and therefore within the scope of patentable subject matter.[144] Whether the Supreme Court upholds the Federal Circuit’s decision is another question. The final major case I address is Association for Molecular Pathology v. United States Patent and Trademark Office, or “the Myriad Case.”[145] The patents enforced by Myriad Genetics claimed the particular nucleotide sequence associated with genes for breast cancer, in effect claiming isolated forms of the genes in the manner prefigured by Parke-Davis.[146] These patents enabled Myriad to have a monopoly over nearly all diagnostic tests for breast cancer caused by the two major breast cancer genes, BRCA1 and BRCA2,[147] causing outrage in the scientific community, as well as amongst patients seeking testing for susceptibility to breast cancer. Because this case deals explicitly with genetic diagnostic tests, it best illustrates the state of affairs that arises in the absence of regulation. Myriad offers a laboratory-developed test, and although the lab is accredited under the CLIA discussed supra, the FDA has never approved the actual test offered by Myriad.[148] Therefore, there is a greater chance that the test conducted by Myriad Genetics leads to incorrect results, and without a legally available second opinion, a patient is left without recourse.[149] In Judge Sweet’s opinion in the Myriad Case, he determined that genes were outside the scope of patentable subject matter and struck down the nucleotide sequence claims (and many other claims in the two patents).[150] The argument was that purified genes, despite whatever Judge Learned Hand may have said in Parke-Davis, are not “markedly different” from naturally-occurring genes, and thus the patent covered a product of nature rendering it invalid.[151] After this decision was appealed to the Federal Circuit, the United States Department of Justice (the “DOJ”) filed an amicus brief that effectively straddled the positions of the two parties, the DOJ supported the decision to disallow purified gene patents but felt that complementary DNA patents should remain valid.[152] The distinction that the DOJ made is that since complementary DNA does not contain introns,[153] it is sufficiently different from naturally-occurring genomic DNA.[154] In contrast, isolated DNA is no different from cotton fibers isolated from the cotton plant; it may be necessary to isolate a substance to make use of it, but by itself does not yield an invention.[155]. The DOJ distinguished the purified adrenaline in Parke-Davis from the purified gene in Myriad by raising a crucial point: with genes it is the similarity to the naturally-occurring substance, rather than the differences from purification, that yield the benefits of the patent for diagnostic and medical purposes.[156] Subsequently, the Federal Circuit reversed Judge Sweet’s District Court decision in part, holding that Myriad’s composition claims to “isolated” DNA molecules were patent-eligible, but finding that those claims comparing DNA sequences were patent-ineligible, as they only involved mental steps.[157] These inconsistent positions have created a great deal of uncertainty about which products would fall within the scope of patentable subject matter, which makes it difficult for companies to make ex ante investments in this technology. Indeed, the positions adopted by Judge Sweet in the Myriad Case and in the DOJ amicus brief might be seen as arbitrary. Both interpret the words of the Constitution, “to promote the progress of science and the useful arts” to exclude a type of invention that they do not feel would promote that progress without any clear scientific demarcation.[158] This analysis shows that there is no clear answer regarding whether genes should or should not be patentable, especially given that the patentability of genes and diagnostic tests is not clearly prohibited by the language of the patent statute.  If one conceptualizes the relationship between a segment of DNA and a disease as correlations, then they are no different from the correlations upheld by the Federal Circuit in Prometheus. If they are conceptualized as products of nature, the boundary shifts depending on how natural something must be to fall within that unpatentable class. Therefore, even where courts declare otherwise, the patentable subject matter question must be driven by policy: would it be beneficial for the progress of innovation to allow the patentability of these technologies? Given the flux of the law on this matter, it would be difficult to create a per se rule declaring that all genetic diagnostic tests were patentable subject matter. Not only would Congress or the courts need to deal with the many scientists and academics who oppose such a position, the rule itself would throw into question the entire jurisprudence dealing with patentable subject matter, with effects on other technologies, as discussed by Justice Kennedy in Bilski.[159] Therefore, it would be unwise for the genetic diagnostic test industry to rely on predicting the direction of the Supreme Court in deciding whether their particular test would fall within the scope of patentable subject matter. Most importantly, even if Congress supported such a rule, it is not clear that blanket patent-eligibility would “promote the Progress of Science and the useful Arts,” as the Intellectual Property Clause of the Constitution requires,[160] as shown by the innovation-stifling actions taken by some patentholders in this arena, as I discuss next.

B.  In the Absence of a Per Se Rule, Companies Still Need a Baseline Level of Exclusivity

In the absence of a per se rule, is the solution to have extensive regulation of genetic diagnostic tests, but not patentability? It is crucial to remember that the Myriad Case took place against a backdrop of no regulation, and even then, companies were concerned about their initial investment in the technology. This section discusses the possibility of data-exclusivity as a lower tier of protection that would enable diagnostic test companies to recoup investment in new tests even if courts find that such tests fall outside of the scope of patentable subject matter. Based on this discussion, I conclude that FDA-mediated data exclusivity for all tests that require clinical testing for approval is the best option. Many articles have discussed blocking patent issues in gene patents.[161] Some have argued that patents are not necessary to incentivize the development of genetic diagnostic tests.[162] Gene patents’ claims cover nearly twenty percent of the human genome, and those interested in doing research on those claimed genes must overcome the hurdle of whatever costs the patent-holder has placed on her patent.[163] University researchers have also asserted that “[the prospect of] patents do not affect research in this area” as most research is done in a university setting, funded by government grants.[164] At the same time, private companies conduct a large amount of research building on university research in developing diagnostic tests,[165] which definitely does depend on patents.[166] A recent study found that at least one patent in either Europe or the United States covered 19 of the 22 most prevalent hereditary diseases, and that many were covered by several patents.[167] In both the United States and Europe, universities are the top patent-holders,[168] and most genetic diagnostic patents originate in the United States,[169]which the study authors speculate stems from the liberal patent policy in this country. In Heller and Eisenberg’s seminal article, the anti-commons is characterized as many cross-cutting patents that require new entrants into the field to license from each of these actors.[170] However, if patents can be circumvented or “designed-around,” no such licenses are necessary. Therefore, the current state of genetic diagnostic patents is not necessarily an anti-commons as imagined by Heller and Eisenberg: as the Huys study recognizes, although 25% of patents claim particular genes, only 3% of these patents cannot be circumvented.[171] However, 38% of these gene patents claimed diagnostic methods, which are generally more difficult to circumvent.[172] The Huys study made no substantive conclusions about the existence of any patent thicket, but noted that the uncertainty associated with the patentability of such tests created more difficulties for inventors in the development of technologies associated with gene patents.[173] More recently, a series of extensive studies, led by Professor Cook-Deegan, focused on ten hereditary diseases and the effects of patents on their treatment and research.[174] Here, I focus firstly on breast cancer and associated cancers, and then on Alzheimer’s Disease tests, given their high rates of occurrence and significant impact on the population. Breast cancer is a particularly lucrative disease for patent-holders like Myriad. For breast cancer, Myriad is the exclusive licensee and sole provider of tests based on BRCA1 and BRCA2 in the United States. For colorectal cancer, tests are available from multiple laboratories (including Myriad), but none have the same monopoly position as Myriad does in breast cancer testing.[175] Therefore, the comparison between breast cancer and colorectal cancer testing is a useful metric of the effects of diagnostic patents. Even as a monopoly entity, Myriad often acts in the public interest. As of August 2008, Myriad has submitted over 18,000 entries for the 2,600 unique mutations to the Breast Cancer Information Core database (a publicly available central repository for information regarding mutations and polymorphisms in breast cancer susceptibility genes).[176] However, Myriad has also limited certain types of research by using a very broad definition of what constitutes infringing—when the Genetic Diagnostics Laboratory began testing patients using National Cancer Institute protocols, while additionally providing breast cancer results to patients, Myriad claimed that this constituted patent infringement.[177] Myriad does not enforce its patents against non-commercial research or against laboratories providing tests that it does not sell,[178] although its ambiguous policy may still create a chilling effect. In contrast, the studies found no similar chilling effect with the two tests offered for colorectal cancer.[179] In House Judiciary Committee hearings, some scientists argued that Myriad purposely did not adopt more cost-effective testing methods.[180] However, the sequencing methods used by Myriad for breast cancer tests are actually cheaper than those used by Myriad and other providers for similar colorectal cancer tests; if the technology has advanced, Myriad’s competitors have not adopted it either.[181] Still, even assuming that Myriad is using the most cost-effective testing methods, its tests remain prohibitively expensive compared to molecular marker tests, breast cancer gene sequencing as offered by Myriad costs $2400 per patient on average, compared with $99 for the 23andMe test that includes preliminary results for various breast cancer risk factors, including breast tissue density. Similarly, Alzheimer’s Disease, which cost the U.S. healthcare system $61 billion in 2002, is a disease where patents can be very lucrative.[182] The majority of those with the disease have late-onset Alzheimer’s, which has only one clearly established risk factor known as APOE.[183] A small percentage of cases arise from early-onset Alzheimer’s, for which there are three dominant mutations found in one of three genes.[184] In the United States, genetic testing for Alzheimer’s is provided almost exclusively by Athena, who has licenses to three major Alzheimer’s gene patents,[185] and offers the test for $475. However, Graceful Earth, a direct-to-consumer testing company, produces a non-FDA approved test for Alzheimer’s for $280,[186] using indirect markers rather than the strong-effect markers used by Athena.[187] In a well-regulated environment, consumers could expect near certainty in their risk results provided by Athena or Myriad, and a reasonable certainty from their marker tests from Graceful Earth or 23andMe. However, such regulation is costly for companies. In the absence of any data exclusivity or patent protection, it is likely that Athena or Myriad would need to provide extensive clinical data to the FDA in order to market their products, while Graceful Earth and 23andMe would have used that data free of charge and benefited from Athena or Myriad’s initial investment. Such copying by other actors might make inventors like Athena or Myriad reluctant to take on the initial burden under additional FDA regulation. The crucial question becomes whether in the presence of additional regulation we need the complete protection offered by patents—20 years of exclusivity in exchange for the information disclosed to the public—or whether a lower-tier of exclusive protection such as clinical data exclusivity would suffice.[188] The answer seems to be that a lower tier of protection would be sufficient, even beneficial. Patents are often enforced indiscriminately against copyists and innovators alike, stifling new growth in this field. A lower tier of exclusive protection would enable new genetic diagnostic tests to be developed in a short period, but allow new innovators to protect their investment in the technology and in producing clinical data for the FDA. Furthermore, the disclosure provided by the patent system in this field is minimal compared to the information found in scientific publications, suggesting that the bargain struck by the patent system may not be fulfilled in the area of genetic diagnostic tests.[189] Furthermore, concerns about lower test quality from lack of competition could be allayed by stringent FDA regulation of these tests.[190] Therefore, a per se patentable subject matter rule is not the solution for protecting the interests of consumers and genetic diagnostic test developers. Not only would it fit poorly within the current patentable subject matter framework, but it is also not the best promoter of innovation. At the same time, a baseline level of exclusivity for a shorter period is required to allay some of the uncertainty of diagnostic test developers, particularly given extensive regulation by the FDA. For these reasons, innovation policy would be better served by granting genetic diagnostic test developers data exclusivity rather than patent protection.

IV. Suggestions for a New Regulatory Regime for Genetic Diagnostic Tests

With the earlier discussions in mind, this section presents a comprehensive framework for the regulation of diagnostic tests. In response to the regulatory problems discussed in Part II, some legislators have suggested the creation of an entirely new department within the FDA to address the unique needs of genetic diagnostic tests.[191] However, such drastic measures are unnecessary. Notably, I do not recommend that the FDA change current procedures for testing analytical validity (allowing the CMS to continue such regulation), nor should the FDA change significantly the current three-class system for medical devices before applying it to genetic diagnostic tests. Instead, I propose the following five simple changes to the regulatory system for genetic diagnostic tests at the FDA.
  1. Increase Requirements for Labeling and Genetic Counseling That Keep up with Developing Technology through Monthly Meetings
With a genetic diagnostic test, adverse consequences from an incorrect result can be significant, leading to mismanagement of the disease or unnecessary surgery.[192] In light of the known errors in the genetic test methods outlined earlier, I would add more to the FDA’s analysis. Firstly, there should be different oversight for those tests that rely on molecular markers and for those that rely on sequencing. The former should have clear labeling outlining how molecular markers may not predict your risk at all, particularly for patients of certain backgrounds. Molecular marker tests that frequently lead to disparate results when using different markers should be required to use multiple-effect markers for the same gene, or consistently use strong-effect markers. Secondly, the FDA should mandate expansive labels outlining factors required in the interpretation of diagnostic tests. In a long-term study of effects from a representative genotyping test, researchers found no indications of test-related distress in 90.3% of participants.[193] However, the Bloss study’s authors acknowledged the unusual demographics of the study cohort: most of those who completed the study had some post-graduate education, and of the 44% of participants who failed to follow up after testing, most had completed a four-year college degree.[194] To address this artifact, the FDA should expand the labeling requirements in the test results for the presentation of certain disease alleles. Many companies that provide genotyping for multiple markers have associated websites and blogs that are continually updated with new information associated with the subject’s disease alleles. If the initial test results are provided on the website, this format is adequate. If they are communicated via mail, the FDA should mandate associated genetic risk information and context for the most severe disease alleles in this printed report. Thirdly, certain tests should require consultations with a genetic counselor. Informally, the FDA has indicated that the availability of consultation with certain tests will be taken into account in the approval process, but no official guidelines have mentioned such treatment.[195] I recommend these consultations despite the Bloss study’s finding that only 10% of cohort participants elected free genetic counseling,[196] partly because 26% of cohort participants elected instead to show their test results to their physician. Because most physicians in the United States feel ill-equipped to deal with such genomics data,[197] these results suggest that genetic counselors should attempt to augment the role of the physician, which includes taking into account family histories and environmental factors—elements that can affect the expression of the gene in question and help reduce errors from penetrance and expressivity—when interpreting test results. Occasionally, the FDA can choose to allow a company to only offer the particular genetic diagnostic test to members of a particular population or racial cohort or require additional scientific studies for support from the manufacturer, as many genetic diagnostic tests have fidelity within certain populations.[198]  The FDA has a reasonably well-defined set of non-binding regulations governing the collection of race and ethnicity in clinical trials, and in these regulations it requires application sponsors to analyze whether dosage must be altered for certain sub-groups.[199] However, although the FDA is cognizant of these issues, it may be difficult to give proper weight to each issue when a test offers data for multiple traits, each prefaced on different studies.[200] Finally, every month, a committee should convene in the FDA to determine future regulations and options for genetics-based diagnostic tests. This committee should have limited conflict-regulation options.[201] There should be options for regulations that deal with race and sex-based differences in the test data. Although the FDA has stated that it would be difficult to hold these meetings with regularity to address new developments in the field, it would be difficult to regulate this technology without them.[202] Until a decade ago, most genes were discovered using extensive family histories from cultures that kept good records and often had a history of inbreeding. With the advent of better sequencing technology, genome-wide association studies have become more widespread.[203] As a result, the information that is translated into diagnostic tests, particularly genetic diagnostic tests, is rapidly advancing. This means that a command-and-control approach will likely become obsolete every few years. This suggestion allows the FDA to move incrementally, detailing how the present medical device framework will apply to diagnostic tests, with frequent consultation from advisory groups. These groups can specifically examine the problems with genetic tests discussed earlier: expressivity, penetrance and, complex traits involving multiple genes. As genes become better-defined, these committees can ensure that tests do not rely on outdated data.
  1. Provide Data-Exclusivity for Class II Tests That Require Additional Clinical Studies.
The FDA has admitted that it does not take into account costs or the patent system in its analysis.[204] However, as discussed supra, biotechnology and pharmaceutical companies do take into account the protections that the patent system offers when deciding which products to pursue on a commercial scale.[205] Furthermore, the patentability of these diagnostic tests that the FDA seeks to regulate is not clear. While Judge Sweet and the subsequent amicus brief by the Department of Justice have made a reasonable argument to limit the patentability of the “purified form of a gene,” this position does not clarify the patentability status of other genetic products. Nor will such questions be resolved quickly. Indeed, the biggest lament of biotechnology companies has been that the status of these products is so uncertain that it makes it difficult to invest in these new technologies. At the same time, numerous studies on the development of genetic diagnostic tests for breast cancer, colorectal cancer, and Alzheimer’s Disease have shown that much of the research that has led to these discoveries is not privately funded, but rather funded by the government.[206] In fact, it is not until the commercialization stage that private actors generally enter the picture. In the previously open regulatory climate, the comparatively small investment required for transferring a laboratory invention to a commercial product meant that patents on such technologies were not always beneficial, and occasionally harmful when enforced stringently. However, the regulatory situation has changed, which means that those interested in providing diagnostic tests must invest more to bring their tests to market. Given the comparatively smaller investment required for developing diagnostic tests compared to pharmaceutical drugs,[207] as well as the smaller scope of clinical trials that must be completed, there is an appropriate role for the FDA to provide a baseline level of data exclusivity, expanding the current Safe Medical Devices Act regime and exclusivity regimes under the Orphan Drug Act or the Pediatric Exclusivity Act.[208]In the latter models, companies receive data exclusivity from the FDA when they voluntarily undertake clinical studies suggested by the FDA to allow the use of their current drugs on children or to treat rare diseases. The Pediatric Exclusivity Act provides six months exclusivity for all uses of the drug, not just pediatric uses, while the Orphan Drug Act provides an extraordinary seven years of exclusivity.[209] Here, a three-year exclusivity term for Class II diagnostics can incentivize companies and even university groups to go the extra step of preparing data for regulation without worrying about rival groups using their test data for their own approval, creation of a performance standard or the classification of their device.
  1. Create Mandatory Maximum Times for Class II and Class III Approval Processes or Increase the Scope of Class II Devices to Decrease Overall Approval Times.
Suggested guidelines for Class II and III approval processes include: (a) no 510(k) clearance for an in vitro diagnostic should take longer than 6 months from start to finish and (b) no PMA for an in vitro diagnostic should take longer than 12 months from start to finish. It is crucial that in providing an additional safety factor, these additional regulations do not also institute a new obstacle. The Center for Devices and Radiological Health has a two-fold mission: to protect public health while promoting public health through new medical technologies.[210] This second mission cannot be fulfilled through an inefficient approval process. In implementing these new time-frame limitations, the FDA must also implement a more transparent monitoring system to track how long the approval process really takes. The FDA has often argued that this additional time provides additional safety for consumers. Firstly, from studies discussed supra, it is evident that although some additional time can be useful, the extreme amounts of time that the FDA has taken have not translated into commensurate benefits for consumers.[211] Furthermore, it is not clear that the safety gains from such delays outweigh the adverse effects on patients from delays in approving life-saving drugs.[212] The timelines suggested here are based on the average review times for equivalent products in the European Union and the review times that the FDA itself espouses in the FDA white paper discussed earlier. However, it may be insufficient to require shorter review times. As an FDA white paper previously addressed after the passage of the Prescription Drug User Fee Act, the review times suggested have been contemplated by the agency.[213] Therefore, I also suggest that in order to classify genetic diagnostic tests into Class III, the burden be placed on the FDA to show why prior adverse actions by individuals have necessitated this stringent classification, creating Class II and the 510(k) clearance process as a default position for most genetic diagnostic tests.
  1. Solicit Complaints Directly from Consumers
The complaint procedures for faulty tests must be streamlined because under the proposed scheme consumers with direct access to genetic diagnostic tests will use the software rather than just healthcare providers. All companies with web-presences—even if they do not have a software or computational test—must clearly link patients to a complaint page provided by the FDA, currently available through the MedWatch system.[214] Indeed, experts estimate that the current voluntary reporting system by physiciansvastly reduces the number of complaints reported to the agency, or only about ten percent of all adverse events.[215] Consumers may submit such complaints for slow-turnaround in tests, a frequent complaint made about small-testing operations, in addition to incorrect test results and misleading language.  Turnaround time can be important: for example, PGxHealth, a commercial provider of genetic tests, returns results within two months, compared to one year for research-based providers of the same genetic tests.[216]Many companies have offered direct-to-consumer genetic testing earlier in the treatment cycle than other diagnostic tests, treating them as a “first-pass-through” before submitting a patient to extensive medical treatment or physician analysis.[217] If genetic diagnostic test results are not available quickly, this role as a preliminary diagnostic measure is lost.
  1. Require Minimal Regulation of Purely Software-Based Genetic Diagnostic Tests
Despite some jurisdictional issues, it is clear that software-based tests are “systems intended for use in the diagnosis of disease or other conditions” within the meaning of the Medical Device Amendments of 1976, even though they do not directly involve the withdrawal of samples from a patient. As whole-genome sequencing becomes an increasingly viable option for consumers,[218] such software-based tests will become more common. Armed with a copy of their full-sequence, users can run their data through frequently updated software that takes into account more recent meta-analyses and scientific studies. Indeed, such software is similar to the PrometheASE program already used by many in analyzing the raw data provided by 23andMe and Navigenics.[219] If the FDA could only regulate the companies who actually take samples from their clients to create the whole-genome sequences, they would not be regulating clinical validity at all, but the analytical validity of high-throughput sequencing machines, a mostly useless task. Furthermore, it would be unusual to require clinical trials from entities that may consist exclusively of programmers. If the programmers have properly designed the software from existing data in published papers, the FDA should easily complete the verification of such data. This situation may require the FDA to alter the types of individuals who work in their testing division and require a more ad hoc approach to such tests, such as including more individuals familiar with computer programming or statistical techniques and involving the creation of trials that depend on paper data, or data that is not from clinical trials of the particular genetic test, but previously published research on the particular genetic correlation. If the test cannot be verified based on published data, then the programmer cannot make them available to consumers. If the programmer wishes to take on the burden of clinical testing to have the option of offering it to consumers, this option should be left open. Additionally, with software-based tests and other tests that are updated frequently, the FDA should implement a simple online submission system for previously verified tests. This will function differently from pre-market or post-market options, and act as more of a constant monitoring system: the entity seeking approval should submit the change to the test along with the study that supports the change, allowing minimal FDA oversight to verify test changes.

