This episode is audio from the Sustainability in the Eye of the Beholder panel from the Engelberg Center's Conspicuous Consumers Symposium. It was recorded on October 16, 2025.
Announcer 0:00
Welcome to engelberg center live a collection of audio from events held by the engelberg center on innovation Law and Policy at NYU Law. This episode is audio from the sustainability in the eye of the beholder panel from the engelberg Center's conspicuous consumer symposium. It was recorded on October 16, 2025
Rochelle Dreyfuss 0:24
so this panel is now going to dig deeper into the role of intellectual property in the circular economy, and as we'll see, IP protection can facilitate a move to a more sustainable environment, but it can also hinder the types of activities that enable circularity, and so we have a terrific panel to discuss both sides of that issue. Maggie Chan from the University of Seattle's law school, oh, the title is so long. Donald and Linda Hurwitz, Endowed Chair for the pursuit of justice and faculty director of the Institute on technology, innovation, law and ethics. She's written about IP and the conditions necessary for human flourishing for as long as I've known her, which is pretty much forever and so and she's recently turned her attention to sustainability issues. Erin, and I'm sure I'm going to pronounce this wrong person now, ski from the University of Michigan and the Thomas W Lachey, I don't, can't pronounce that either, professor of law, but known in these parts as co author with our own Jason Schultz. So Jason and I had a big fight about whose panel he'd be on, and neither of us won. So he's gracing us twice on this panel. We needed him because he has written extensively about the right to repair. Then we have Jessica silbey, Boston University School of Law, where she's the Honorable Frank R Kennison, distinguished scholar of law and Dean for intellectual life. She's a regular at these conferences, so no need to tell you about all the marvelous empirical work she's done on creative behavior and on the creative community. Finally, Anna tischner, who holds the intellectual property chair at angelonian University in Krakow Poland, and I'm especially grateful for Anna for having made this trip all the way from Poland, as you heard from Nancy, the Europeans are so far ahead of us in thinking about these issues and appreciating circularity in regulating on these matters that I really wanted somebody From Europe to come to help us think through the area. So Anna is going to start us off with an overview of the intersection between IP and sustainability, including a description of some of the EU's recent efforts that Nancy actually mentioned. So I turn it over to you, Anna. Anna,
Anna Tischner 3:04
thank you very much. It's a real pleasure to be here today to discuss the topic that is both urgent and complex. And let me begin with a line from sting, I'm an alien. I'm a legal alien in New York. I bring a European perspective to this American discussion, and from the Nazis introductory speech, I see it's already here. So I believe our conversations need to be intercontinental, because the challenges we are facing are truly global. So indeed, the European Union has set an ambitious target climate neutrality by 2050 and the key tool is the circular economy, moving away from the old take, make, dispose model, and instead keeping products and materials in use for as long as possible, We already see a legal framework emerging the Eco design regulation mandates more durable, interoperable products. It provides for the digital product passports and it even prohibits destroying unsold goods. The right to repair directive gives consumers a new right to have products fixed. Additionally, consumer protection law has been updated to combat greenwashing, and the Circular Economy Act is on the horizon, so you can see the whole set of regulatory framework. But one crucial piece is missing. It's intellectual property law, except for a narrow repair clause in the in EU design law, which I think I will address later on. IP rules have barely been touched worse, according to the. Right to repair directive IP protection can even override the right to have goods fixed. So this raises a fundamental question, can IP law evolve to support sustainability and the public interest, including our fundamental rights to a healthy environment. In my intervention, I will focus on trademark law mostly, but there are other IP regimes can which can support or incentivize this sort of creativity and innovation. So circular economy is about keeping products and materials in use through repair, refurbishment, reuse, recycling. All these are principles and our practices. As you can see in the waste management hierarchy, reuse ranks higher than recycling. And here is the catch, many of those sustainable practices involve branded goods, and that's where trademark law can become a barrier to those such needed practices. I will discuss first, transformative practices taking upcycling as an exam. So upcycling transforms waste into higher value products. It extends the life of materials, adds creativity and often tells a sustainability story, but the story gets complicated when branded materials are used for upcyclers, the trademark, often is the story. It shows the past life, past identity of material for brand owners. However, it's a risk, potential confusion, misappropriation or reputational harm. Upcycling is a line drawing problem. It can be a private and small scale craft based niche endeavor like the trousers created by my sons. It can be a cultural practice as the garment created from old Louis Vuitton bags by a Dutch designer. And it can also be a commercial practice, a business model, as the cups made from old polar vintage swim shorts, lunch large companies have started to embrace cycling themselves. Nancy mentioned Patagonia practices, but you can see other big brands which which started to get involved in those practices, not only to show their sustainability commitments, but also to control the narrative and the secondary market. They collaborate with upcyclers, or