V. Application of Proposed Regulatory Regime to a Challenge for the FDA

This section analyzes the application of this regulation to a test that flouts the conventions for both patents and FDA regulation, what Nature describes as “The Renegade Gene Test.” This test—also known as the Salzberg test is a computer program that can check any genome for 68 gene mutations that increase the risk of breast cancer and other cancers.[220] Although there are over 1000 gene mutations allegedly linked with the occurrence of breast cancer, the programmers believe that their program can be easily expanded to include the effects of those mutations when the time comes. Their software is freely available under an open source license that allows others to use, modify, and redistribute the program.

A.  Regulation of Analytical Validity and Classification of the Tests

Under the suggested regime, neither the Myriad test nor the Salzberg test would require any testing for analytical validity. Since the Salzberg test is an open source framework, this might create problems, but would likely be resolved through the current user generated content model that has been successful with Linux and Wikipedia. Since breast cancer is a serious disease, both the Myriad test and the Salzberg test could fall under either Class II or Class III. Because women may undergo preemptive mastectomies and other serious treatment after taking the Myriad test, but might not pursue the same options under the Salzberg test, Salzberg might argue for a lower level of regulation. As a result, Myriad could be regulated as a Class III device, while Salzberg could be regulated as a Class I or II device. Regardless, the Myriad test would likely be approved with little difficulty within the time frames suggested supra, although the FDA might require warnings addressing the utility of a negative result on the test, as many breast cancer patients do not necessarily have mutations in either BRCA1 or BRCA2, two genes associated with the onset of breast cancer. Salzberg would first argue that computational tests fall outside of FDA’s regulatory jurisdiction. This argument would likely be unsuccessful because computational tests clearly fall within the language of the Medical Device Amendments of 1976.[221] The approval of the Salzberg test would also be somewhat difficult. Because it only looks at 68 gene mutations when 1000 are possible, the test does not “represent a comprehensive list of BRCA mutations.”[222] Since the clinical studies published on breast cancer do not rely on such a small subset of gene mutations, the FDA could not rely on the computational test providing the same accuracy as if it had 1000 mutations. At this juncture, this Note has recommended that the FDA refrain from requiring full clinical trials from computational test providers. Instead, the FDA may require that Salzberg either cite an earlier study that demonstrates that 68 mutations can predict the disease with the same accuracy as 1000 mutations, or at least show the level of accuracy provided using these 68 mutations (or molecular markers, as the case may be). It is likely that Salzberg would need to refine the test to include all 1000 mutations because of the considerable expense involved in conducting their own clinical trials. Even if Salzberg and Pertea provided a test that did use all 1000 mutations, the FDA would likely require them to place certain warnings on their website detailing the possible errors from inputting in the raw genome data on one’s own, as well as a link to the FDA complaint page suggested supra.

B.  Possible Patent Protection and Data Exclusivity

At minimum, the Salzberg test would infringe upon a number of already existing gene patents. However, because individuals would have to input their own genetic data to perform the actual test covered by the patents, Myriad could only sue the programmers Salzberg and Pertea for inducing infringement, rather than direct infringement.[223] Let us suppose that the Supreme Court strikes down the Federal Circuit’s Myriad decision and that the only option is for data-exclusivity under the plan outlined in Part IV. Given the clear correlations available between the BRCA1/BRCA2 genes and breast cancer, it is unlikely that Myriad would have needed additional clinical trials for approval at the FDA. Since it does not need to submit new data and can rely on published data, there is no option for data exclusivity at the FDA and Myriad would receive no protection from those who wish to replicate its test. This is likely a good thing, given that the earlier studies (discussed supra in Part III) show that more options for breast cancer tests would be available at cheaper options if the Myriad patents were not enforced as stringently. However, it could also cause future companies like Myriad to avoid publishing its results when a new gene is discovered, particularly as the patent system is no longer an option and thus there is no mechanism forcing disclosure. However, this threat is largely illusory, as the identity of the gene can be derived from the publicly available test. Therefore, the proposed regulatory scheme in this paper the proper incentives for both innovators and consumers.