otherwise, they blurred the line between collaboration and infringement. It's what Gene Frommer calls trademark own infringements. It makes them easier to challenge independent upcyclers Then and the cheating effect on small, sustainable, socially valuable initiatives is real as a result, under current doctrine, the exhaustion principle, or American first sale doctrine, this principle doesn't help. Once a product is maturely altered, exhaustion is gone. So in other words, a branded item never really becomes waste that can be freely reused to create new product. That's a big obstacle to circularity. Academia in Europe tried to mitigate these by employing referential use defense. So form of fair use defense. The idea is, if you use the brand honestly to inform about the past identity of upcycled products with transparency and disclaimers, you should be fine. And in many cases, the trademark isn't about origin anymore. It's about history in upcycling cases, but the courts don't buy it. The Court of Justice said that once the trademark is part of the product, it's distinctive and it can't be otherwise communicative. It can't be descriptive or referential or otherwise informative. And so far, we have just one decided case in Europe. Maybe it's not the best representation of the problem, because the origin of those scars being integrated was not certain. I think they were not original ones. That's why the exhaustion. Principle didn't work this in this case, but this is the only case which was decided and the upcycle are lost. But the question is, what do consumers think about upcycling? Together with my colleagues, we conducted experiments and service based on those images to test consumer awareness and to test also consumer reactions. So in general, our research shows that consumers are not so easily confused. Awareness of upcycling is still low, but branded material does not automatically mislead consumers. Context and disclosure make all the difference. The study will be published soon in a book devoted to upcycling in Cambridge University Press, so you can learn the details. Now we would like to move to from transformation to preservation of goods. And refurbishment is a type of is an example of practices which preserve goods which restore a product close to new. In fact, refurbishment is booming in Europe, so consumers are buying more refurbished products and platforms are growing. As you can see from this slide, there are many, the problem is we hear refurbished, reconditioned. We hear remanufactured like new, pre loved and No. Nobody agrees what this exactly means. Trademark law adds another tension. Refurbished goods are usually resolved under the original brand, but how much intervention is acceptable? Minor repair clearance? Yes, fine, but looks fine, but replacement of key components or even reapplying the trademark may be problematic for brand owners. For them, it looks like a different product. So EU law says that trademark exhaustion does not apply if there are legitimate reasons to object, especially where the conditions of goods is changed or impaired after they have been put on the market.
Anna Tischner 12:41
This happened. This usually arise when serious damage to trademark reputation or misleading impression of an economic link is created. But consumers buy refurbished phones and laptops, and they already know they are not as new. They expect some differences in quality, and they do not automatically hold the brand responsible. And in fact, it's product safety which is guaranteed through technical standards. So what matters more or most is disclosure. The more transparent the reseller is about what has been done, what parts have been replaced, and who is responsible, the lower the risk of confusion and reputational harm is so trademark infringement should only come into play when the quality falls so far below the expectations that it seriously damages the brand against expectations and contexts matter. So this leaves us with two key questions, where do we draw the line between normal refurbishment and material alteration, and how can full disclosure bridge the gap between sustainability and trademark protection in particular, can full disclosure remedy such substantial interventions in the product. I made an experimental I did and conducted some experimental research which digs into this, and this shows that when consumers are fully informed about the source of spare parts and the scope of repairs. They understand the differences from the original product, and they do not attribute those changes to the original plant. I will pause for the moment and pass the mic to mag, who is going to continue with the sustainability communicative sustainability, communication channels, which trademarks can serve us. Thank you.
Rochelle Dreyfuss 14:48
So you give us a great description of the barriers. And I think Maggie is going to talk a bit about the facilitation, and Rebecca over there. Is an exam question dressed as she is choo choo cola.
Margaret Chon 15:09
Let's see if I can get this started.
Rochelle Dreyfuss 15:17
We're also wearing various versions of recyclables. So Maggie's sweater is recyclable Eileen Fisher and so are my pants. You
Rochelle Dreyfuss 15:47
Michelle, loaded from the Google Drive. Yeah, finding them seems to be a problem. I
Anna Tischner 16:14
just using this pause, I would like to tell you about one case, British case, which is a borderline case where the traditional cookers, AGA cookers, were converted from running on traditional fossil fuels, into running on electricity. And in this case, a brand owner didn't oppose such a conversion and this sort of refurbishment, but the way it was advertised, so better explanation was needed. So it's, I think it's a good news, yeah, that brand owners are not against refurbishment, but the way it's communicated not to result, not to bring the results which are reputational or,
Rochelle Dreyfuss 17:09
well, I guess Nancy gave us a taste of why that they sell more if they think they're refurbishable. So having somebody advertise that it's refurbishable would help if it's done correctly.
Margaret Chon 17:23
All right. Well, thank you so much the engelberg Center for hosting this wonderful conference, and to especially to Professor Rachelle Dreyfus for convening this panel. And, of course, many thanks to Thorstein Veblen. Hello, hello. Is that better? Is that better? Okay, good. And thanks, of course, to Thorsten Veblen for introducing us to the endlessly fascinating phenomenon known as conspicuous consumption way back in 1899 and also for having a really cool name, the labels and marks that I'll discuss today connect to the circular economy and really that has been very well explained already by Nancy and Anna and some of the labels are also committed to social uplift through economic empowerment of producers, which I'll also consider a key part of the definition of sustainability. One caveat before I dive in, the title of my slides was certification marks, the impact of certification marks. But certification is not synonymous with the technical category of certification marks as a subset of protectable marks under US law and the laws of some other countries, many Mark owners, even if they engage in certifying activities, prefer to register their marks as trademarks or service marks, and that's probably because of the greater flexibility in those categories, as opposed to the more stringent requirements demanded of certification marks. I'll be discussing all three types of marks today, but regardless of their classification under the trademark system, these marks represent what could be called a bottom up rather than a top down regulatory strategy, a strategy that depends on market choices made by individual consumers. Slide number two, I'll start with a brief certification anecdote as a self aware salmon snob from Seattle. I asked a waitress in a Texas restaurant recently whether the salmon on the menu was farm raised. She told me that the restaurant offered arc A certified salmon. After some quick research on my smartphone, I decided to order it because it was certified, although I wasn't sure to what standards and I would highly recommend arc A to those of you who like salmon, even though it is farm raised and tastes completely different from the wild caught salmon that we're used to in the Pacific Northwest. It's kind of creamy, as opposed to firm and consistency. It's really lovely, and it has a lot of certifications. If you saw my slide, you'd see them all. It even made the top 4% of the Dow Jones Sustainability Index, something I had no idea even. Existed. The point is that the certification helped me to make a quick decision. It provided the proverbial cognitive shortcut that trademarks are supposed to provide to consumers, but it did so because I trusted something about the certification standards and the processes associated with the mark. So what is the something that consumers can trust in certifications. So I blame a particular mark for getting me stuck in this particular rabbit hole of trademark law, and I was stuck there for about 15 years. My environmental law professor friend Errol meiniger was on the board of the forestry Stewardship Council, also known as FSC, based in Bonn, Germany, and parenthetically, one of my former students eventually worked there as well. Errol asked me a seemingly simple question before a Law and Society meeting on which we were supposed to have a panel together, how this particular certification mark, FSC, fit into the doctrinal trademark framework. And I quickly realized that I couldn't answer his question, because there had been very little scholarly attention paid to the phenomenon of certifications. So FSC is a good place for us to take a little deeper dive. I can show my certification.
Speaker 1 21:17
There really are beautiful slides. So I'm glad that we have technology. For technology. All right,
Margaret Chon 21:25
yeah, so that's the certification. Sorry for the salmon. Sorry. Okay, so FSC is a good place for us to take a little deeper dive into what we can trust and perhaps what we should be skeptical, skeptical about with regard to certifications. So what does that FSC Mark supposedly stand for? According to its website, it symbolizes zero deforestation, protection of plant and animal species, a fair wage and work environment for forestry workers and community empowerment. That's a huge lift. And as you can see here from the FSC own research, a majority of survey respondents would choose FSC certified products over non certified alternatives. Now of course, this is trademark survey evidence, which can be highly problematic, especially if there's self interest involved, but for what it's worth, the survey was undertaken by an independent firm and covered 800 people in each of 33 countries, as well as 1200 respondents within the United States, regardless, while almost half of the survey respondents expressed willingness to pay more FSC certification typically doesn't yield significant price premiums at the raw material level. Instead, its economic value lies in maintaining market access and meeting buyer requirements, especially for large intermediate purchasers such as Home Depot. As a certification mark holder, FSC can certify forests and firms that adhere to its standards and refuse to certify those that do not comply. In addition to the typical trademark enforcement actions against putative counterfeiters, and the certification marks it holds can be integrated into hard regulatory frameworks as required standards for government purchase or procurement. I think that's here, yeah, which is, for example, established in many EU countries, as Anna just explained, and the West African country of Gabon adopted a policy requiring all forest concessions to achieve FSC certification by 2022 three years ago, there appears to be a relatively high level of consumer trust in this mark, which has been registered