This paper could not possibly cover all of the issues arising from the regulation of diagnostic tests or the questions of their patentability. The proposed regulation aims to minimize the effects of three common errors in genetic diagnostic tests affecting consumers by increasing labeling and genetic counseling requirements and adopting new testing protocols, while reducing ex ante uncertainty for genetic diagnostic test companies by clarifying classification regimes and approval times and providing for a data exclusivity back-stop of three years if the test is found to be outside the scope of patentable subject matter. The regulation also aims to improve FDA administration by enhancing adverse effect reporting and maintaining monthly meetings to address the rapid improvements in the field.
* Copyright © 2012 by Sharonmoyee Goswami. J.D. Candidate, 2012, New York University School of Law; B.S.E., 2009 (Chemical Engineering), Princeton University 2009. Many thanks to the Honorable Robert A. Katzmann for his invaluable feedback, and to Professor Richard Epstein for his helpful comments. I would also like to thank the staff of the Journal of Intellectual Property & Entertainment Law, the Notes Editors of the Journal of Legislation & Public Policy, and Ambrose Carr for their thoughtful edits.
[1] Juliana Han, Note, The Optimal Scope of FDA Regulation of Genetic Tests: Meeting Challenges and Keeping Promises, 20 HARV. J. L. & TECH. 423, 427 (2006-2007).
[2] Id.
[3] Meeting Notice, 75 Fed. Reg. 34463 (June 17, 2010).
[4] Data exclusivity means that competitors are not permitted to rely on the pioneer drug company’s trials for their own approval process. Rather, they must perform their own trials for FDA approval.  See Small Business Assistance: Frequently Asked Questions for New Drug Product Exclusivity, FDA.GOV, http://www.fda.gov/Drugs/DevelopmentApprovalProcess/Small BusinessAssistance/ucm069962.htm (last visited Nov. 29, 2011).
[5] See Prometheus Labs., Inc. v. Mayo Collaborative Servs., 628 F.3d 1347, 1349–50 (Fed. Cir. 2010), cert. granted, 131 S.Ct. 3027 (June 20, 2011) (No. 10-1150).
[6] Richard B. Stewart, The Reformation of American Administrative Law, 88 HARV. L. REV. 1667, 1671–76 (1975).
[7] See H. Thomas Austern, Philosophy of Regulation: A Reply to Mr. Hutt, 28 FOOD & DRUG COSMETIC L.J. 189 (1973).
[8] Id. at 191 (quoting Justice Cardozo).
[9] FDA History Part I: The 1906 Food and Drugs Act and Its Enforcement, FDA.GOV (June 18, 2009), http://www.fda.gov/AboutFDA/WhatWeDo/History/Origin/ucm054819.htm.
[10] Federal Food, Drug, and Cosmetic Act, Pub. L. No. 75-717, 52 Stat. 1040 (1938).
[11] FDA History Part II: The 1938 Food, Drug and Cosmetic Act, FDA.GOV (June 18, 2009), http://www.fda.gov/AboutFDA/WhatWeDo/History/Origin/ucm054826.htm (the culprit was a miracle drug known as “Elixir Sulfanilamide” mixed with ethylene glycol, or antifreeze, that caused the deaths of 100 people, many of them children).
[12] MORRIS UDALL, 87TH CONG., THALIDOMIDE: A CRIPPLING DRUG PROMISES GREATER PROTECTION FOR CONSUMERS (Aug. 17, 1962), available at http://www.library.arizona.edu/exhib its/udall/congrept/87th/620817.html.
[13] Peter Barton Hutt, The Transformation of United States Food and Drug Law, J. ASS’N FOOD & DRUG OFFICIALS, Sept. 1996, at 1. Indeed, this has not changed even today.  In April 2011, the FDA was criticized at a Senate Hearing for allowing high-risk artificial hips to be sold without sufficient stress-testing. Barry Meier, Group Faults FDA on Oversight of Devices, N.Y.TIMES, Apr. 12, 2011, at B10; see also A Delicate Balance: FDA and the Reform of the Medical Device Approval Process Before the S. Special Comm. on Aging, 112th Cong. (2011) (statement of William Maisel, Deputy Center Director for Science and Chief Scientist of the Center for Devices and Radiological Health, FDA).
[14] PDUFA created a fee system for the FDA to allow the agency to increase its small budget and approve drugs faster. Prescription Drug User Fee Act § 502, 21 U.S.C. § 379g (1992). A similar framework was created some years later for medical devices.  Medical Device User Fee and Modernization Act of 2002, Pub. L. No. 107-250, 116 Stat. 1588 (codified as amended in scattered sections of 21 U.S.C).
[15] Known as the Drug Price Competition and Patent Term Restoration Act, Pub. L. 98-417, 98 Stat. 1585 (1984).
[16] Hutt, supra note 14, at 1.
[17] Id.
[18] A good example is FDA regulation of Good Manufacturing Practices, where the agency created a minimum Safety Assurance Level (SAL) through a guideline, which they sought to enforce. United States v. Bioclinical Sys., Inc., 666 F.Supp. 82, 83 (D.Md. 1987) (finding that the FDA may not enforce the guideline).
[19] Stuart Hogarth et al., The Current Landscape for Direct-to-Consumer Genetic Testing: Legal, Ethical & Policy Issues, 9 ANNU. REV. GENOMICS HUM. GENETICS 161, 170 (2008).
[20] Id.
[21] Id.
[22] Misha Angrist et al., Impact of Gene Patents and Licensing Practices on Access to Genetic Testing for Long QT Syndrome. 12 GENETICS IN MEDICINE S111, S124 (Supp. 2010).
[23] Han, supra note 2, at 429.
[24] Id.; Hogarth et al., supra note 20, at 168.
[25] Courtney Harper, Remarks at the Public Meeting on Oversight of Laboratory Developed Tests 35 (July 19, 2010) [hereinafter Meeting Day 1] (transcript available at http://www.fda.gov/downloads/medicaldevices/…/ucm226203.pdf).
[26] Id.
[27] 21 C.F.R. § 809 (2006); Hogarth et al., supra note 20, at 172.
[28] Gail H. Javitt & Kathy Hudson, Federal Neglect: Regulation of Genetic Testing, ISSUES IN SCIENCE AND TECHNOLOGY (2006), http://www.issues.org/22.3/javitt.html.
[29] Meeting Day 1supra note 26, at 14–15.
[30] Id. at 35.
[31] Id. at 17.
[32] See Id. at 26–27.
[33] Id. at 17–18.
[35] Medical Devices; Classification/Reclassification; Restricted Devices; Analyte Specific Reagents, 62 Fed. Reg. 62,243, 62,250 (1997).
[36] Hogarth et al., supra note 20, at 173; Draft Guidance: In Vitro Diagnostic Multivariate Index Assays, 72 Fed. Reg. 41081 (proposed July 26, 2007), 4 [hereinafter Algorithm Assay Draft Guidance], available at http://www.fda.gov/downloads/MedicalDevices/DeviceRegulation andGuidance/GuidanceDocuments/ucm071455.pdfMeeting Day 1supra note 26, at 25–26.
[37] Meeting Notice, 75 Fed. Reg. 34463 (June 17, 2010).
[38] Id.
[39] 21 U.S.C. § 360(k).
[40] See Nutraceutical Corp. v. Von Eschenbach, 459 F.3d 1033, 1036 (10th Cir. 2006) (discussing the numerous Adverse Event Reports that the FDA received from customers after taking Ephedra); Adverse Event Reporting System (AERS), FDA.GOV, http://www.fda.gov/Drugs/ GuidanceComplianceRegulatoryInformation/Surveillance/AdverseDrugEffects/default.htm (last visited Nov. 29, 2011).
[42] 21 U.S.C. § 360(k) (2010); Algorithm Assay Draft Guidance, supra note 37, at 7–8.
[43] 21 C.F.R. §§ 807.81-807.100; Algorithm Assay Draft Guidance, supra note 37 at 11.
[44] Katherine Serrano, Office of In Vitro Diagnostic Device Evaluation and Safety, Meeting Day 1supra note 26, at 50 (prior to the de novo process, all new devices were by default Class III devices even if they were not high-risk). The FDA is currently overhauling some of its 510(k) approval pathway, including streamlining the de novo application, creating a panel of external experts and a Center Science Council, and establishing a public database of medical device information. Plan of Action for Implementation of 510(k) and Science Recommendations (January 2011), available at http://massdevi.server265.com/podcast/510(K)_Implementation_ Chart.pdf.
[45] Katherine Serrano, Meeting Day 1supra note 26, at 54–55.
[47] Id.
[48] 21 U.S.C. § 360e (2010).
[49] Algorithm Assay Draft Guidance, supra note 37, at 13.
[50] Katherine Serrano, Meeting Day 1supra note 26, at 49.
[51] MAKOWER ET AL., supra note 47, at 12.
[52] Katherine Serrano, Meeting Day 1supra note 26, at 57.
[53] Id. at 45.
[54] Algorithm Assay Draft Guidance, supra note 37, at 8.
[55] MAKOWER ET AL., supra note 47, at 7.
[56] Id. at 20.
[57] Id.
[58] Id. at 22. This delay is much longer than the three month timeline claimed by the FDA’s own data. See id. at 21.
[59] Id. at 22.
[60] Id. at 7.
[61] Id. at 22.
[62] Id. at 25. This risk-averse approach is partly due to the influence from other institutions, including Congress and the courts, which have often overruled the FDA for allowing a risky product onto the market, but rarely for failing to allow a safe product to enter the market. Richard A. Epstein, The Case for Field Preemption of State Laws in Drug Cases, 103 NW. U. L. REV. 463, 469-470 (2009).
[63] MAKOWER ET AL., supra note 47, at 7.
[64] Chips comprise thousands of probes for cDNAs which bind to sections on a DNA sample that are identical to the cDNA. This enables companies to determine easily whether the sample-holder’s genome contains the probe regions. cDNA, or complementary DNA, is DNA synthesized from an mRNA template (the blueprint for the protein product made from the DNA strand) in a reaction catalyzed by the enzyme reverse transcriptase and the enzyme DNA polymerase. Chromatin Immunoprecipitation Sequencing, ILLUMINA.COM, http://www.illumina .com/technology/chip_seq_assay.ilmn (last visited Nov. 7, 2011).
[65] § 210(h) of the Food, Drug and Cosmetic Act defines what falls under the “device” definition. 21 U.S.C. § 321(h). Since Illumina’s chip ostensibly fell under this definition, it was eligible for regulation by the FDA.
[66] Letter from Dr. Alberto Gutierrez , Office of In Vitro Diagnostic Device Evaluation and Safety, Center for Device and Radiological Health to Mr. Jay T. Flatley, President & CEO, Illumina, Inc. (June 10, 2010), available at http://www.fda.gov/downloads/MedicalDevices/Reso urcesforYou/Industry/UCM215242.pdf. Letters were also apparently sent to other chip manufacturers, according to the FDA. Mary Carmichael, DNA Dilemma: The Full Interview with the FDA on DTC Genetic Tests, NEWSWEEK, August 5, 2010, http://www.newsweek.com/blogs/ the-human-condition/2010/08/05/dna-dilemma-the-full-interview-with-the-fda-on-dtc-genetic-tests.print.html.
[67] FDA Letters to Industry (June 10, 2010), available at http://www.fda.gov/Medical Devices/ResourcesforYou/Industry/ucm111104.htm.
[68] See Letter from Dr. Alberto Gutierrez, Office of In Vitro Diagnostic Device Evaluation and Safety, Center for Device and Radiological Health to Ms. Anne Wojcicki, President and Co-Founder, 23andMe, Inc. (June 10, 2010), available at http://www.fda.gov/downloads/Medical Devices/ResourcesforYou/Industry/UCM215240.pdf; Letter from Dr. Alberto Gutierrez, Office of In Vitro Diagnostic Device Evaluation and Safety, Center for Device and Radiological Health to Mr. Earl M. Collier, Jr., deCODE Genetics (June 10, 2010), available at http://www.fda.gov/ downloads/MedicalDevices/ResourcesforYou/Industry/UCM215241.pdf.
[69] Id.
[70] Letter from Dr. Alberto Gutierrez, Office of In Vitro Diagnostic Device Evaluation and Safety, Center for Device and Radiological Health to Mr. Jorge Conde, Co-Founder & CEO, Knome, Inc. (June 10, 2010) (on file with author), available at http://www.fda.gov/downloads/MedicalDevices/ResourcesforYou/Industry/UCM215239.pdf.
[71] Id.
[72] Letters to Manufacturers Concerning Genetic Tests (July 19, 2010) (on file with author), available at http://www.fda.gov/MedicalDevices/ProductsandMedicalProcedures/InVitroDiagno stics/ucm219582.htm.
[73] Robert Temple, Policy developments in regulatory approval, 21 STATISTICS IN MEDICINE 2939, 2939–40 (2002).
[74] DAVID FRUM, HOW WE GOT HERE: THE 70S 180 (2000).
[75] Rebecca Eisenberg, Patents, Product Exclusivity, and Information Dissemination: How Law Directs Biopharmaceutical Research and Development, 72 FORDHAM L. REV. 477, 479–80 (2003).
[76] The Federal Circuit in Roche v. Bolar effectively eliminated the judge-made experimental use exemption as a protection for generic pharmaceutical manufacturers. 733 F.2d 858, 863 (Fed. Cir. 1984) (finding that the experimental use exception only covers use for amusement, idle curiosity, or strictly philosophical inquiry, but not for business purposes). The ruling in Roche was crucial because the previous year, the Supreme Court had held that generic drugs needed to provide data to the FDA for approval and could not rely on the data previously provided by the pioneer drug manufacturer. United States v. Generix Drug Corp., 460 U.S. 453, 460 (1983).
[77] Glaxo, Inc. v. Novopharm, Ltd., 110 F.3d 1562, 1568 (Fed. Cir. 1997).
[78]  Small Business Assistance: Frequently Asked Questions for New Drug Product Exclusivity, FDA.GOV, http://www.fda.gov/Drugs/DevelopmentApprovalProcess/SmallBusiness Assistance/ucm069962.htm (noting that a 505(b)(2) or 21 U.S.C. § 355(b)(2) application for new indications provides the basis for three additional years of data exclusivity).
[79] See 21 U.S.C. § 360j(h)(4).
[80] NOAH, supra note 35, at 871.
[81] See Victoria Pratt, Remarks at the Public Meeting on Oversight of Laboratory Developed Tests 17 (July 20, 2010) [hereinafter Meeting Day 2] (transcript available at http://www.fda.gov/ downloads/MedicalDevices/NewsEvents/WorkshopsConferences/UCM226204.pdf).
[83] Id. at 4–5, 8.
[84] Id. at 8.
[85] Id. Note that eye-color is actually governed by many genes (it is a polygenic trait); this example is not indicative of the actual complex genetics of eye-color. Although polymorphisms in the OCA2 gene account for 74% of variation in eye color, other genes such as HERC2 also play a role in eye color variations. See Duffy et al., A Three Single-Nucleotide Polymorphism Haplotype in Intron 1 of OCA2 Explains Most Human Eye-Color Variation, 80 AM. J. HUMAN GENETICS 241, 248 (2007).
[86] Jeff M. Hall et al., Linkage of Early Onset Familial Breast Cancer to Chromosome 17q21, 250 SCIENCE 1684, 1684 (1990).
[87] See generally Annegret Müller & Richard Fishel, Mismatch Repair and the Hereditary Non-polyposis Colorectal Cancer Syndrome (HNPCC), 20 CANCER INVESTIGATIONS 102 (2002).
[88] Id.
[89] SACGHS REPORT, supra note 35, at 56. As mentioned supra, analytical validity is the ability of a test to measure the characteristic that it was designed to measure, without drawing any particular conclusions from that characteristic.
[90] Pauline C. Ng et al., An agenda for personalized medicine, 461 NATURE 724, 724 (2009).
[91] Id.
[92] Angrist et al., supra note 23, at S112. Myriad Genetics, one of the defendants in the A.M.P. v. U.S.P.T.O. case alleging the invalidity of patents claiming human genes, has greater than 99% analytical validity, despite its current unregulated status. See Robert Cook-Deegan et al., Impact of gene patents and licensing practices on access to genetic testing for inherited susceptibility to cancer: Comparing breast and ovarian cancers with colon cancers. 12 GENETICS IN MEDICINE S15, S22 (2010); see also Telephone Interview with Alberto Gutierrez, Director of the Office of In Vitro Diagnostics, Food and Drug Administration and Katherine Serrano, Office of In Vitro Diagnostics, Food and Drug Administration (Jan. 13, 2011) [hereinafter Gutierrez Telephone Interview].
[93] Denise Gellene, Illumina Slashes Cost of Individual Genome Sequencing Service. XCONOMY (June 11, 2010), http://www.xconomy.com/san-diego/2010/06/09/illumina-slashes-cost-of-individual-genome-sequencing-service/ (last visited Nov. 29, 2011). However, the price of whole-genome sequencing is expected to rapidly decrease with improving technology, perhaps even to $1,000.  See Andrew Pollack, Taking DNA Sequencing to the Masses, N.Y. TIMES, Jan. 5, 2011, at B1, available athttp://www.nytimes.com/2011/01/05/health/05gene.html [hereinafter Pollack I].
[94] Personal Genome Service, 23ANDME, https://www.23andme/you/faqwin/sequencing/ (last visited Nov. 4, 2011).
[95] S.K. Cohn & L.T. Weaver, The Black Death and AIDS: CCR5-?32 in genetics and history, 99 Q.J. Med. 497, 499 (2006). Note that although Northern Europeans are likely to carry CCR5, the gene is not actually associated with blonde hair, as with this example. Id. at 498–99 (suggesting that Northern Europeans are likely to carry CCR5); see also S. Ito & K. Wakamatsu, Diversity of human hair pigmentation as studied by chemical analysis of eumelanin and pheomelanin, 25 J. European Acad. Dermatology & Venereology 1369, 1369.
[96] Humans are diploid; they have two copies of each gene except in the sex chromosomes. GRIFFITHS ET AL., supra note 83, at 3, 35; see also Gregor Mendel, Verhandlungen des naturforschenden Vereines in Brünn [Experiments in Plant Hybridization], ABHANDLUNGEN, 3, 12-13 (1865).
[97] They are not. The primary hair color gene, MC1R, is found on chromosome 16. Ira Gantz et al., Mapping of the Gene Encoding the Melanocortin-1 (a-Melanocyte Stimulating Hormone) Receptor (MC1R) to Human Chromosome 16q24.3 by Fluorescence in Situ Hybridization, 19 GENOMICS 394, 394 (1994). The primary eye color gene, OCA2 is found on chromosome 15. Carolina Rooryck, et al., High resolution mapping of OCA2 intragenic rearrangements and identification of a founder effect associated with deletion in Polish albino patients, 129 HUMAN GENETICS 199, 199 (2011).
[98] GRIFFITHS ET AL., supra note 83, at 32 (explaining the concept of dominance using Mendel’s experiments with peas).
[99] Id. at 119.
[100] Ng. et al., supra note 91, at 725.
[101] Han, supra note 2, at 429; Hogarth et al., supra note 20, at 167.
[103] GRIFFITHS ET AL., supra note 83, at 247.
[104] Hall et al., supra note 87, at 1684.
[105] GRIFFITHS ET AL., supra note 83, at 247.
[106] Cook-Deegan et al., supra note 93, at S26.
[107] Amy L. McGuire et al., Regulating Direct-to-Consumer Personal Genome Testing, 330 SCIENCE 181, 181 (2010).
[108] Gutierrez Telephone Interview, supra note 93.
[109] Esteban Gonzáles Burchard et al., The Importance of Race and Ethnic Background in Biomedical Research and Clinical Practice, 348 NEW ENG. J. MED. 1170, 1171 (2003).
[110] Ng et al., supra note 91, at 725.
[111] Burchard et al., supra note 110, at 1174–75.
[112] Letter from The International Schizophrenia Consortium, Common Polygenic Variation Contributes to Risk of Schizophrenia and Bipolar Disorder, 460 NATURE 748, 748 (2009).
[113] Id.
[114] Id.
[115] GRIFFITHS ET AL., supra note 83, at 242.
[116] Id.
[117] Compare Brendan Maher, The Pitfalls of Tracing Your Ancestry, NATURE NEWS (Nov. 13, 2008), http://www.nature.com/news/2008/081113/full/news.2008.1227.html (suggesting that individuals may be afraid of genetic tests telling them that they are actually of a different genetic background then they expected), with Cinnamon S. Bloss et al., Effect of Direct-to-Consumer Genomewide Profiling to Assess Disease Risk, 364 NEW ENG. J. MED., 524, 524 (2011) (finding that 90.3% of individuals were not upset by the results of their genetic test).
[118] See generally  35 U.S.C. §§ 1-376. Patentable Subject matter is addressed in § 101, novelty in § 102, non-obviousness in § 103, and the enablement and written description requirements in § 112.
[119] Id. at § 271.
[120] Diamond v. Chakrabarty, 447 U.S. 303, 305 (1980). As a result, anyone else using these bacteria—a living thing—would infringe Chakrabarty’s patent.
[121] Id. at 309-10.
[122] Parke-Davis & Co. v. H.K. Mulford Co., 189 F. 95, 98 (S.D.N.Y. 1911).
[123] Ass’n for Molecular Pathology v. USPTO, 702 F.Supp. 2d 181, 185 (S.D.N.Y. 2010).
[124] Lab. Corp. v. Metabolite Labs, 548 U.S. 124, 125 (2006) (Breyer, J., dissenting from dismissal of certiorari as improvidently granted).
[125] Id.
[126] Id. at 132.
[127] Gene Quinn, Bilski Tea Leaves: Remembering the Lab Corp Non-Decision. IP WATCHDOG (Jan. 18, 2010), available at http://ipwatchdog.com/2010/01/18/bilski-tea-leaves-remembering-the-lab-corp-non-decision/id=8479/.
[128] In re Bilski, 545 F.3d 943, 961 (Fed. Cir. 2008) (en banc), aff’d in part sub nomBilski v. Kappos, 130 S.Ct. 3218 (2010).
[129] Bilski, 545 F.3d at 949–950.
[130] Id. at 961, 963 (discussing the constitutional basis for the machine-or-transformation test and applying the test to the facts of the Bilski patent).
[131] Id.
[132] Prometheus Labs., Inc. v. Mayo Collaborative Servs., 581 F.3d 1336, 1350 (Fed. Cir. 2009), vacated, 130 S.Ct. 3543 (2010).
[133] Prometheus Labs., Inc. v. Mayo Collaborative Servs., 628 F.3d 1347, 1349–50 (Fed. Cir. 2010), cert. granted, 131 S.Ct. 3027 (June 20, 2011) (No. 10-1150).
[134] Id. at 1350.
[135] Id.
[136] Prometheus Labs., Inc. v. Mayo Collaborative Servs., 581 F.3d at 1350, cert. granted, 131 S.Ct. 3027 (June 20, 2011) (No. 10-1150).
[137] Id. at 1341.
[138] Bilski v. Kappos, 130 S.Ct. 3218, 3221 (2010).
[139] Id. at 3227.
[140] William Simmons, Bilski Blundering Biotech, 27 NATURE BIOTECH. 245, 247 (2009).
[141] Prometheus Labs., Inc. v. Mayo Collaborative Servs., 628 F.3d 1347, 1349 (Fed. Cir. 2010).
[142] Id. at 1353 (quoting Bilski v. Kappos, 130 S.Ct. at 3225 (quoting Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980) (quoting 5 Writings of Thomas Jefferson 75–76 (H. Washington ed. 1871)))).
[143] Prometheus Labs., 628 F.3d at 1354.
[144] Id. A parallel case not discussed here is Classen Immunotherapies, Inc. v. Biogen IDEC, Nos. 2006-1634, 2006-1649, 2011 WL 3835409, (Fed. Cir. Aug. 31, 2011) (holding that claims of patents directed towards a method of lowering the risk of chronic immune-mediated disorder, including the physical step of immunization in accordance with a lower risk schedule was patent-eligible, while the abstract principle of varying immunization schedules having consequences on certain diseases was not). Nonetheless, I believe that it fits within my general framework of courts creating subject-specific patent eligibility decisions that make it difficult for genetic diagnostic test manufacturers to predict patent eligibility ex ante.
[145] Ass’n for Molecular Pathology v. USPTO, 702 F.Supp. 2d 181 (S.D.N.Y. 2010), rev’d in part, aff’d in part, 653 F.3d 1329 (Fed. Cir. 2011).
[146] Id. at 185.
[147] BRCA1 and BRCA2 account for the majority of inherited breast cancers in the United States. H.T. Lynch et al., Hereditary breast cancer: Part I. Diagnosing Hereditary Breast Cancer Syndromes. 14BREAST J. 3 (2008).
[148] Gutierrez Telephone Interview, supra note 93.
[149] Ass’n for Molecular Pathology v. USPTO, 702 F.Supp. 2d at 207.
[150] Id. at 238.
[151] Id. at 222.
[152] Brief for the United States as Amicus Curiae in Support of Neither Party, Ass’n for Molecular Pathology v. USPTO, No. 2010-1406, slip op. (Fed. Cir. Oct. 29, 2010).
[153] Introns are portions of the gene that are not transcribed to form mRNA, which eventually creates proteins—effectively excess DNA, although scientists predict that these portions have some unknown utility. See GRIFFITHS ET AL., supra note 83, at 6–7, 465. They are also subject to variance and modification by related genes.
[154] Brief for the United States, supra note 142, at 14–17.
[155] Id. at 23–24.
[156] Id. at 31.
[157] Ass’n for Molecular Pathology v. USPTO, 653 F.3d 1329, 1334 (Fed. Cir. 2011). The plaintiff’s attorneys have stated that they will petition for certiorari, although earlier petitions for rehearing at the Federal Circuit were denied. Turna Ray, ACLU, PUBPAT Seek to Challenge Patentability of Isolated Genes Before Supreme Court, PHARMACOGENOMICS REPORTER, October 12, 2011.
[158] U.S. CONST. art. I, § 8, cl. 8.
[159] Bilski v. Kappos, 130 S.Ct. 3218, 3227 (2010).
[160] U.S. CONST. art. I, § 8.
[161] Most notably, see the seminal Science magazine article, which has been cited 1,449 times as of this writing. Michael A. Heller & Rebecca S. Eisenberg, Can Patents Deter Innovation: The Anticommons in Biomedical Research, 280 SCIENCE 698 (1998).
[162] Mildred K. Cho et al., Effects of Patents and Licenses on the Provision of Clinical Genetic Testing Services, 5 J. MOLECULAR DIAGNOSTICS 3, 3 (2003).
[163] Kyle Jensen & Fiona Murray, Intellectual Property Landscape of the Human Genome, 310 SCIENCE 239, 239 (2005).
[164] SACGHS REPORT, supra note 35, at 20. An important aside to this story is that university research is not protected by the very narrow research exception to patent infringement. Madey v. Duke University, 307 F.3d 1351, 1362 (Fed. Cir. 2002) (allowing the research exemption only when the infringement was done for “amusement, to satisfy idle curiosity, or for strictly philosophical inquiry” and finding that the university’s business interest in research precluded such protection).
[165] Indeed, the BIO survey cited by Myriad states that the majority of companies generally in-licensed (licensed from universities) projects that are in the pre-clinical stage of development and thus require substantial investment and commercialization risk. 77% of the respondents indicated that they intended to spend 5–15 years and over $100 million in developing a commercial product, which may dwarf the spending by the federal government through research grants. Ass’n for Molecular Pathology v. USPTO, 702 F.Supp. 2d 181, 210-11 (S.D.N.Y. 2010).
[166] SACGHS REPORT, supra note 35, at 22-23.
[167] Isabelle Huys et al., Legal Uncertainty in the Area of Genetic Diagnostic Testing, 27 NATURE BIOTECH. 903, 903–05 (2009).
[168] Id. at 906.
[169] Id. at 907.
[170] Heller & Eisenberg, supra note 161.
[171] Huys et al., supra note 167, at 905.
[172] Id. at 908.
[173] Id. at 909.
[174] SACGHS Report, supra note 35, at 7.
[175] Cook-Deegan et al., supra note 93, at S15.
[176] Id. at S27–S28.
[177] Id. at S28.
[178] Id.
[179] Id.
[180] Id.
[181] Id. at S29.
[182] Katie Skeehan et al., Impact of gene patents and licensing practices on access to genetic testing for Alzheimer disease, 12 GENETICS IN MEDICINE S71, S71 (2010).
[183] Id. This risk factor also has a reasonably small effect on Alzheimer’s onset.
[184] Id.
[185] Id. at S74.
[186] Id.
[187] Skeehan et al., supra note 182, at S77. Graceful Earth received one of fourteen letters from the FDA concerning regulation of its tests on July 19, 2010. Letter from Dr. Alberto Gutierrez, Office of In VitroDiagnostic Device Evaluation and Safety, Center for Device and Radiological Health to Mr. Kenneth W. Friedenberg, Owner, Graceful Earth, Inc. (July 19, 2010), available at http://www.fda.gov/downloads/MedicalDevices/ProductsandMedicalProcedu res/InVitroDiagnostics/UCM219585.pdf.
[188] William E. Ridgway, Note, Realizing Two-Tiered Innovation through Drug Regulation, 58 STAN. L. REV. 1221, 1224 (2005–06). Note however, that Ridgway’s system is actually the opposite of the one suggested here—in this model, the FDA exclusivity will provide the baseline tier of protection, with the patent system providing an enhanced level, rather than the reverse.
[189] SACGHS REPORT, supra note 35, at 20. There is some question as to whether this lower level of exclusivity also has potential ill-effects on innovation, but this needs to be further explored. See Heidi Williams,Intellectual Property Rights and Innovation: Evidence from the Human Genome (Nat’l Bureau of Econ. Research Working Paper No. 16213, 2010).
[190] Id. at 43.
[191] Turna Ray, Draft Bill Proposes FDA Create New Division to Review “Advanced Personalized Diagnostics”, PHARMACOGENOMICS REPORTER (June 23, 2010), available at http://www.genomeweb.com/dxpgx/draft-bill-proposes-fda-create-new-division-review-advanced-personalized-diagnos?page=show (discussing a draft bill by Representative Orrin Hatch (R-UT) entitled “Better Evaluation and Treatment Through Essential Regulatory Reform for Patient Care Act,” which would create a new division to review diagnostics. No date for the introduction of the bill has been set yet).
[192] Meeting Day 1supra note 21, at 71 (statement of Elizabeth Mansfield, Director of Personalized Medicine, Office of In Vitro Diagnostic Device Evaluation and Safety).
[193] Bloss et al., supra note 118, at 7.
[194] Id. at 6–7, 10.
[195] Gutierrez Telephone Interview, supra note 93.
[196] Bloss et al., supra note 118, at 10.
[197] Id. at 8–9.
[198] For example, the data obtained by the International HapMap project, which seeks to develop a haplotype map (HapMap) of the human genome that will describe the common patterns of human genetic variation, necessarily depends on the study participants. See Groups Participating in the International HapMap Project, http://hapmap.ncbi.nlm.nih.gov/groups.html (last visited Oct. 18, 2011).
[199] 21 C.F.R. § 314.50 (d)(5)(v) (2009).
[200] See Maher, supra note 118 (discussing the limitations of genetic ancestry testing and recommendations on the delivery of test results).
[201] See Richard A. Epstein, How Conflict-of-Interest Rules Endanger Medical Progress and Cures, Manhattan Institute, Project FDA Report No. 3 (2010) (alleging that conflict-of-interest provisions from the FDA hurt medical progress by preventing the agency from having the best scientists. Because both the FDA and the pharmaceutical companies look for the best talent, stringent conflict-of-interest protocols may actually weed out the best actors).
[202] Gutierrez Telephone Interview, supra note 93.
[203] See, e.g., Mark Schena et al., Quantitative Monitoring of Gene Expression Patterns with a Complementary DNA Microarray, 270 SCIENCE 467, 467 (1995) (detailing the use of cDNA in microarrays to measure the quantitative expression of numerous genes at one time).
[204] Carmichael, supra note 67; Gutierrez Telephone Interview, supra note 93.
[205] Eisenberg, supra note 76, at 480.
[206] See generally Cook-Deegan et al., supra note 93.
[207] Gutierrez Telephone Interview, supra note 93.
[208] Alexander T. Tabarrok, The Blessed Monopolies, 24 REGULATION 10, 10-12 (2001), available at http://www.cato.org/pubs/regulation/regv24n4/v24n4-1.pdf.
[209] Id.
[210] MAKOWER ET AL., supra note 47, at 11.
[211] Id.
[212] See Abigail Alliance v. Von Eschenbach, 445 F.3d 470 (D.C. Cir. 2006) (finding that a terminally-ill patient has a constitutional right to access potentially life-saving, post-Phase I drugs).
[214] MedWatch Voluntary Reporting Form 3500https://www.accessdata.fda.gov/scripts/med watch/medwatch-online.htm (last visited Oct. 18, 2011).
[215] This itself is a marked improvement over the 1% reporting statistic found by the GAO in a 1986 study. NOAH, supra note 42, at 281.
[216] Angrist et al., supra note 23, at S111.
[217] Meeting Day 1supra note 21, at 29 (statement of Courtney Harper, Division Director for FDA Division of Chemistry and Toxicology Devices).
[218] Pollack I, supra note 94. Although, newspapers are often eager to report that this technology is ready before its time. See, e.g., Andrew Pollack, When Gene Sequencing Becomes a Fact of Life, N.Y. TIMES, Jan. 17, 2001, at C1, available at http://www.nytimes.com/2001/01/ 17/business/17AIDS.html (discussing the advance in H.I.V. resistance tests through the use of genome sequencing).
[219] Promethease is a tool that builds a report using SNPedia (which uses data taken from published studies) and a file of genotypes of the kind calculated by 23andMe and Navigenics. Promethease, http://www.snpedia.com/index.php/Promethease (last visited Oct. 18, 2011).
[220] Alla Katnelson, The renegade gene test, NATURE NEWS (Oct. 14, 2010), http://www.nature.com/news/2010/101014/full/news.2010.540.html.
[221] 21 U.S.C. § 360(k).
[222] Steven L. Salzberg & Mihaela Pertea, Do-it-yourself genetic testing, 11 GENOME BIOLOGY 1, 2 (2010).