in the US since 1998 and in many other countries as well, its secondary meaning is relatively strong, therefore, and like any other type of mark, certification, marks require robust marketing and promotion and repeated purchases to build up the goodwill and brand recognition associated with them. Firm level purchasers would have a higher level of purchasing sophistication as well as purchasing power, presumably, compared to individual consumers. But I have noticed as an end consumer that many products offered by the retailers such as West Elmer Pottery Barn make this certification very apparent in their furniture. The next mark is fair trade International, also based in Europe, and according to its website, when you choose fair trade, you are choosing, quote, fair prices and decent working conditions, environmentally friendly farming practices, a strong voice for farmers and workers, gender equality and a better future for young people. You can see from its own commission survey that a positive economic lift of about 10% is given to producers from the certification along with price guarantees in the face of commodity price instability, although this slide shows coffee growers, the mark is applied to all sorts of agricultural commodities and even textiles and sports balls products bearing this particular. Fair Trade Mark generate 10 billion euros in sales annually, evidence which supports the approach of consumer driven or demand driven, standards, fair trade international withdrew its certification mark application that was filed in 2005 with the USPTO, but it currently has live trademarks associated with various commodities and live service marks associated with the implementation of certification schemes. With regard to certification, all fair trade international producer organizations and companies are independently certified by an organization called Flow cert. Of course, as a trademark and service mark owner, it can license the use of any of these marks to others under specified conditions, and therefore act as a de facto certifying body, regardless of the activities of its independent third party certifier. One thing it can do which a pure certification mark owner cannot do is to sell the commodities bearing the mark, basically a house brand, whereas a certification mark owners, such as FSC is confined to licensing the use of the certification only, and cannot sell goods or services bearing the mark. Any Mark holder, of course, can also police the use of their mark through infringement actions. In 2011 there was a falling out between Fair Trade International and its US counterpart, then called transfer, now called Fair Trade USA, over allegedly less rigorous standards adopted by Fair Trade International. Thus, one sees the green and blue mark mostly on commodity goods in Europe, and a different green and black and white mark for goods in the US. The Fair Trade USA mark, by the way is registered as a true certification mark in the United States, their schism highlights two different kinds of consumer confusion arising from certification different from the typical consumer confusion between competing goods with similar marks that we typically associate with trademark law. And I'll address, I'll address these certification specific confusions in the Q and A, okay, I get extra time because of the Thank you. So fair trade international claims a high level of goodwill in the form of consumer trust, awareness and buy into its mark. Again, these are self reported impacts. But one thing we've noticed is that the these certifying organizations are very eager to make sure they have demonstrable impact. Now turning to the third and final example, LEED. The LEED certification overseen by the US Green Building Council held based in Washington, DC, which has had live service marks on the primary register since the early 2000s like Fair Trade International, it had filed for and actually got registered, but then allowed its registered certification mark to lapse. You can see here that it claims a variety of different positive economic returns from the application of its certification relevant to the construction industry and its most recent three key focus areas are decarbonization, quality of life and the ecological conservation and restoration compared to the other two marks that I've discussed, this mark is more integrated into us, regulatory standards, through building codes, procurement policies and incentive programs, not just at The federal level, but also in many local jurisdictions. So include conclusion, there is some evidence to support the ideal type of certification that is one that has sufficient market recognition and acceptance by consumers to drive meaningful and widespread changes in sustainable sustainability practices. And at their best, they can create justifiable consumer trust and reliance, which then can drive changes in the market. So I'm going to leave you with this happy story. We can talk about sadder aspects of the story during the Q and A if you're interested in reading more about certification marks per se. This book chapter is available to download on SSRN, and its first footnote lists all of the literature that I've been able to find until the date of publication on the legal aspects of certifications. Like I said, I was trapped in this rabbit hole for a long time. I look forward to discussing more about this with you and others during the Q and A thank you so much.
Rochelle Dreyfuss 29:17
Thank you so Jessica and Mark McKenna have been thinking about this issue from the perspective of the people who actually design products. So she will give us some of their thinking. And just for Aaron's benefit, if you write with somebody else, you only have to be on one panel, because Mark is on a different panel. But say you write by yourself, you're stuck. Hi.