[223] 35 U.S.C. § 271(b)–(c) (2006) (outlining the requirements for actionable induced infringement, including the requirement that the underlying direct infringement be successful).

Ideas and the Public Domain: Revisiting INS v. AP in the Internet Age

Ideas and the Public Domain: Revisiting INS v. AP in the Internet Age
By Andrew Beckerman-Rodau* A pdf version of this article may be downloaded here.  


The integration of the Internet into all aspects of society has led to the quick and widespread distribution of information in digital form.  This digital information can be easily, quickly and inexpensively aggregated by third parties, who can then redistribute it.[1]  Such information aggregators can free ride on the work of others.  For example, to obtain current news anyone with an Internet connection can go directly to Google News,[2] which collects links to news stories from a significant number of news outlets. Specialized aggregators provide on-line locations for news related to specific subject matter.[3]  Additionally, numerous blogs collect news stories created by others.[4]  Twitter accounts[5] are also used to collect and distribute news stories created by a variety of sources.  These accounts can be used to redistribute or retweet[6] the same story via multiple feeds.[7]  Newspapers, wire services and other news creators and providers have voiced concern that such free riding allows news aggregators to benefit from the work of enterprises that create news media without having to pay any of the costs to obtain such news stories.[8]  It has been asserted that such free riding is both unfair and illegal. Moreover, it has been argued that it can economically injure or destroy such enterprises.[9] Interestingly, such concern by entities that collect and provide news was raised in the distant past long before the Internet existed.  In the 1918 Supreme Court decision International News Service v. Associated Press[10] a news organization complained that a competitor was free riding on its efforts to obtain news stories.  This allowed the competitor to gain the benefit of using news stories without having to incur the substantial costs to obtain such stories.[11]  The Supreme Court upheld a lower court preliminary injunction prohibiting the competitor from free riding[12] because it believed a consequence of such activity could be ruinous competition that would destroy the incentive for any enterprise to expend the resources to gather news.[13]  The underlying basis for the Court’s decision was a federal common law action for misappropriation.[14] A subsequent Supreme Court decision negated federal common law, which effectively eliminated International News Service as a binding precedent.[15]  Nevertheless, some states adopted the misappropriation doctrine from International News Service under state unfair competition law.[16]  This misappropriation doctrine has been asserted with limited success in state courts[17] and has appeared in some recent federal district court decisions applying state law.[18]  Although federal courts of appeals have reversed these recent district court decisions, they have found the cause of action to be potentially viable, even though unsuccessful in the cases before the court.[19]  Additionally, despite the fact that some courts have relied on preemption under copyright law to greatly reduce the scope of a misappropriation action, it has continued to survive.[20]  Arguably, this is because the International New Service case raises some timeless and difficult issues.  Namely, how to define property, whether free riding is permissible, and whether ruinous competition is legally actionable. This Article will critically examine the International News Service decision and subsequent judicial decisions relying on the misappropriation doctrine.  It will argue that the decision has been misinterpreted and misunderstood.  Contrary to popular understanding, the Court in International News Service did not find that conventional property rights existed in news.  The actionable wrongful conduct in the case was based on one party competing in a legally unfair manner.[21]  The finding that the conduct was legally unfair and subject to injunctive relief was based on two questionable rationales.   First, the Court seemed disturbed that one party was free riding on the labor and investment of another party.[22]  Second, the Court was concerned that the free riding could cause ruinous competition that might result in no enterprise having the necessary economic incentive to enter the news gathering business.[23]  The difficulty with these rationales is that free riding and ruinous competition are typically acceptable marketplace conduct in a free enterprise economic system.  The encouragement of innovative and creative conduct and the resulting societal benefits require allowing free riding at least with regard to using mere ideas and information.  Only when the free riding amounts to utilizing a concrete embodiment of the idea or information that qualifies for protection under intellectual property law does such free riding become actionable infringement.  Although this may not always be fair, it is represents the dominant utilitarian view of property[24] as opposed to a labor theory.[25] Under this utilitarian view a balance must be struck between extending rights in intellectual property in order to incentivize innovative and creative conduct, and limiting such rights to avoid impinging on marketplace competition. Ruinous competition is likewise an unfortunate but necessary Darwinian aspect of marketplace competition.   Societal changes and development of new technology frequently destroy the economic viability of previously successful business enterprises.[26] Attempting to limit such ruinous consequences of competition is problematic because it will typically protect the status quo at the expense of delaying the inevitable introduction of new ideas and technology into the marketplace.  In light of this, any misappropriation action based simply on free riding or a potential to cause ruinous competition should be rejected as inconsistent with both existing property law and a competition-based economic system.  Existing actions based on various tort doctrines provide adequate legal recourse when competitive conduct enters the realm of deception or misrepresentation, or improperly interferes with or restrains competition.[27]  Finally, contract law allows parties to voluntarily agree to protect ideas or information without affecting the rights of anyone not a party to the contract.  Hence, elimination of the misappropriation doctrine leaves sufficient legal protection in place for idea and information creators to receive legal protection without overly interfering with the marketplace.

I. Property Rights in Intangibles

The concept of possession and control permeates property law.[28]  Property rights are established and/or identified via demonstrating possession of the thing sought to be treated as property.[29]  This makes it difficult to apply traditional property law concepts to ideas, which are elusive things whose source can be difficult to ascertain.  Moreover, ideas are difficult to define and hence difficult to control.[30]  Attaching a property label to ideas is therefore in conflict with the concept of possession.  Additionally, from a policy perspective it may be preferable for ideas to be treated as part of the public domain rather than allowing a person or entity to own an idea. Judicial decisions examining property rights in ideas have considered the above policies and considerations.  The California Supreme Court stated:
Generally speaking, ideas are as free as the air and as speech and the senses . . . .  An idea is usually not regarded as property, because all sentient beings may conceive and evolve ideas throughout the gamut of their powers of cerebration and because our concept of property implies something which may be owned and possessed to the exclusion of all other persons.[31]
Likewise, Justice Brandeis opined:
An essential element of individual property is the legal right to exclude others from enjoying it.  If the property is private, the right of exclusion may be absolute; if the property is affected with a public interest, the right of exclusion is qualified.  But the fact that a product of the mind has cost its producer money and labor, and has a value for which others are willing to pay, is not sufficient to ensure to it this legal attribute of property.  The general rule of law is, that the noblest of human productions—knowledge, truths ascertained, conceptions, and ideas—become, after voluntary communication to others, free as the air to common use.[32]
Nevertheless, ideas can often have significant value and hence create disputes.  Assume Able proposes an idea to Company X about how to save money.  Company X rejects the idea but Able subsequently discovers that Company X is using the idea.  Does Able have a claim for compensation?[33]  Assume Betty shares an idea with a television producer for a new reality show that involves a competition between fashion designers.  The producer subsequently creates a reality show involving competing fashion designers, but the various details of the show are dissimilar to Betty’s proposed show.  Does Betty have a claim against the producer?[34] Despite the value of many ideas, a threshold issue is whether the law should attach a property label to mere ideas.  The determination of whether this label should attach is significant because once something is designated property, a bundle of legally enforceable rights attach to it.[35]  The determination would be easy if it was based on a labor theory.[36]  However, U.S. law has typically relied on a utilitarian theory for designating property rights.[37]  This theory is based on a policy determination of whether and when the property label should be attached to something.[38]  Under federal intellectual property law, both statutory law and judicial decisions have attempted to draw a line between what is and what is not granted property status.  In the area of trademark law property rights related to a novel and creative trademark only arise when a trademark is actually used in commerce to identify particular goods.[39]  Copyright law bestows property rights on the expression of an idea but not on the underlying idea itself.[40]  Likewise, patent law does not grant property status to mere ideas.[41]  Patentable inventions must be useful in the sense that they represent an application of an idea that solves a problem or accomplishes some functional objective.[42]  The determination of precisely where to draw the line between intellectual property that is within the domain of federal patent and copyright law, and intellectual property that is outside of that domain is not always easy to ascertain.[43]  Nevertheless, it is clear that mere ideas alone are outside the scope of federal intellectual property protection and therefore, at least under federal intellectual property law, mere ideas are not entitled to be labeled as property. State common law, in contrast to federal intellectual property law, has provided protection for ideas even though such ideas were outside the domain of patent and copyright protection.[44]  Typically, such results reflect notions of equity and fairness and are based on either contract law or unfair competition law.[45]  In an idea submission case, the Supreme Court of Alaska stated:
The law pertaining to the protection of ideas must reconcile the public’s interest in access to new ideas with the perceived injustice of permitting some to exploit commercially the ideas of others. . . .  Creating a middle ground between no protection and the legal monopolies created by patent and copyright law, courts have protected ideas under a variety of contract and contract-like theories.  These theories protect individuals who spend their time and energy developing ideas that may benefit others.  It would be inequitable to prevent these individuals from obtaining legally enforceable compensation from those who voluntarily choose to benefit from the services of the “idea-person.”[46]
Some courts have recognized a cause of action for the use of ideas under a contract[47] or a property theory[48] only if the idea is both novel[49] and concrete.[50]  Other courts have recognized a cause of action under contract theory without requiring the idea to be novel and concrete.[51]  Finally, a common law cause of action for idea misappropriation has been recognized as both a property[52] action and a tort action.[53]

II. Common Law Misappropriation of an Idea or Information

A.  The Historical Source of the Misappropriation Doctrine

The 1918 Supreme Court decision in International News Service v.  Associated Press[54] is generally considered to be the source of the misappropriation action.[55]  The meaning of the case however has engendered confusion and disagreement to this day.[56]  On its most basic level the dispute involved two news services—International News Service and Associated Press—who competed in gathering and distributing news to newspapers.[57]  The trial court preliminarily enjoined International News Service from using Associated Press news obtained via bribery and via inducing breach of agreements between the Associated Press and its member newspapers.[58]  However, the trial court refused to preliminarily enjoin International News Service from using Associated Press news obtained from bulletins released to the public and from published newspapers containing Associated Press news items.[59]  The Court of Appeals upheld the lower court’s injunction but remanded with directions to the district court to issue an injunction barring International News Service from using Associated Press news until it ceased to have commercial value as news.[60]  The Supreme Court solely addressed the question of whether International News Service engaged in actionable conduct by taking Associated Press news from publicly available sources and using it as its own news.[61]  The Court noted that neither copyright nor conventional property law protected the news at issue.[62]  Nevertheless, the Court affirmed the preliminary injunction on the basis of International News Service’s conduct, which sounded in tort.[63] Consistent with the Court’s view that news is not granted property status, the opinion labeled the news at issue as “quasi” property, which it defined as creating rights only between International News Service and Associated Press, as opposed to the public in general.[64]  Such a definition unequivocally shows that the news at issue in the case was not viewed as property by the Court.[65] The use of the phrase “quasi property” was therefore used as a shorthand reference to indicate conventional property rights were not at issue in the case.[66]  The real issue in the case was International News Service’s marketplace conduct.  Specifically, whether International News Service was competing fairly or unfairly with Associated Press.[67]  The finding of unfair competition appears to be based on two rationales.  First, International News Service engaged in free riding: Associated Press spent substantial resources acquiring the news and International News Service appropriated and sold that news as its own without incurring the substantial costs to obtain it.[68]  Second, denying a cause of action would result in ruinous competition because it would become unprofitable for anyone to engage in the newsgathering and distribution business.[69]  This concern has continued to exist.  A recent case applying New York common law held that an element of a common law misappropriation action included a finding that “the ability of other parties to free-ride on the efforts of the plaintiff would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened.” [70]

B.  An Overview of Contemporary Application of the Misappropriation Doctrine

Misappropriation is often asserted in law suits alleging that a plaintiff’s intangible property was taken by a third party without providing payment or obtaining permission.[71] For example, the long running dispute between the Winklevoss brothers and Mark Zuckerberg is largely based on the assertion that Mr. Zuckerberg stole the brothers’ idea for Facebook.com.[72]  Misappropriation is also typically referred to in judicial decisions and scholarly writing with regard to disputes over ideas or information.  However, the prima facie elements of misappropriation are often not clearly delineated.[73]  Sometimes it is used to refer to the business tort of passing off.[74]  It may also be used as a synonym for unfair competition[75] or to refer to breach of an implied contractual relationship involving disclosure of an idea or information.  Finally, it may represent a request for equitable relief when no specific cause of action is applicable.[76] In Sellers v. ABC,[77] the Court noted that a common law action existed for “misappropriation of an idea or theory if (1) the idea is novel; (2) the idea is in a concrete form; and (3) the defendant makes use of the idea.”[78]  In Mercury Records Products v. Economic Consultants,[79] the Court stated that “[t]he elements of the misappropriation cause of action . . . are: (1) time, labor, and money expended in the creation of the thing misappropriated; (2) competition; and (3) commercial damage to the plaintiff.”[80]  The Court in Jaggon v. Rebel Rock Entertainment, Inc.[81] held that an action for misappropriation of an idea requires showing that (1) the idea was novel; (2) the idea was disclosed to the defendant in confidence; and (3) the defendant adopted and used the idea.  Finally, in NBA v.  Motorola,[82] the Court held that a plaintiff could bring an action for misappropriation of time-sensitive information if: (1) the plaintiff incurs costs or expenses in generating or collecting the information; (2) the information has time-sensitive value; (3) defendant’s use of the information amounts to free riding on the plaintiff’s efforts to obtain the information; (4) the parties are in direct competition with regard to a particular product or service; and (5) the defendant’s free riding on plaintiff’s efforts would threaten the future production of the product or service by substantially reducing the incentive to engage in the business activity.[83] Despite judicial recognition that common law misappropriation actions exist to protect ideas and information,[84] such actions are generally unsuccessful.[85]  Additionally, although the comments in the Restatement (third) of Unfair Competition suggest that the ongoing viability of a misappropriation action is questionable in light of its general lack of success and preemption by federal copyright law,[86] misappropriation actions continue to be brought by plaintiffs and have succeeded in a limited number of cases.[87]

C.  Continued Viability of Actions for Misappropriation of an Idea or Information

The misappropriation doctrine was recently asserted in Barclays Capital v. TheFlyonthewall.com,[88] which involved a modern scenario analogous to the facts in International News Service.  In Barclays Capital, the defendant, an online subscription news service operating under the name TheFlyonthewall.com, aggregated and distributed a variety of information to financial investors via the Internet.[89]  The information at issue was contained in equity research reports disseminated by plaintiffs, who are major financial institutions.[90]  The plaintiffs widely disseminated electronic copies of these reports.[91]  However, the plaintiffs engaged in substantial efforts to restrict access to the reports to select clients and licensees.[92]  Additionally, the plaintiffs relied on modern technological measures to curtail unauthorized dissemination of the reports.[93]  Despite such efforts, authorized parties released the reports, which were then redistributed by unauthorized third parties such as the defendant.[94] Defendant news service provided both copies of portions of the plaintiffs’ equity research reports[95] and information extracted from those research reports in the form of recommendations contained in the reports.[96]  The district court found that the defendant engaged in copyright infringement by copying portions of the reports[97] and issued a permanent injunction against similar future conduct.[98]  However, the information extracted from the reports by the defendant in the form of recommendations was outside the domain of copyright protection, which typically does not protect ideas, facts or mere information.  Nevertheless, the district court determined that the recommendations in the reports required the plaintiffs to expend substantial resources to produce them[99] and that the recommendations were very time sensitive.[100]  The district court also determined that the plaintiffs and the defendant were in direct competition with regard to distribution of investment information.[101]  Finally, the district court found that the defendant’s free riding[102] would likely threaten the plaintiffs’ ability to engage in their business activities.[103]  In light of this, the district court held that the defendant had engaged in misappropriation of information.[104]  The district court then enjoined the defendant from using the information for a limited time period in order to allow the plaintiffs to obtain an economic return on their investment in generating the information.[105] Although on appeal the Second Circuit reversed the lower court’s conclusion that defendant was liable for misappropriation under state common law,[106] the Court appeared reluctant to totally eliminate the misappropriation doctrine.  Although it narrowed the scope of the doctrine by holding that it was preempted by federal copyright law under the facts in this case,[107] the Court opined that the doctrine still existed and could apply under the appropriate facts.[108]  This result is consistent with other judicial decisions that have generally concluded that some form of a state misappropriation action survives preemption[109] in light of the legislative history of the Copyright Act.[110] One of the few cases where the misappropriation action was successfully utilized under state law is the Board of Trade v.  Dow Jones.[111]  This case involved the Chicago Board of Trade, an exchange for trading commodity futures contracts.[112]  The Board sought government approval to trade stock index futures contracts[113] based on the Dow Jones stock index,[114] which is a widely available numerical average of thirty industrial stocks that represented the stock market as a whole.[115]  The Board did not plan to use the Dow Jones name on the contracts.  Additionally, the information used to compute the index was public knowledge disseminated by Dow Jones.[116] However, Dow Jones objected to having their index associated with a stock index futures contract because they believed it could damage their image or reputation.[117]  The Board brought a declaratory judgment action seeking permission to sell the contract based on the Dow Jones index.[118]  The trial court determined that Dow Jones had a property right in its index but that the Board could use the index for its futures contract provided that each contract included a disclaimer indicating that Dow Jones was neither associated with nor sponsored the contracts.[119]  The Illinois Supreme Court,[120] reversing the trial court, held that the sale of stock index futures contracts based on the Dow Jones index would be a misappropriation of Dow Jones intangible assets under Illinois common law.  The Court reached this conclusion despite the lack of competition between the parties,[121] the public dissemination of virtually all information about the index by Dow Jones, and the fact that the Board would not use the Dow Jones name on any contracts.  Additionally, in contrast to Barclays Capital, the Court did not discuss copyright preemption.  Ultimately, the Court’s decision gave Dow Jones a property right in publicly disseminated information.[122]

III. Critical Review of the Misappropriation Doctrine

As previously discussed, although some federal judicial decisions have concluded that copyright law has preempted broad application of the state common law misappropriation doctrine, courts have generally concluded that some narrow cause of action survives[123] in light of the legislative history of the Copyright Act.[124]  Although such judicial findings of preemption have significantly minimized successful assertion of the misappropriation doctrine in some jurisdictions, the doctrine should be eliminated for more fundamental reasons.  Putting aside the preemption issue, [125] a misappropriation action based on International News Service is inconsistent with the fundamental concepts underlying property law.[126]  Moreover, classic justifications for the doctrine, which include preventing free riding and ruinous competition, are simply inappropriate.  Such justifications are contrary to the legal goal of promoting marketplace competition[127] and an impediment to rapid integration of technology and other changes into society.

A.  The Problem with the Property Rationale

The International News Service decision emphasizes that it is the competitive conduct of one of the parties—International News Service in that case—that is the source of liability.  Additionally, as discussed above, the Court did not find that International News Service took property belonging to the Associated Press.[128]  In light of this, the decision in International News Service is difficult to rationalize.  The Court in that case made it clear that no one has property rights in news that is freely available to the public. The Court then proceeded to enjoin International News Service from using such publicly available news, which anyone should be free to use.  The result is that International New Services’ otherwise legal conduct was treated as unlawful.[129]  This inconsistency may be the source of the decision being viewed, incorrectly, as finding a property right in the news and for creating a misappropriation doctrine based on unfairly using the property of a third party.[130] It is generally accepted that property rights do not arise in factual information, abstract ideas or newsworthy events.[131]  This is a policy-based determination premised, at least in part, on avoiding interference with the free flow of information that is necessary for a democratic society to flourish.[132]  Hence, applying the misappropriation doctrine to a news aggregator, for example, which merely collects and utilizes publicly available information should not by itself be actionable.[133]  The non-property status of publicly available facts and information makes them free for anyone to use without identifying their source.  Holding someone liable for using such information is an extreme example of bootstrapping; refusal to apply a legal property designation to something in the public domain means it is free for anyone to use.  It should not be actionable conduct to misappropriate or use something that is free for anyone to use, and failure to provide attribution of the source of such public information should be irrelevant because the source or creator of the information is not permitted to assert property rights in the information. Property rights in general are never absolute.[134]  Such rights are typically granted based on a utilitarian theory[135]—rather than a labor theory[136]—which balances competing interests.  Although assigning property rights to the result of productive activity is generally desirable because it facilitates a marketplace economy by providing economic incentives to engage in such activity, important countervailing concerns militate against granting such rights for pure information.  First, control of information and ideas is abhorrent to a free society.[137]  And thus, despite substantial efforts to generate, collect, control or disseminate information and ideas, the granting of any property rights in such information should be outweighed by the potential for such rights to negatively impact a free society.[138]  This concept is strongly embedded in intellectual property law.[139]  In the seminal case of Feist Publications v. Rural Telephone, Justice O’Connor stated:
The primary objective of copyright is not to reward the labor of authors, but “[t]o promote the Progress of Science and useful Arts.”  To this end, copyright assures authors the right to their original expression, but encourages others to build freely upon the ideas and information conveyed by a work.  This principle, known as the idea/expression or fact/expression dichotomy, applies to all works of authorship.  As applied to a factual compilation, assuming the absence of original written expression, only the compiler’s selection and arrangement may be protected; the raw facts may be copied at will.  This result is neither unfair nor unfortunate.  It is the means by which copyright advances the progress of science and art.[140]
Moreover, the Supreme Court has held that abstract ideas and discoveries of new, naturally occurring minerals or plants and laws of nature, no matter how useful and important, are not eligible for patent law protection.[141] Second, allowing property rights to attach to information and ideas placed in the public domain is contrary to the basic concept of common law property rights.  Property rights typically require the owner to maintain control over property by demonstrating possession.[142]  Failure to maintain such control can result in the loss of property rights via operation of law.[143]  Placing ideas or information into the public domain clearly amounts to surrendering virtually all control over such ideas and information.  Hence, it would be inconsistent with the fundamental concept of property law to allow someone to claim property rights in something he or she voluntarily relinquishes all control over.  It is for these reasons, among others, that statutory bodies of intellectual property law specifically allow[144]—and in some circumstances require[145]—the release of certain information into the public domain without the resultant loss of all property rights in the information.  Such legislative enactments reflect careful balances of the competing interests and are subject to legislative revision in light of changes in society and technology.  Therefore, creating such rights in intangibles should be left to the legislative branch, rather than by the courts pursuant to common law property rights.[146]

B.  Free Riding

Preventing a commercial enterprise from free riding on the investment of time and money made by a competitor is a rationale asserted by International News Service[147] and some subsequent cases analyzing the misappropriation doctrine.[148]  Legally prohibiting free riding is facially appealing because it comports with notions of fairness. However, by itself, it is generally an illegitimate legal rationale for rendering commercial conduct illegal.  An economic system based on free competition will always have a certain degree of free riding.  A company that introduces a new, successful product will inevitably engender competitors.  For example, assume that I am the first person to successfully sell bottled water, and that others understandably begin selling water as well.  In response, I might open my retail store 24 hours a day to increase sales.  If my strategy is shown to work, it is likely some competitors will adopt the same approach.[149]  Similarly, if I sell a new product which turns out to have significant market penetration, it is likely that competing companies will develop and sell similar products once it is shown a lucrative market for that class of products exists.  If I introduce a new style or design of clothing that is successful others will copy and market similar designs.[150]  Generic and lower priced versions of products frequently compete in the marketplace with well-known or established brands.[151]  If I open a restaurant adjacent to a newly opened luxury mall I may free ride on the increase in consumer traffic generated by the mall.  Typically, all of these activities, without more, are considered legitimate competition.[152] Developing a new business method or introducing a new product is neither easy nor inexpensive to accomplish.  Consequently, it can be significantly less costly to create and sell products once someone else has determined a market exists or via marketing/advertising has created a new market.[153] Such free riding is simply an aspect of competition that is often desirable for a variety of reasons.  Allowing a first market entrant to block any of the above free riding by competitors may tend to preserve the status quo in the marketplace.  This can have the undesirable effect of stifling innovation and creativity.  Competition leads to competitors attempting to gain market share by utilizing efficiencies to lower production costs, by providing better customer service than competitors and by creating strong consumer-recognized brands.[154]  It also encourages competitors to improve existing products in order to capture a larger market share and perhaps charge a premium price for at least a limited time period.[155]  Moreover, maintaining the status quo can interfere with the integration of technology into the marketplace.  In contrast, free riding forces market participants to embrace new technology in order to maintain an edge on competitors in the quest to provide better products and services while minimizing costs.

C.  Ruinous Competition

The avoidance of ruinous competition, another rationale asserted in International News Service,[156] would seem to be an admirable goal; however, it is inconsistent with normal economic development and integration of technology into society.  It is an unfortunate fact of business that many enterprises will fail due to marketplace competition.[157] Attempting to insulate a business from such market forces via an action for misappropriation asserted against a competitor interferes with the natural evolution of enterprises in the marketplace. Additionally, concerns about ruinous competition are often based on erroneous beliefs or reflect an underestimation of the ability of enterprises to adapt to changes.  For example, in International News Service the Court appeared to believe that allowing a news service to free ride on the news gathering activities of a competitor would result in no enterprise engaging in such activities.[158]  The Court asserted that it would be too costly to compete and make a profit in light of free riding by competitors.[159]  This is not a new argument.  In Ghen v. Rich[160] the Court opted to adopt the prevailing custom in the whaling industry.  The custom provided that harpooning a whale made it your property even if the whale became submerged and floated away.[161]  If someone found the whale washed up on a remote beach the finder did not acquire ownership of the whale.  The Court feared that failure to adopt this custom as the common law would have a significant negative effect on the local economy.[162]  The ruinous competition argument has also been asserted today in response to news aggregators who rely on the Internet to engage in a modern version of what occurred in International News Service.[163] Such aggregators can easily and quickly access news stories on-line, extract the relevant news and then redistribute it for minimal cost.  Newspapers and other news entities that expend substantial money and effort initially collecting the news argue that they are unable to operate profitably due to such free riding by aggregators.[164]  Even if such an argument is true, typically all existing business enterprises are subject to marketplace changes due to technology advances and numerous other factors.  Businesses must either develop new business strategies to survive or they will be replaced by new enterprises.  Such new strategies may include utilizing technology to counteract the consequences of free riding by competitors, providing new value-added services[165] or abandoning an existing business model.[166] Frequently, assertions that the activities of competitors, or others, will ruin a business enterprise reflect an attempt to maintain the status quo in the face of significant market disruptions.  It is such disruptions, often the result of advancing technology, that are the real cause of the economic destruction of a business because the status quo may no longer represent a viable business model.  This is exemplified by the music industry, whose existing business model has been economically devastated by the advent of technology that enables almost anyone to inexpensively copy and widely distribute music in digital form.[167]  Conventional print media, such as newspapers, have also been heavily impacted by the migration of news and other information to the Internet.[168]  Likewise, wide adoption of smart phones means more consumers are accessing and reading news in digital form on a smart phone or other device in lieu of print media.[169] Nevertheless, business enterprises of some type will continue to make both music and news media available.  How such enterprises are structured and what revenue sources they will rely on will undoubtedly change in unexpected ways.[170] Consequently, justifying a misappropriation action based on a property rationale or the prevention of free riding or ruinous competition is problematic.  Such an action will merely interfere with and delay the inevitable marketplace changes that result from changes in society and introduction of rapidly changing technology.