Jessica Silbey 29:42
I joined my panelists in thanking NYU for inviting me back yet again. I love coming. Don't stop inviting me. It's a vibrant a vibrant community of thinkers and lawyers, and I enjoy being here. So anyway, yeah, I'm here to share some of the empirical. All results from a project Mark McKenna and I have been working on for a long time, actually interviewing designers and observing their work to figure out how we believe an outdated legal system that addresses the work that they do misunderstands design practice and maybe thus fails to serve it. So the project centers accounts of designers and design practice in legal analysis, to rehabilitate, at least, we hope to rehabilitate the law's significance in the life of everyday designers, and its goal, that is the IPS goal of progress. So in the end, the hope is that the project will infuse intellectual property debates, that is how intellectual property should be structured, with the normative values of community flourishing that the designers are actually discussing beyond commerciality, especially given Contemporary struggles with resource scarcity, distributional inequality, sustainability and political polarization. So one of the things that we were forced to wrestle with is, what is design, right? So what is this design that designers do, and what is it that we're studying? So it's a tricky question in US law, because it's largely a hybrid legal landscape. So from interviews and observations and design literature creates all these legal interesting puzzles, and what we're finding from those sources is relevant to this event anyway, that designers are innovating as moral entrepreneurs in explaining and justifying the work that they do, that it's its process and its output in terms of contemporary social and political problems. So we're also learning that designers situate themselves quite differently than the usual IP protagonists in IP law, at least in three ways. So they describe design as a process, not necessarily as a thing. They insist on seamless integration of form and function, and they are committed to an ethics and a human centered politics, actually. So IP law does not do any of those things really very well. You know, separating form and function is very important in the design regimes, whether it's design, patent, trademark or copyright, for example. And IP insists on agnosticism actually, where designers do not. So we're not saying that authors and inventors don't think in terms of these other values or functions. But we are saying that designers as a professional identity are in fact, doing this in an exploding and surprisingly organized way, professionally, and we find that interesting. So for example, in our studies of the curricula that designers are pursuing and how they are learning to become designers, those curricula now include books like these, where human centered design and questions of human flourishing and equity, justice and inclusion are part of what they learn to become designers. So when we study their their educational curricula and their and their professional development, it's showing us how designers are learning they're not only ethnographers of the communities that they're making things or spaces for, but they're they're taking courses in classes, for example, that are called Design futures, for example, or designing for the Anthropocene. So what kind of problems then do they come to try to solve? So they describe solving the kind of problems that are just scary enough, for example, sort of the edge of the thinkable. Those are the kind of things that they like to really tackle. And these problems should change and improve human experiences, and they are deeply bespoke in particular communities with particular problems. So for example, here is just an example from IDEO, a very famous design firm, designing for particular medical problems, for example. And one of the things we we asked them is, how do they know when they've gotten a good solution, like, how do they know when they've created good design? And so they have metrics, actually metrics, of what progress is for them, what good design is, these metrics of coherence, minimalism, sustainability, accessibility and inclusivity. Now the IP folks in the room will see coherence and minimalism and think of in terms of esthetic constraints, but these are also material and environmental constraints. Designers routinely sought design outputs with nothing extra, where everything has a reason and wasted material and wasteful products are to be avoided. The last three measures, sustainability, accessibility and inclusivity may also seem like functional constraints, but they're also sociopolitical and emotional the usability of an object. Protect by all hands, for example, or the accessibility of a building and its landscape are considerations that the designers think necessary for good design and progress. So here are some examples from the from the interviews. I like bringing the voices into the talk. So one designer said one of the most satisfying projects I worked on was similar to the insulin pen example. I could explain why it was the way it was down to every detail. There was rational logic behind every decision we made. Nothing is just because, which means that there is nothing extra. So here's another one. I really appreciate esthetics and look and feel and beautiful things, and that's part of my passion. But I do not want to do something superficial, because I don't think that this world needs more junk for lack of a better word. Word, the ideal is some balance, something that I know will have a real impact. The main anchor of solving the problems is we go find the needs that people have. We don't go look for wants that people have, and then the last one, does the word need? Does the world need yet another pizza cutter? That's a good question. Actually, I feel like there needs to be a real rationale, especially for the brand like ours. This is Oxo, as to why everything exists. It needs to be purposeful. It needs to be doing something different. So here are some good pictures. So here's the insulin pens. Problem being solved. Is about designing devices for patients who don't want to adhere. So it's about uptake of of the medicine. For example. How do you design it so that it'll be used on a regular basis? And the dust pin, this is oxos Good Grips line where the dust pin is. Dust bin is supposed to be used by all hands, that is. It's usable by all different kinds of hands, arthritic, small, large, for example, where the two pieces fit together, supposed to be put together so that space is conserved and using as little material as possible, for example. So when Mark and I went to Oxo, there's this wall of gloves in their New York office, and that is supposed to remind these are found gloves, and they have little labels under them. They're supposed to remind employees that what they're making, they're making products for everyone. So this is about inclusivity. The Good Grips line was launched with the framework that designed concept of universal design, which people in the room might have heard of for a mass retail audience, better performing, easier to use kitchen tools for all hands, as I said, arthritic, small, left handed, economically accessible and durable. So smart design was the firm that does that participated with Oxo in helping launching this line, and the motivation behind it was not only actually accessibility and inclusivity, but also sustainability. These products are meant to be super durable, beloved, even stay in your kitchen for a very long time and not be thrown into landfills. So here's another example. So our landscape designers we talked to, of course, prioritize sustainability. They describe themselves as earth movers and stewards of the environment. And at the same time, they adhere to the principle of universal design as well, which can be a wicked problem for many already built environments. So one of our designers said, You know what we do is we do it with love, with about accessibility, getting people in the front door equitably, like forever it was. You can go around the back and there's a ramp on the loading dock, and you can take some freight elevator. Everything now is changing, which is great, and we want everyone to be going in the front door.