IV. Reliance on Existing Tort and Contract Theories

Despite the positive aspects of free competition, some limits must exist to create an orderly marketplace.  Elimination of a misappropriation action does not leave competitors powerless.  Certain types of activities that restrain trade may run afoul of antitrust law.[171]  Moreover, a property theory—via an infringement action—can be relied on to bar interference with unauthorized use of intellectual assets that are designated property.  These would include assets protected via patent law,[172] copyright law,[173] trade secrets law[174] and trademark law.[175]  Other statutory and common law actions focus on marketplace conduct that is generally deemed objectionable.  Such actions, which come under the generic umbrella of unfair competition,[176] are ultimately based on an underlying tort theory and include a constellation of actions such as injuring consumers or competitors via passing off,[177] deception, misrepresentation or false advertising.[178]  All of these actions reflect an underlying policy of societal disapproval of misleading or deceptive marketplace conduct, or a breach of trust among parties.  Finally, parties should be free to enter private contractual agreements as deemed necessary provided they do not restrain trade via collusion or unreasonably interfere with competition.  Nevertheless, reliance on contract-based theories to protect information and ideas has received inconsistent and confusing judicial treatment.[179] Judicial decisions deciding idea protection cases under contract law theories can generally be divided into two broad categories.  One group of decisions adopts a freedom of contract rationale.  This reflects a belief that the contracting parties are in the best position to determine whether to enter the agreement,[180] and that courts should not second-guess the informed decisions made by the agreeing parties.  The second group of decisions relies on a property rationale.  This reflects a belief that a contractual agreement that purports to sell or transfer an interest in something not legally recognized as property is essentially lacking in consideration.[181]  And therefore, the agreement should not be enforceable under conventional contract law principles.[182] In Tate v. Scanlan International, Inc.,[183] an operating room nurse thought up a simple medical device that could be used to minimize breakage of a particular type of suture material used in surgery.[184]  She disclosed her idea on a confidential basis to a company that designed and sold surgical supplies upon the mutual understanding that she would be compensated if the company utilized her idea.[185]  The idea was eventually profitably marketed and sold but a dispute arose as to the amount of payment owed to the nurse.  The trial court jury awarded the nurse substantial damages based on a contract theory.[186]  On appeal the Court upheld the damage award based on a breach of contract. However, the Court held that an idea could only be the subject of a contract, or other legal protection, if it was both novel and concrete.[187]  The novel requirement is satisfied if the idea originates with the idea creator and is not generally known to the public.[188]  The concrete requirement is met if the idea is sufficiently complete so that it can be used without the need for significant development before it can be implemented.[189]  Requiring novelty and concreteness amounts to a rejection of the a freedom of contract rationale in favor of a reliance on reliance on an underlying property.[190]  This arguably makes sense under a property theory because property rights can be asserted against the public generally.[191]  Hence, a vague undeveloped idea that is generally known to members of the public cannot be an individual’s property.  However, contract actions only affect the rights of the contracting parties who have voluntarily entered into a binding legal relationship.[192]  The rights of anyone not a party to the contract are unaffected.  Injecting a property rationale into such relationships is therefore inconsistent with the underlying freedom of contract rationale that is strongly embedded in contract theory. A trend exists in modern idea-submission cases for courts to minimize reliance on an underlying property theory in favor of a freedom of contract theory.  In Nadel v. Play-By-Play,[193] an independent toy designer developed a concept for a plush monkey that made noise and spun around when placed on a flat surface.[194]  The designer asserted that he disclosed a prototype of the toy to the defendant toy company pursuant to industry custom that required the defendant to pay him for the concept if it was used by the toy company.[195]  The defendant rejected the design but subsequently came out with a toy based on the concept.[196]  In reversing the trial court’s dismissal of the action the Court held that a different standard of novelty applied to a property-based action and a contract-based action.[197]  A property action requires the conventional novelty standard: the idea is not known to the public.[198]  However, under a contract theory, the novelty standard only requires that the idea was novel to the defendant at the time of contracting without regard to whether it was generally known to the public or to competitors.[199]  This approach, followed by some courts,[200] reflects a freedom of contract rationale that recognizes that a party should be free to contract to buy an idea based on its determination of value.  Additionally, it recognizes that enterprises involved in a business or industry are typically best situated to determine the value of an idea and to reach appropriate contract terms.  Nevertheless, the Nadel court allowed for a limit on the freedom of contract with regard to ideas.  It preserved the right of a court to find an idea so lacking in novelty that it can be assumed it is not novel to the buyer and therefore insufficient as a matter of law to support a contract claim.[201]  Although I think it is unlikely that a court would apply this limit, it allows a court the ability to find a contract for an idea unenforceable in egregious situations where enforcing the contract would be inequitable and unfair.  This can be analogized to the doctrine of unconscionability in contract law, which serves a similar purpose for contracts generally.[202] An alternate view of contracts for the purchase of ideas or information is to consider them service contracts.[203]  This approach eliminates the focus on whether the idea or information sought to be sold or conveyed is absolutely novel, novel to the buyer or concrete.  It also lets business entities decide what and how they want to contract for something.  For example, an enterprise could agree to pay for the service of providing an idea or information without regard to whether it is novel or concrete.[204]  Or, the parties could contractually require that the idea or information that is the subject matter of the contract must be novel or concrete.[205] Even though reliance on a service contract rationale typically eliminates factual findings related to concreteness or novelty, significant hurdles still exist for a contractual theory to prevail.  It must still be shown that the parties mutually agreed to enter a contract for the transfer of an idea or information.[206] If a written contract is at issue, normal contract interpretation rules can be utilized.  Of course, such disputes do not commonly involve written contracts and therefore parties frequently assert an implied-in-fact contract theory.[207] Nevertheless, any contractual theory including an implied-in-fact theory[208] requires establishing that the parties intended to enter into an enforceable agreement.[209] Industry custom can be a decisive factor, such as in the Nadel decision,[210] when asserting an implied-in-fact contract theory.  However, this is not unique to contracts for ideas or information.  Industry custom is applicable, when relevant, to understanding and interpreting contracts generally.[211]