Jessica Silbey 38:33
So, so two things in in conclusion. I mean, as with any empirical study, we're approaching the data critically, we've been asking hard questions of our designers, challenging what you know, might some people in the room cynically might think is like a lot of happy talk, for example, we we do think, though, that what is happening among designers as we, as we probe their their practice, is that there's this evolving professional norm that's blossomed through education and practice and reactions to late stage capitalism and in its institution. So if you think about what happened in the turn of last century, from the from the 18th to the 19th or the 19th the 20th century, with journalism, medical practice and lawyering, the professional institutions were designed and created new professional codes, codes of ethics that had to we had to be followed, to follow the rule of law, to do no harm, for example, and to tell the truth in journalism, we think the same thing is happening with designers, at least. That's one of our hypotheses. And so if law is going to look to professional organizations and structure for its guidance as to what progress is in the progress clause of the Constitution, for example, I think designers are a good place to look. These are intriguing constraints. These constraints, these values, are intriguing constraints for what a consumer society might. Like that. It otherwise tends to prioritize more and accumulationist rather than the values that the designers actually want to pursue, which were the values I mentioned before anyway, and probably values that are very important for the 21st Century in the Anthropocene. So I'll leave it there, and I look forward to the questions i
Rochelle Dreyfuss 40:22
i do love my Oxo dust pens, if you're airing and you're going to talk more about what happens when products get into the hands of the consumers. What are they looking for?
Aaron Perzanowski 40:34
So I want to talk about the intersection of sustainability IP and repair. The right to repair debate, kind of, fundamentally, is about the question of whether consumers, I can talk through this. So it's about the question of, like, whether we as consumers have the right and the ability to fix the electronics, the appliances, the vehicles that we purchase outside of the sort of authorized channels that manufacturers provide right so firms have really strong incentives, in many cases, to assert control over the repair process. Repair markets can be incredibly lucrative. Just fixing cracked smartphone screens in the United States is about a $3 billion a year business, right? The other thing that's going on here is, if we have expensive repairs, that tends to drive new purchases of devices, and if you need to sell a couple 100 million smartphones a year to keep your shareholders happy, those sales are going to be coming largely from replacement purchases, right? So the repair restrictions that consumers run into cost us 10s of billions of dollars collectively every year. But that's only a small part of the cost that we are paying. There are massive environmental externalities here too, right, costs that the consumers in wealthy countries largely get to ignore you can't see this Well, you got a brief preview of this pile of electronic waste. So just just picture that in your head for a second here, as I'm talking right? So when we replace things rather than repair them, we're contributing to the electronic waste problem in the US alone. By the way, be prepared to be bummed out the entire time I'm talking and maybe at the end it'll get slightly better. Right? In the United States, we dispose of 400,000 mobile phones every day, right? 150 million of them a year. That's to say nothing about appliances, televisions, other kinds of home electronics. We produce about 60 million metric tons of E waste a year. That number continues to go up. Do you want to picture what that looks like? Probably not. I'm going to tell you anyway, that's enough electronic waste to fill up 1,000,018 wheel trucks that stretch from here in New York to Bangkok and back.