The International News Service decision, despite being overruled by a subsequent Supreme Court decision[212] and narrowed in scope by the preemptive effect of copyright law,[213] has continued to survive as a state-based misappropriation action.[214] This is a consequence of the decision being both misunderstood and misapplied.  Any common law cause of action for misappropriating an idea or information based on a property rationale should not prevail.  Nor should preventing free riding or ruinous competition provide a rationale for such actions.  Courts should unequivocally repudiate the misappropriation doctrine in an effort to provide clarity in the law.[215] This clarity is important in the current climate, where ideas are increasingly more valuable[216] and new technological innovations continually emerge.  Instead, any common law action to protect ideas or information should only succeed, if at all, under existing contract and tort causes of action.
* Professor of Law & Co-Director, Intellectual Property Law Concentration, Suffolk University Law School, Boston, Massachusetts. B.S. (Engineering), 1976, Hofstra University; J.D., 1981, Western New England University School of Law; L.L.M., 1986, Temple University School of Law. Email: arodau@suffolk.edu; website: http://lawprofessor.org. Copyright © 2011, Andrew Beckerman-Rodau. Special thanks to Sara O’Coin & Jason Edmunds for research assistance.
[1] See generally Recording Indus. Ass’n of Am. v. Diamond Multimedia Sys., 180 F.3d 1072, 1073-74 (9th Cir. 1999) (noting ease with which digital music can be distributed via Internet); Cynthia Counts & Amanda Martin, Libel in Cyberspace: A Framework for Addressing Liability and Jurisdictional Issues in This New Frontier, 59 Alb. L. Rev. 1083, 1086-87 (1996) (Internet allows anyone to easily and inexpensively distribute information worldwide).
[2] See http://news.google.com/ (last visited June 23, 2011).  See also Barclays Capital Inc. v. TheFlyonthewall.com, Inc., 650 F.3d 876 (2d Cir. 2011) (dispute involving company that aggregates and disseminates financial news and information of interest to investors via the Internet).
[3] See, e.g., Gigalaw.com Daily News, http://gigalaw.com/ (last visited Aug. 1, 2011) (provides Internet and technology law news clips compiled by attorney Doug Isenberg).
[4] See, e.g., Legal News, http://www.lawprofessor.org/legalresources/legalnews.html (last visited June 22, 2011) (list of links to various intellectual property related blogs).
[5] Twitter is an online social networking site available at http://twitter.com/ (last visited June 22, 2011).
[6] See PC Magazine Encyclopedia for definition of “retweet,” available at http://www.pcmag.com/encyclopedia_term/0%2C2542%2Ct%3Dretweet&i%3D60366%2C00.asp (last visited June 22, 2011).
[7] See, e.g., the author’s Twitter account—SuffolkIPLaw—which retweets news stories related to IP law and is available at http://twitter.com/#!/SuffolkIPLaw (last visited June 23, 2011).
[8] See, e.g., Dan Frosch, Enforcing Copyrights Online for a Profit, N.Y. Times, May 3, 2011, at B1, available at http://www.nytimes.com/2011/05/03/business/media/03righthaven.html?pagewanted=all.
[9] See, e.g., John C. Abell, AP To Aggregators: We Will Sue You, Wired, Apr. 6, 2011, http://www.wired.com/epicenter/2009/04/ap-to-aggregato/.  See also Barclays Capital, 650 F.3d at 880-81, 887-88 (financial services firms argued defendants free riding on recommendations contained in its research reports could severely limit its ability to continue to fund such research activities); Associated Press v. All Headline News Corp., 608 F. Supp. 2d 454, 457-58 (S.D.N.Y. 2009) (news gathering organization alleged it had lost customers to a competing news organization that engaged in free riding by using news it gathered).
[10] 248 U.S. 215 (1918). See generally L. Gordon Crovitz, Hot News: Technology Trumps Law – Rapid innovation challenges long-established legal doctrines as well as business models, Wall St. J., June 27, 2011, available at http://online.wsj.com/article/SB1000142405270230456 9504576405672792064908.html (background information about case).
[11] International News Service, 248 U.S. at 238-40.
[12] Id. at 245-46.
[13] Id. at 240-41.
[14] Nat’l Basketball Ass’n v. Motorola, Inc., 105 F.3d 841, 845 (2d Cir. 1997); Barclays Capital Inc. v. TheFlyonthewall.com, Inc., 700 F. Supp. 2d 310, 331 (S.D.N.Y. 2010), rev’d on other grounds, 650 F.3d 876 (2d Cir. 2011).
[15] 700 F. Supp. 2d 310 at 332.  See also Barclays Capital, 650 F.3d at 894; Associated Press, 608 F. Supp. 2d at 459.
[16] 700 F. Supp. 2d at 332.  See also Barclays Capital, 650 F.3d at 895, 898-99; Associated Press 608 F. Supp. 2d at 459.
[17] See, e.g., Bd. of Trade of the City of Chicago v. Dow Jones & Co., 456 N.E.2d 84 (Ill. 1983).  See also Associated Press 608 F. Supp. 2d at 458-61 (in response to motion to dismiss, court found misappropriation action valid cause of action under N.Y. law).
[18] See, e.g., Barclays Capital, 700 F. Supp. 2d at 310 (narrow state misappropriation claim, not applicable to facts of this case, survives preemption by federal copyright law); Nat’l Basketball Ass’n v. Sports Team Analysis & Tracking Sys., 939 F. Supp. 1071 (S.D.N.Y. 1996), rev’d in part & aff’d in part sub nom, Nat’l Basketball Ass’n v. Motorola, Inc., 105 F.3d 841 (2d Cir. 1997) (misappropriation claim was a valid cause of action but not satisfied under facts of this case).
[19] Barclays Capital, 650 F.3d at 878; Motorola, Inc., 105 F.3d at 843.
[20] See infra notes 108-10 and accompanying text.
[21] See infra note 63 and accompanying text.
[22] See infra note 68 and accompanying text.
[23] See infra note 69 and accompanying text.
[24] See infra note 37 and accompanying text.
[25] See infra note 36 and accompanying text.
[26] See infra note 158 and accompanying text.
[27] See, e.g., infra notes 172 & 179 and accompanying text.
[28] See generally Carol M. Rose, Possession as the Origin of Property, 52 U. Chi. L. Rev. 73 (1985) (possession is origin of property under common law); Joseph Singer, Property §, at 17-18 (3d ed. 2010) (discussing the important role of possession in determining ownership of property).  Herbert Hovenkamp & Sheldon Kurtz, The Law of Property § 1.2, at 2 (5th ed.  2001) (first possession of a wild animal creates ownership rights in the animal).  Id. § 1.3, at 2 (a finder of lost property acquires rights to the property against all but the true owner).  Id. §§ 4.2-4.3, at 54-56 (under the doctrine of adverse possession the possession of property under certain circumstances may lead to ownership of property which extinguishes the original owner’s rights by operation of law).
[29] See Mitchell v. Georgia & A. Ry. Co., 36 S.E. 971, 972 Ga. 1900) (“Possession is presumptive evidence of title.”).  See also Hovenkamp & Kurtz, supra note 28, at § 1.1, at 1.
[30] See generally Paul Goldstein, Copyright, Patent, Trademark and Related State Doctrines 18-19 (rev. 5th ed. 2004) (discussing how the intangible nature of information and ideas makes application of conventional property theory difficult).
[31] Desny v. Wilder, 299 P.2d 257, 265 (Cal. 1956) (the law generally does not grant authors property rights in ideas).
[32] International News Service, 248 U.S. at 250 (Brandeis, J., dissenting).
[33] Such claims are typically referred to as idea submission claims.  Joseph Siprut, Are Ideas Really Free as the Air? Recent Developments in the Law of Ideas, 51 Idea 111, 112 (2011).
[34] See Rodriguez v. Heidi Klum Co., 2008 U.S. Dist. LEXIS 80805, *6 (S.D.N.Y. Sept. 30, 2008) (plaintiffs, who developed an idea for a reality television show called American Runway which involved a competition among fashion designers, sued defendants who subsequently created the highly successful reality show Project Runway, which also involved competing fashion designers); id. at *14 (dismissing copyright claim and holding that the shows were not substantially similar); id. at *22-24. (finding state law misappropriation claim preempted by federal copyright law).  See also Siprut, supra note 33, at 120-124 (discussing disputes involving other television shows).
[35] See Moore v. Regents of the Univ.  of Cal., 793 P.2d 497, 509 (Cal. 1990) (Mosk, J., dissenting) (bundle of rights include right to possession, right to use, right to transfer and right to exclude others from property).
[36] See William Stoebuck & Dale Whitman, The Law of Property §1.1, at 2 (3rd ed. 2000) (“[Under] labor theory . . . a person has a moral right to the ownership and control of things produced or acquired through his or her labor.”); Stephanie Gore, “Eureka! But I filed too late. . .”: The Harm/Benefit Dichotomy of a First-to-File Patent System, 1993 U. Chi. L. Sch. Roundtable 293, 299 (“[L]abor theory stems from the argument that people are entitled to hold, as property, whatever they produce by their own initiative, intelligence, and industry.”).
[37] See Jesse Dukeminier, et al., Property 50 (7th ed. 2010) (utilitarian theory is the dominant legal theory of property today); Abraham Bell & Gideon Parchomovsky, A Theory of Property, 90 Cornell L. Rev. 531, 542 (2005) (most scholars rely on utilitarian property theory).  See also International News Service, 248 U.S. at 76) (Brandeis, J., dissenting) (“[T]he fact that a product of the mind has cost its producer money and labor, and has a value for which others are willing to pay, is not sufficient to ensure to it this legal attribute of property.”).
[38] See generally Stoebuck & Whitman, supra note 36, at §1.1, at 2 (legal protection of private property promotes “the maximum fulfillment of human needs and aspirations”).
[39] Blue Bell, Inc. v. Farah Manufacturing Co., Inc., 508 F.2d 1260, 1265 (5th Cir.  1975) (common law property rights do not arise upon conception of a trademark; a trademark must be used in commerce to identify specific goods for property rights to arise).   See also 15 U.S.C. § 1051(a)(1) (an owner of a trademark can seek federal registration of the trademark only after it is used in commerce); id. § 1051(b) (federal law allows applications for federal registration to be filed before a trademark is used but such registration is not complete until the mark is actually used in commerce).
[40] See Mazer v. Stein, 347 U.S. 201, 217 (1954) (copyright protects expression of idea rather than idea itself); Whelan Assocs., Inc. v. Jaslow Dental Lab., Inc., 797 F.2d 1222, 1234 (3d Cir. 1986) (“It is axiomatic that copyright does not protect ideas, but only expressions of ideas.”); Herbert Rosenthal Jewelry Corp. v. Kalpakian, 446 F.2d 738, 741 (9th Cir. 1971) (copyright protects the form of expression of an idea, but not the idea itself); Melk v. Pennsylvania Medical Society, 99 U.S.P.Q. 2d 1624, 1625 (E.D. PA., 2011).  See also Roger Schechter & John Thomas, Intellectual Property – The Law of Copyrights, Patents and Trademarks § 3.3, at 31-36 (2003); 17 U.S.C. § 102(b).
[41] Jennings v. Brenner, 255 F. Supp. 410, 412 (D.D.C. 1966) (“[P]atent law does not permit patents on ideas but only on embodiments of ideas.”).
[42] Rubber-Tip Pencil Co. v. Howard, 87 U.S. 498, 507 (1874) (“An idea of itself is not patentable, but a new device by which it may be made practically useful is.”).  It is usually stated that patents protect embodiments of ideas but not mere ideas.  See Jennings 255 F. Supp. at 412.  See generally Diamond v. Diehr, 450 U.S.  175, 185 (1981) (an idea is not patentable); Diamond v.  Chakrabarty, 447 U.S. 303, 309 (1980) (“The laws of nature, physical phenomena, and abstract ideas have been held not patentable.”); In re Fisher, 421 F.3d 1365, 1371 (Fed. Cir. 2005) (basic scientific discovery useful only for engaging in further research not eligible for patent protection).  Although all of these cases refer to utility patents, a design patent, likewise, does not protect mere ideas.  A design patent applies to the non-functional ornamental appearance of a product as illustrated by drawings of the product contained in the design patent.  See generally 35 U.S.C. § 171 (statutory requirements for a design patent).  See also U.S.  Patent & Trademark Office Website at http://www.uspto.gov/patents/resources/types/designapp.jsp#def (last visited Aug. 1, 2011) (the definition of a design capable of being protected by a design patent).
[43] Judge Learned Hand, in Peter Pan Fabrics, Inc. v. Martin Weiner Corp., 274 F.2d 487, 489 (2d Cir. 1960), noted the difficulty of drawing the line between the idea and the expression of the idea in copyright law.  See also Robert A. McFarlane & Robert G.  Litts, Business Methods and Patentable Subject matter Following In Re Bilski: Is “Anything Under the Sun Made by Man” Really Patentable?, 26 Santa Clara Comp. & High Tech. L.J. 35, 36 (2010) (noting that courts have struggled for decades with regard to deciding which inventions are eligible for patent protection).
[44] Reeves v. Alyeska Pipeline Serv. Co., 926 P.2d 1130, 1135 (Alaska 1996).
[45] Id.
[46] Id. (internal citations omitted).
[47] Tate v. Scanlan Int’l, Inc. 403 N.W.2d 666, 671 (Minn. Ct. App. 1987) (only novel and concrete ideas can be protected via express or implied contract).
[48] See, e.g., Sellers v. Am. Broad. Co., 668 F.2d 1207, 1210 (11th Cir. 1982) (to succeed in an action for misappropriation of an idea, the idea must be both novel and concrete).
[49] Tate, 403 N.W.2d at 671 (“A novel idea is an original idea, something that is not already known or in use.”).
[50] Id. at 672 (“Concreteness of an idea pertains to the requisite developmental stage of an idea when it is presented.  An idea is a protectable property interest, if it is sufficiently developed to be ready for immediate use without additional embellishment.  If an idea requires extensive investigation, research, and planning before it is ripe for implementation, it is not concrete.”) (internal citations omitted).
[51] See, e.g., Reeves 926 P.2d at 1141-42 (noting some courts require novel idea for contract claim but other courts do not require idea to be novel for contract claim).  See also Nadel v. Play-By-Play Toys & Novelties, Inc., 208 F.3d 368, 375-76 (2nd Cir. 2000) (an idea must be novel to be protected in a misappropriation action but a contract action can apply even if an idea is not novel).
[52] See, e.g., Nadel, 208 F.3d at 378 (misappropriation under New York law is a property action).
[53] See, e.g., Barclays Capital, 700 F. Supp. 2d at 335 (misappropriation under New York law is tort action).
[54] 248 U.S. 215 (1918).
[55] Barclays Capital, 700 F.Supp. 2d at 331.  See also Motorola, Inc., 105 F.3d at 845; Chicago Board of Trade, 456 N.E.2d at 88; Mercury Record Productions, Inc. v. Econ.  Consultants, Inc., 218 N.W. 2d 705, 709 (Wis. 1974).
[56] See, e.g., Richard A. Epstein, The Protection of “Hot News”: Putting Balganesh’s “Enduring Myth” about International News Service v.  Associated Press in Perspective, 111 Colum. L. Rev. Sidebar79 (2011) (generally favorable view of Supreme Court decision); Gary Myers, The Restatement’s Rejection of the Misappropriation Tort: A Victory for the Public Domain, 47 S.C. L. Rev. 673 (1996) (arguing for elimination of misappropriation action relied on by Supreme Court).  See also Shyamkrishna Balganesh, “Hot News”: The Enduring Myth of Property in News, 111 Colum. L. Rev. 419 (2011); Edmund J. Sease, Misappropriation is Seventy-Five Years Old; Should We Bury it or Revive it?, 70 N.D. L. Rev. 781 (1994); Douglas G. Baird, Common Law Intellectual Property and the Legacy of International News Service v. Associated Press, 50 U. Chi. L. Rev. 411 (1983).
[57] 248 U.S. at 230.
[58] Id. at 231.
[59] Id.
[60] Id. at 232.
[61] Id.
[62] Id. at 234-37.
[63] Id. at 240.
[64] Id. at 236.
[65] See Thomas Merrill, Accession and Original Ownership, 1 J. Legal Analysis 459, 476 (2009) (property rights provide rights against everyone).
[66] The term “quasi”, like the term “constructive”, is used to indicate something is being presumed, even though not true, in order to allow a particular legal remedy.  See Halkin v.  Hume, 206 N.Y.S. 702, 702-04 (N.Y. Mun. Ct.1924).  See also Black’s Law Dictionary 1257 (7th ed. 1999) (definition of quasi); Id. at 309 (definition of constructive).
[67] 248 U.S. at 234-35.
[68] Id. at 239-40.
[69] Id. at 240-41.
[70] Motorola, Inc., 105 F.3d at 852.
[71] See, e.g., infra note 208.
[72] See generally Facebook, Inc. v. ConnectU LLC, 2007 U.S. Dist. LEXIS 91420 at *3 (D. CA. 2007) (“[T]he initial dispute .  .  .  arose from ConnectU’s claim that Mark Zuckerberg, Facebook’s founder, originally agreed to assist ConnectU’s founders [the Winklevoss brothers and Divya Narendra] in developing their website and business, but that he instead misappropriated their intellectual property to establish Facebook.”).  See also ConnectU v. Zuckerberg, 522 F.3d 82, 86 (1st Cir. 2008) (ConnectU founders alleged Mark Zuckerberg stole their idea, business plan and unfinished computer code).  The case was ultimately settled, with Facebook paying cash and Facebook stock worth a total of $65 million.  Jonathan Stemple, Winklevoss twins end appeal of Facebook settlement, Reuters, June 23, 2011, http://www.reuters.com/article/2011/06/23/us-facebook-winklevoss-idUSTRE75L7NS20110623.
[73] Sease, supra note 56, at 781 (“The [misappropriation] doctrine is so elusive that lower courts have had difficulty in even stating its elements.”).  See generally Lisa Pearson, Navigating the Bramble Bush in Idea Submission Cases, 4 J. Marshall Rev. Intell.  Prop. L. 36, 36-37 (2004) (noting state law protection for ideas is often unclear and inconsistent).
[74] Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 27 n. 1 (2003) (“Passing off (or palming off, as it is some called) occurs when a producer misrepresents his own goods or services as someone else’s.”)
[75] Fairway Constructors, Inc. v. Ahern, 970 P.2d 954, 956 (Ariz. Ct. App. 1998) (unfair competition “encompasses several tort theories, such as trademark infringement, false advertising, ‘palming off,’ and misappropriation”).  See also Indus. Indem. Co. v. Apple Computer, 79 Cal. App. 4th 817, 831 (1999) (unfair competition includes passing off and trademark infringement).  But see A-Mark Financial Corp. v. CIGNA Property & Casualty Comp., 34 Cal. App. 4th 1179, 1188 (1995) (unfair competition usually refers to passing off).
[76] See, e.g., International News Service, 248 U.S. at 215; Board of Trade of Chicago v.  Dow Jones & Co., Inc., 439 N.E.2d 526 (Ill. App. Ct. 1982), aff’d 456 N.E.2d 84 (Ill. 1983).   See also Pierce O’Donnell & William Lockard, You Have No Idea, 23 Los Angeles Lawyer 32, 34 (2000) (courts use idea protection law on a result-oriented basis to achieve justice).
[77] Sellers, 668 F.2d at 1210.
[78] Id. at 1210.
[79] 218 N.W.2d 705 (Wis. 1974).
[80] Id  at 709.
[81] 2010 U.S. Dist. LEXIS 90685, at *7 (S.D. Fl. Aug. 31, 2010).
[82] 105 F.3d 841 (2d Cir. 1997).
[83] Id. at 852.
[84] Associated Press, 608 F. Supp. 2d at 459; see also Confold Pacific, Inc. v. Polaris Indus., Inc., 433 F.3d 952, 960 (7th Cir.  2006) (noting misappropriation claim probably still exists under Minnesota law);Jaggon v.  Rebel Rock Entertainment, Inc., 09-61144, 2010 U.S.  Dist.  LEXIS 90685, at *7 (S.D. Fl.  2010) (action for misappropriation of idea recognized under Florida law when idea novel, idea disclosed in confidence and idea used adopted/used by defendant); Vent v. Mars Snackfood US, LLC, 350 F. App’x. 533, 534 (2d Cir. 2009) (action for misappropriation of idea recognized under New Jersey law when idea novel, idea disclosed in confidence and idea used adopted/used by defendant); Riordan v. H.J. Heinz Co., No. 08-1122, 2009 U.S. Dist. LEXIS 70713, at *14-15 (W.D. Pa. Dec. 8, 2009) (Pennsylvania law recognizes tort action for misappropriation of an idea when idea is novel, concrete and misappropriated by third party); Kleck v. Bausch & Lomb, Inc., 145 F. Supp. 2d 819, 826 (W.D. Tex. 2000) (action for misappropriation of intellectual property can brought under Texas law for taking an idea if the idea is novel, disclosed in confidence to defendant and idea adopted/used by defendant).
[85] See generally Restatement (Third) of Unfair Competition § 38, cmt. c (1995).
[86] Id.  But see Confold Pacific, 433 F.3d at 960. (International News Service type of misappropriation claim not preempted); Jaggon, 2010 U.S.  LEXIS 90685, at *7-8 (misappropriation of idea claim not preempted by federal copyright law).
[87] Interestingly it is enough of a concern that some commercial general liability policies include coverage for “misappropriation of advertising ideas or style of doing business.”  Alea London Ltd. v. American HomeServs., Inc., 638 F.3d 768, 771 (11th Cir.  2011).
[88] 700 F.Supp. 2d 310 (S.D.N.Y.  2010).  See generally Crovitz, supra note 10 (discussion of International News Service case and TheFlyonthewall.com case).
[89] Barclays Capital, 700 F.Supp. 2d at 313.
[90] Id. at 315-16.
[91] Id. at 317-19.
[92] Id. at 319-22.
[93] Id. at 320.
[94] Id. at 321.
[95] Id. at 328.
[96] Id. at 331.
[97] Id. at 328.
[98] Id. at 331.
[99] Id. at 335.
[100] Id. at 335-36.
[101] Id. at 339-42.
[102] Id. at 336-39.
[103] Id. at 341-43.
[104] Id. at 343.
[105] Id. at 347 (district court denied a motion to stay the injunction pending an appeal).
[106] Id. at 349.
[107] Id. 
[108] Id. at 355-356.  See also Motorola, Inc., 105 F.3d 841, 850 (2d Cir. 1997) (“crucial question [in case], therefore, is the breadth of the ‘hot-news’ [misappropriation] claim that survives preemption.”).
[109] See, e.g., Agora Financial, LLC v. Samler, 725 F. Supp. 2d 491, 496, 501 (D. Md. 2010) (misappropriation action equivalent to action in International News Service case not preempted by copyright); Jaggon, 2010 U.S.  Dist.  LEXIS 90685, at *7-9 (copyright law does not preempt misappropriation action under Florida law); Associated Press, 608 F. Supp. 2d at 461 (misappropriation action under New York law not preempted by copyright law).   See also Montz. v. Pilgrim Films & Television, Inc., No. 08-56954, 2011 U.S. App. LEXIS 9099, at *11-17 (9th Cir. Dec. 16, 2010) (copyright, under California law, does not preempt an implied contract action for taking an idea).
[110] See H.R. Rep. No. 94-1476 (1976) at 132, reprinted in 1976 U.S.C.C.A.N. at 5748 (“’[m]isappropriation’ is not necessarily synonymous with copyright infringement, and thus a cause of action labeled as ‘misappropriation’ is not preempted if it is in fact based neither on a right within the general scope of copyright . . . nor on a right equivalent thereto.  For example, state law should have the flexibility to afford a remedy (under traditional principles of equity) against a consistent pattern of unauthorized appropriation by a competitor of the facts (i.e., not the literary expression) constituting ‘hot’ news, whether in the traditional mold ofInternational News Service . . .  or in the newer form of data updates from scientific, business, or financial data bases.”), quoted in 105 F.3d 841, 850 (2d Cir.  1997).
[111] 439 N.E.2d at 526.
[112] 439 N.E.2d at 528; Chicago Board of Trade, 456 N.E.2d at 85 (“A futures contract is a contract traded on a commodities exchange which binds the parties to a particular transaction at a specified future date.”).
[113] Chicago Board of Trade, 456 N.E.2d at 84 (“A stock index futures contract is a futures contract based upon the value of a particular stock market index.”).
[114] 439 N.E.2d at 529.
[115] Id. at 528-29.
[116] Id. at 529.
[117] Id.
[118] Id. at 530.
[119] Id.
[120] Chicago Board of Trade, 456 N.E.2d at 84.
[121] Id. at 90.
[122] Id. at 93 (Simon, J., dissenting) (“Dow Jones has no more than an inchoate interest in the Board of Trade’s use of its index, but the majority’s opinion converts that interest into a property right.”).
[123] Id. at 84-85.  See also supra note 109 and accompanying text.
[124] See supra note 110.
[125] A detailed discussion of the preemptive effect of the Copyright Act under 17 U.S.C. § 301 (2006) is beyond the scope of this Article.  For a discussion of the preemption issue, see Agora Financial, 725 F. Supp. 2d at 494-502; see also Montz, 2011 U.S. App. LEXIS 9099, at *10-17 (discussion of preemption); Jaggon, 2010 U.S. Dist. LEXIS 90685, at *7-9 (overview of preemption).
[126] Although I am an advocate of strong property rights for both tangible and intangible property, such rights must be balanced against competing policies.  See Andrew Beckerman-Rodau, Are Ideas Within the Traditional Definition of Property: A Jurisprudential Analysis, 47 Ark. L. Rev. 603 (1994); see also Andrew Beckerman-Rodau, Patents are Property: A Fundamental but Important Concept, 4 J. Bus. & Tech. L. 87 (2009).
[127] See International News Service, 248 U.S. at 257-59 (Brandeis, J., dissenting).  See also Motorola, Inc., 105 F.3d 841, 845 (2d Cir. 1997) (free riding by competitor is element of misappropriation action).
[128] International News Service, 248 U.S. at 234-35 (decision turns on business conduct of parties not on property right in news).
[129] See generally id. at 258 (Brandeis, J., dissenting) (“[T]aking and gainful use of a product of another which, for reasons of public policy, the law has refused to endow with the attributes of property, does not become unlawful because the product happens to have been taken from a rival and is used in competition with him.”).
[130] See generally Balganesh,supra note 56, at 422-26 (arguing misappropriation doctrine has been incorrectly used to argue for property rights in news).
[131] See generally International News Service, 248 U.S. at 250 (Brandeis, J., dissenting) (“The general rule of law is, that the noblest of human productions – knowledge, truths ascertained, conceptions, and ideas – become after voluntary communication to others, free as the air to common use.”).
[132] See generally United States v. Carrier, 672 F.2d 300, 305 (2d Cir. 1983) (holding free dissemination of ideas essential element of democracy).
[133] Of course, if the aggregator copies, for example, news stories verbatim that violates copyright law because the form of expression is being copied.  Copyright law protects the form of expression even though it does not protect the underlying idea or information that is communicated.  See, e.g., supra note 34.  See also 17 U.S.C. § 102(b).
[134] See United States v. 16.92 Acres of Land, 670 F.2d 1369, 1373 (7th Cir. 1982) (finding it “axiomatic that property rights are not absolute”).  See also United States v.  Taylor, 8 F.3d 1074, 1077 (6th Cir. 1993) (real property owner does not have absolute right to bar government from entering the property).
[135] See supra note 37.
[136] See supra note 36.
[137] See generally Konigsberg v. State Bar of Cal., 366 U.S. 36, 63 (1961) (Black, J., dissenting) (“[a] primary purpose of the First Amendment was to insure that all ideas would be allowed to enter the ‘competition of the market.’”); Detroit Free Press v. Ashcroft, 303 F.3d 681, 683 (6th Cir. 2002) (“Democracies die behind closed doors.”).
[138] But see Agora Financial, 725 F. Supp. at 495 (noting that premise of misappropriation doctrine was to protect the labor required to discover, gather and produce intellectual property).
[139] See supra notes 40-42 and accompanying text.
[140] Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 349-50 (1991) (internal citations omitted).  See also id. at 352-53 (expressly rejecting copyright protection under the “sweat of the brow” theory, which was based on the labor or efforts expended by someone to compile information).
[141] Chakrabarty, 447 U.S. at 309.  See also Bilski et al. v. Kappos, 130 S. Ct.  3218 (2010).
[142] See generally Joseph Singer, Introduction to Property § 2.1 at 24 (2d ed. 2005) (possessor of property presumed to be true owner of the property); Hovenkamp & Kurtz, supra note 28, at § 1.1 at 1 (possession very important factor in determining property ownership).
[143] For example, a non-owner can acquire property rights in another person’s property by maintaining exclusive possession of the property for a statutorily prescribed period under the doctrine of adverse possession.  Stoebuck & Whitman, supra note 35, at § 11.7 at 853-60.
[144] An inventor does not lose his or her right to file a U.S. patent application as a consequence of publicly disclosing the invention provided the application is filed within one year of placing the invention in the public domain.  35 U.S.C. § 102(b) (1999).  Works protected by copyright law likewise do not forfeit copyright protection due to public disclosure.  Copyright law provides that the copyright owner has the option, but is not required, to place a copyright notice on publicly distributed copies of the work.  17 U.S.C. § 401(a) (2010).  Placing the notice on the work informs the public of the copyright and maximizes the availability of damages.  Id § 401(d).
[145] Under U.S. Patent law an inventor must disclose how to make and use his or her invention in a utility patent application.  See 35 U.S.C. § 112(a) (1999).  Most utility patent applications are made publicly available eighteen monthly after filing and issued patents are made publicly available upon issuance.  Id. §122(b)(1)(A).
[146] See generally International News Service, 248 U.S. at 264-67 (Brandeis, J., dissenting) (legislature better equipped than courts to engage in fact finding, examining public policy issues, trying to avoid unintended consequences, and crafting appropriate laws to protect the news).
[147] International News Service, 248 U.S. at 239-40.
[148] See, e.g., Motorola, Inc., 105 F.3d 841, 852 (2d Cir. 1997) (free riding element of state common law misappropriation action).
[149] Competitors can generally copy the ideas of others without legal recourse because ideas are typically not protected by intellectual property law.  See generally supra notes 40-42 and accompanying text (noting that neither patent nor copyright law protect mere ideas).
[150] This type of free riding has been one of the underlying rationales for proponents of pending federal legislation to protect fashion design.  See J.L. Jackson, Some Designers Say Their Work Deserves Copyright Protection; Others Say It Would Harm the Industry, ABA Journal, July 1, 2011, available at http://www.abajournal.com/magazine/article/the_genuine_ article/.
[151] See generally Ruth La Ferla, Faster Fashion, Cheaper Chic, N.Y. Times, May 10, 2007, available at http://www.nytimes.com/2007/05/10/fashion/10FOREVER.html?pagewanted=1& 8dpc&_r=1 (discussion of allegations that clothing chain Forever 21 competes by copying clothing designs created by others).
[152] Additionally, free riding is both commonplace and acceptable—at least to some extent—in artistic endeavors,  See, e.g., Lindsay Warren Bowen, Jr., Givings and the Next Copyright Deferment, 77 Fordham L. Rev. 809, 825 (2008) (“Many judges and scholars agree that all writers and artists build on the works of others to some extent, and that this is a permissible appropriation of ideas and expressions from the public domain.”).  Music is generally categorized into types such as rock, jazz, blues, etc.  If I were the first person to develop rap music, others would be free to copy that style of music since general categories or types of music is beyond the scope of copyright law.  The same applies to literature and innovation.  Patent law effectively recognizes and encourages free riding by permitting inventors to obtain patents on improvements of preexisting inventions invented by another party.  35 U.S.C. § 101 (1999).
[153] See Cheney Bros. v. Doris Silk Corp., 35 F.2d 279, 279-80 (2d Cir. 1929) (plaintiff, who produced new silk patterns every season of which only about 20% were successful, asserted that defendant engaged in free riding by only copying patterns that were successful and gained an economic advantage by avoiding the cost of producing unsuccessful designs).
[154] Trademark law can be utilized to protect branding efforts because almost anything that creates an association between a particular product and a provider of that product is potentially registrable as a trademark under federal trademark law.  See 15 U.S.C. § 1127 (definition of trademark).  In Qualitex Co. v. Jacobson Prods. Co., ,the Supreme Court held that the color of a product could be registered as a trademark.  514 U.S. 159, 161-62 (1995).  The court further noted that the U.S. Patent and Trademark Office has registered shapes, sounds and scents as trademarks.  Id. at 162.
[155] See supra note 153.
[156] 248 U.S. at 240-41.  Some subsequent lower court decisions have made ruinous competition an element of a state common law misappropriation action.  See, e.g., Barclays Capital, 650 F.3d at 896.  .  .  (“The adoption of new technology that injures or destroys present business models is commonplace.”); Motorola, Inc., 105 F.3d at 852 (“[E]lements central to an INS claim . . . [include] the ability of other parties to free-ride on the efforts of the plaintiff would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened.”).
[157] See, e.g.Barclays Capital, 650 F.3d at 896.
[158] See International News Service, 248 U.S. at 240-41.
[159] Id.
[160] 8 F. 159 (D. Ma. 1881).
[161] Id. at 159.
[162] Id. at 162 (“Unless [the custom] . . . is sustained, this branch of industry must necessarily cease, for no person would engage in it if the fruits of his labor could be appropriated by any chance finder.”).
[163] See Frosch, supra note 8.  See generally Brian Westley, How a Narrow Application of “Hot News” Misappropriation Can Save Journalism, 60 Am. U. L. Rev. 691, 729-30 (2011) (arguing that free riding is imperiling traditional daily newspapers).
[164] See Frosch, supra note 8.  See also Associated Press, 608 F. Supp. 2d at 457-58.
[165] The Westlaw and LEXISNEXIS on-line legal database services exemplify the provision of useful value-added services: Both databases primarily charge for access to data even though much of the data is currently available on-line for free from other websites; however, both services continue to thrive because they offer value-added services in the form of efficient search engines and various other aggregation services that allow users to find relevant information more quickly and easily than on free access websites.
[166] For example, the Western Union Company started as a telegraph company in the 1800s and for a long time their primary business was delivering telegrams, but they ultimately abandoned that business model and today primarily engage in the transfer of money around the world.  See Western Union History, http://corporate.westernunion.com/history.html (last visited Aug. 15, 2011); Robert Siegel, Western Union Sends its Last Telegram, NPR, Feb. 2, 2006, available at http://www.npr.org/templates/story/story.php?storyId=5186113 (Western Union’s telegram business eliminated by other technology such as telephone, fax, email and instant messaging).
[167] See Eric Pfanner, Music Industry Counts the Cost of Piracy, N.Y. Times, Jan. 21, 2010, available at http://www.nytimes.com/2010/01/22/business/global/22music.html.  See generally OECD Report on Digital Music: Opportunities and Challenges (Dec.  13, 2005), available at http://www.oecd.org/document/46/0,3746,en_2649_34223_34994926_1_1_1_1,00 .html (delivery of music via Internet is disruptive technology for music industry).  See also Jared Welsh, Pay What You Like – No, Really: Why Copyright Law Should Make Digital Music Free for NoncommericalUses, 58 Emory L.J. 1495, 1512-13 (2009) (discussing technological advances that have negatively affected the music industry).
[168] See, e.g., The Decline of the Newspaper Business, The Motley Fool Blog, Aug. 3, 2011, http://www.fool.co.uk/news/investing/2011/08/03/the-decline-of-the-newspaper-business .aspx.  See also How Newspapers are Faring, The Economist, July 7, 2011, available at http://www.economist.com/node/18904190.
[169] See generally IDC Estimates 50% Growth in Worldwide Smartphone Market in 2011, Mobile Marketing Watch, Mar, 29, 2011, http://www.mobilemarketingwatch.com/idc-estimates-50-growth-in-worldwide-smartphone-market-in-2011-14227/ (noting substantial growth in sales of smartphones).
[170] See generally David Ratner, Music 2.0 – The Future of Delivering Music Digitally, 4 U. Denv. Sports & Ent. Law J. 136 (2008) (music industry must transform its business model to remain viable); HenryPerritt, New Architectures for Music: Law Should Get Out of the Way29 Hastings Comm. & Ent. L.J. 259 (2007) (discussing new business models for music industry).
[171] 15 U.S.C. §§ 1-2 (2004) (Federal antitrust law under the Sherman Act prohibits agreements that restrain interstate commerce and conduct that improperly monopolizes interstate commerce).
[172] 35 U.S.C. §§ 1-376 (1999).
[173] 17 U.S.C. §§ 101-1332 (2010).
[174] Uniform Trade Secrets Act §§ 1-12 (1985), available at http://www.law.upenn.edu/ bll/archives/ulc/fnact99/1980s/utsa85.htm (enacted by 45 states and the District of Columbia, Puerto Rico, and U.S. Virgin Islands).
[175] 15 U.S.C. §§ 1051-1141 (2002).
[176] Unfair competition is defined as “dishonest or fraudulent rivalry in trade and commerce.” Black’s Law Dictionary 1529 (7th Ed. 1999).  See also Paul Goldstein & R. Anthony Reese, Copyright, Patent, Trademark and Related State Doctrines 65 (6th ed. 2008) (“[S]tate unfair competition law embraces a continuum of deceptive conduct.”).
[177] See, e.g.Dastar, 539 U.S. at 27 n.1.
[178] See, e.g., 15 U.S.C. § 1125(a) (federal unfair competition action); Dallas Aerospace, Inc. v. CIS Air Corp., 352 F.3d 775, 778 (2d Cir. 2003) (Under New York law “the elements of negligent misrepresentation are: (1) carelessness in imparting words; (2) upon which others were expected to rely; (3) and upon which they did act or failed to act; (4) to their damage.  .  .  .  [and] that (5) the declarant must express the words directly, with knowledge or notice that they will be acted upon, to one to whom the declarant is bound by some relation or duty of care.”).
[179] See generally supra note 20.  See also David M.  McGovern, What is Your Pitch?: Idea Protection is Nothing but Curveballs, 15 Loy.  L.A.  Ent.  L.J.  475 (1995) (discussing differing judicial approaches to common law protection of ideas under contract and other theories).
[180] See generally Reeves, 926 P.2d at 1142 (contracting parties should be free to decide whether to contract for idea without regard to whether idea novel or original).
[181] Wrench LLC v. Taco Bell Corp., 256 F.3d 446, 461 (6th Cir. 2001).
[182] See generally Goldstein & Reese supra note 176, at 57 (idea submitters generally lose disputes when court invokes property rationale).
[183] 403 N.W.2d 666 (Minn. Ct. App. 1987).
[184] Id. at 669.
[185] Id.
[186] Id. at 670 ($520,313 for past and future damages).
[187] Id. at 671.  Likewise, in Sellers, 668 F.2d at 1210, the court stated that under New York law, recovery for misappropriation of an idea was only permissible if the idea was both novel and concrete.  See also Smith v. Recrion Corp., 541 P.2d 663, 669 (Nev. 1975) (stating abstract ideas must be both novel and concrete to be legally protectable).
[188] Tate, 403 N.W.2d at 671.  See also Riordan, 2009 U.S. Dist. LEXIS 114165, at *30-31 (idea novel if it is innovative, inventive and new).
[189] Tate, 403 N.W.2d at 672.
[190] See generally Nadel, 208 F.3d at 378 (misappropriation of property claim cannot apply to idea known to public because such idea is not property).  See also Wrench, 256 F.3d at 460 (generally ideas must be both novel and concrete to be protected as property).
[191] Wrench, 256 F.3d at 461.
[192] Id.
[193] 208 F.3d 368 (2d Cir. 2000).
[194] Id. at 371-72.
[195] Id. at 372.
[196] Id. at 372-73.
[197] Id. at 380.  But see Lapine v. Seinfeld, 918 N.Y.S.2d 313, 321 (N.Y. Sup. Ct. 2011) (holding that federal court in Nadel incorrectly held that the less stringent novel-to-buyer standard applies to an implied-in-fact contract for an idea).
[198] Nadel, 208 F.3d at 378.
[199] Id. at 380.
[200] See, e.g.Reeves, 926 P.2d at 1140 (novelty not required for implied in fact contract claim for an idea).  But see Wrench, 256 F.3d at 461 (“]M]any courts do require novelty in an action based upon an implied contract theory on the ground that there can be no consideration for an implied promise to pay if the idea does not constitute ‘property.’”).
[201] Nadel, 208 F.3d at 378-79.
[202] In Widener v.  Widener, the court stated that a contract was unenforceable due to unconscionability if the court determines the contract is both procedurally and substantively unconscionable: Procedural unconscionability involves fraud, coercion, duress, undue influence, inadequate disclosure, and misrepresentation in the formation of the contract. . . .  Substantive unconscionability involves harsh, one-sided, and oppressive terms of a contract. . . .  However, the inequality of the bargain must be ‘so manifest as to shock the judgment of a person of common sense, and . . . the terms . . . so oppressive that no reasonable person would make them on the one hand, and no honest and fair person would accept them on the other. No. COA02-1242, 2003 N.C. App. LEXIS 1556, at *8-9 (N.C. Ct. App. Aug. 5, 2003) (quoting Brenner v. School House, Ltd., 274 S.E.2d 206, 210 (N.C. 1981)).  See also Uniform Commercial Code § 2-302 (1) (court can find as a matter of law that contract unconscionable and therefore unenforceable).
[203] See generally Reeves, 926 P.2d at 1137 n.7 (in an idea dispute the court noted that consideration for contract was asserted to be services provided so that it was not necessary to determine if idea lacking novelty was contractual consideration).
[204] Id. at 1142 (“If parties voluntarily choose to bargain for an individual’s services in disclosing or developing a non-novel or unoriginal idea, they have the power to do so.”).
[205] See generally Stanley v. Columbia Broad. Sys., Inc., 221 P.2d 73, 85-86 (Cal. 1950) (en banc) (Traynor, J., dissenting) (parties should be free to contract for disclosure of an idea without regard to whether it is novel or something in the public domain and such disclosure can be valid contractual consideration).
[206] In Nadel the Court stated that mere disclosure of an idea or information does not create an implied-in-fact contract; the necessary elements to create a contract must be present.  208 F.3d at 376-77 n.5.  See also Reeves, 926 P.2d at 1140 (contract not implied merely by disclosure of idea).
[207] See, e.g.Nadel, 208 F.3d at 371 (toy designer alleged that toy company used designer’s toy idea without paying compensation for it contrary to industry custom); Reeves, 926 P.2d at 1133 (plaintiff alleged that defendant company appropriated his idea of building a visitor center at a popular location adjacent the Trans-Alaska Pipeline); Recrion Corp., 541 P.2d at 664 (plaintiff alleged that Stardust Hotel in Las Vegas used his idea of building and operating a recreational vehicle park as part of the hotel).
[208] In contrast to an express contract where promises are expressly made either orally or in writing, under an implied-in-fact contract the promises are implied based on the conduct of the parties.  See Stanley, 221 P.2d at 85 (Cal. 1950).  See also Confold Pacific, 433 F.3d at 958 (implied-in-fact contract is a type of express contract where behavior of the parties takes the place of express statements); Reeves, 926 P.2d at 1140 (implied-in-fact contract created when surrounding facts and circumstances imply parties intended to enter contractual agreement).
[209] Reeves, 926 P.2d at 1140 (both express and implied-in-fact contracts require finding that parties intended to enter contract).
[210] 208 F.3d at 371-72:

To facilitate the exchange of ideas, the standard custom and practice in the toy industry calls for companies to treat the submission of an idea as confidential.  If the company subsequently uses the disclosed idea, industry custom provides that the company shall compensate the inventor, unless, of course, the disclosed idea was already known to the company.

[211] See generally Uniform Commercial Code § 2-202 (a) (trade usage may be used to explain or to supplement express written contract terms).
[212] See supra note 15.
[213] See supra note 18 and accompanying text.
[214] See, e.g., supra notes 16-18.
[215] See generally Shubba Ghosh, et al., Intellectual Property – Private Rights, The Public Interest, and the Regulation of Creative Activity 764-765 (2d ed. 2011) (courts have struggled with the application of misappropriation doctrine); Pearson, supra note 73 (noting a lack of uniformity in idea submission disputes due to the multitude of different theories and differing state interpretations of such theories combined with the factual complexity of such cases); Mary LaFrance, Something Borrowed, Something New: The Changing Role of Novelty in Idea Protection Law, 34 Seton Hall L. Rev. 485, 485 (2004) (“[S]tates vary considerably in the scope of, and prerequisites for, legal protection granted to ideas”).
[216] Arthur Miller, Common Law Protection for Products of the Mind: An “Idea” Whose Time Has Come, 119 Harv. L. Rev. 705, 711-14 (2006).