Rochelle Dreyfuss 43:36
Electronic West. You're going east. I'm sorry, going west, you're going east. That's a good question,
Aaron Perzanowski 43:42
either way. I think it's bad news, right? So these electronics account for about 70% of the toxic waste in US landfills. That's like lithium, arsenic, lead, mercury, chemicals that damage our water supplies and cause all sorts of like health maladies. Let's see, is this working? Yes, that's electronic waste. It gets worse. So that's the back end of the environmental problem. Like, what do we do with all this stuff after we've produced it? What about the production itself? Right? That's the front end of this problem. All these like, sleek devices that we carry in our pockets, they don't just like appear out of magic. They come from metals that have been embedded in rock for billions of years. One four ounce iPhone requires mining of 75 pounds of ore out of the earth. Right? There are 83 known stable elements in the universe. 75 of them are in your phone. That includes a whole bunch of rare earth metals that are mined in places that have essentially non existent environmental standards. This is a picture taken 20 minutes outside of Balto, a city of about. 2 million people in Outer Mongolia. There's a rare earth mine there that is responsible for this image of what the BBC called a nightmarish hell on earth, a lake filled with black, barely liquid, toxic sludge. This used to be an area where people farmed watermelon and eggplants and tomatoes today, nothing grows there. The livestock are dead, and there are like, widespread leukemia reports from the citizens. On the upside, I hear the iPhone comes in Lilac now. So, good job society. So why are so many of these devices so hard to repair, largely, it is by design, right? Design that is either either openly hostile to repair, or that prioritizes other kinds of product features, like, you know, having an iPhone that's a few millimeters thinner, planned obsolescence is not new, right? This has been around for about a century now, what's different now is software, which gives companies, like much more granular power over how we use the devices that they sell us. So I'm going to start with another one of the villains of the right to repair story, John Deere. John Deere, tractors, like most modern vehicles, have dozens of electronic control units that control all sorts of things, the power seat, the transmission. But if you want to diagnose and repair an issue with these tractors, you need access to the software. And so by controlling access to the software, Deere gets to decide whether repairs are made and by whom repairs are made. So even if you go out and buy an authentic John Deere part, you install it entirely correctly. Your tractor is not going to operate until John Deere sends an authorized repair technician to your farm or to the mom and pop repair shop in your community to connect their laptop and authorize these parts, to initialize these parts. That's an example of a technique called parts pairing that we see companies like Apple use as well. And the idea here is that you give every single component part that comes off of an assembly line a unique serial number, and you use that information to control whether or how those parts function in the automotive space. They call this Vin burning, but it's basically the same idea, and frankly, it's like it's an effort to undo the very notion of interchangeable parts, right, which was like, you know, like a pretty big deal in the history of, you know, the Industrial Revolution. There are other techniques that companies use, right? They refuse to sell replacement parts. They clamp down on resale markets. They cut off software support. Some of you have probably heard about this story. Just this week, Microsoft stopped supporting Windows 10 with free software updates, and you might think like whatever Big Deal upgrade to Windows 11. Well, it turns out there are about 400 million computers on the planet that run Windows 10 that do not meet the hardware hardware requirements for updates to Windows 11 many of those computers are owned by businesses and schools government agencies that prohibit the use of computers that aren't getting ongoing security updates, and so if all those machines get tossed, we're looking at an additional 1.6 billion pounds of electronic waste just because Microsoft doesn't want to continue support. Continue supporting this operating system. What's this have to do with the law? We could talk about antitrust, we could talk about consumer protection, all those things I think are really important here, but I want to focus on the IP issues. Fundamentally, IP here, from the manufacturer's perspective, is another tool that they can use to interfere with consumer repair. So I want to talk quickly through kind of four basic areas of IP law and how they bear on repair, some more quickly than others. You might think copyright law doesn't have a whole lot to say about the question of repair, but more than a century ago, the Seventh Circuit recognized a right to repair under copyright law in a case called Doan versus American Book. That's a case where a reseller of kind of beaten and battered children's books was sued by a publisher for replacing missing, missing and damaged components of those books, and the court there recognizes explicitly, quote, a right of repair or renewal right that allows the owner of a book to replace these parts, to fashion new ones, even if they are, quote, exact imitations of the original. This is the way the court put it, the right of ownership in the book carries with it and includes the right to maintain it as nearly as possible in its original condition. And denying that right would be intolerable and. And odious. Did that stop copyright holders from trying to interfere with that? Right? Absolutely not. Right. Let's see here. So how do they do that? One thing they tried to do is to assert copyright in parts numbers. Right? We've got a whole bunch of cases where we see companies trying to use part numbers as a way to interfere with the ability to identify and acquire replacement parts. There's a whole line of cases pushing back on that and saying, like, you know, whether it's a question of originality, whether it's a question of the merger doctrine, this argument just doesn't work, right? I think the same thing is true for most repair manuals, but we don't have a whole lot of case law on that point just yet. What else we have going on? Well, the other thing that I think is a more pressing issue is the software that all these modern devices rely on is often locked down behind some sort of technological protection measure, and that raises a risk of violating sexual section 1201 of the DMCA just by accessing the software to diagnose or repair a problem. Now it is true that since 2015 the Copyright Office has issued a series of exemptions to Section 1201 that relate to repairs, starting with farm equipment, later, all land vehicles, eventually, basically all consumer electronics. And that's helpful. I guess that's nice. The problem with those exemptions is they do not allow for the creation or distribution of tools that enable circumvention, right? So the copyright office says, Congratulations, farmers, you can break the DRM to get access to the software that runs your tractor. And the farmer says, How am I supposed to do that? Right? No one is allowed to make or provide a tool, excuse me, a tool that achieves that goal, right? Let me talk a little bit about patents here. You know. So since the 1850s patent exhaustion has held that buying a patented article carries with it the right to use that machine so long as it is capable of use. That's a principle we saw the Supreme Court reaffirm in 2017 when it told Lexmark it doesn't get to use patent protection and license terms to stop people from refilling their ink cartridges. Right? I'm going to skip over the repair reconstruction distinction for now, maybe we can talk about that later. The other issue that comes up is, though, is when we see individual component parts that are covered by either utility or design patents, right, which gives the manufacturer some real power over price and availability of those parts. And I think that's especially problematic giving given the incredibly low standards that we see in the design patent space, we've seen a big uptick in design patents, especially in automotive industry, for body panels, mirror assemblies, that sort of thing. But we also see this in the consumer electronic space. We see it with home appliances as well. I don't really have time to get into the details, but one important development here is last year, the Federal Circuit did away with its long standing and I think, deeply flawed Rosen Durling test for obviousness of design patents, that was in a case called GM versus lkq. You can see the parts that were at issue there. What exactly that's going to mean in the long term? I'm not sure yet, but hopefully it results in fewer of these low value design patents,
Aaron Perzanowski 53:35
trade secrets. I hear a lot from manufacturers directly and indirectly about their trade secret concerns, and when you press them on what exactly the trade secrets are that they're worried about, they don't really have much else to say. That's because a lot of these trade secret claims are bogus. It's information that's already widely known. It's information that is readily ascertainable. A lot of the information is available through pretty simple reverse engineering, and what I try to remind them is just because you don't want to share a secret doesn't mean that we have to respect your wishes. Here, there are lots of circumstances where the government requires disclosure of information that companies would rather keep to themselves, but they're countervailing public policy concerns trademarks we've heard a bit about already, so I'm not going to say a whole lot here. The biggest problem here, I think, is importation, right? So generally speaking, right? Trademarks are exhausted in much the same way we see in patent law. But the wrinkle here, under US law is this material difference test. So if the product being imported or sold differs in some material way. The trademark owner has some power to intervene, and courts, I think, are much too eager to find material differences between products sold outside of the United States and products sold in the United States. Is the warranty six months longer material difference can you call. To get phone support for your ball bearings, material difference, right? That is a real issue here. Trade dress for replacement parts. I'm not too worried about the functionality doctrine does a good job with that. Advertising. I'm not so worried about nominative fair use manages that pretty well, which is not to say we don't hear these claims, but I think they're good responses. One final point here is to not be totally negative. I've been working for the last several years with the repair Association us perg, a company called iFixit, to get state laws passed that require companies to make parts, tools and repair information available on reasonable terms to consumers and to independent repair providers. So far, we have passed laws that cover more than 100 million people in the United States, particularly proud of getting one of these laws passed in California, it's been one of the singular pleasures of the last several years to be part of this, like barely funded group of mostly volunteers who beat a multi trillion dollar company into submission on their home turf. That was a real that was a real treat. We're continuing to work on federal legislation. So lately, I've been working a bit on the National Defense Authorization Act, to get a right to repair procurement provision in place for every piece of equipment that the Pentagon purchases. And we're hoping to get some major reforms to Section 1201, introduced in the current Congress. So we'll see how that plays out. I will stop there. I got plenty more to say about repairs. So if you have questions, happy to take them.
Rochelle Dreyfuss 56:51
Anna, did you want to talk a little bit about this repair issue in the EU and spare parts
Anna Tischner 56:57
very shortly, I would like to intervene with the European perspective on trademarks as barriers to repair. So in general, trademarks can be used to commercialize spare parts to signal their intended purpose, but trademarks can also form part of the appearance of a spare part itself. Let me find the correct slide, which is yeah here. So under EU design law, we have a mandatory repair clause to solve the problem we see on the secondary market, the monopoly over the secondary market, which may be result of the design protection of a spare part. So the repair Clause allows independent manufacturers to make and sell spare parts that reproduce a protected design, as long as it is genuinely for repair. So this case works fine in design law, it's not an infringement. So you can reproduce the protected design if you want to offer a spare part for the repair purposes. The real tension comes from trademark law. The repair clause does not apply horizontally within the whole IP system, and when different IP rights overlap, as they often do, at least in Europe, companies can bundle them to block competition and slow down circular economic goals. So in principle, trademarks are not supposed to restrict market access, they indicate origin. They shouldn't block, lock down secondary markets. But in practice, Court of Justice ruling show the opposite, and take this example, Audi example, an independent in distributor offered spare parts for older Audi models, parts which Audi itself no longer produces. This part simply had a space left for the Audi logo, a mounting element, and the distributor argued that this was purely referential use, telling buyers what the parts were for. The court disagreed, saying that trademark on the product cannot serve that communicative function. With my colleague katasana, we ran an experimental study to see how these parts are actually perceived by professionals and by end users, and indeed, professionals, workshops, garages, part dealers saw the logo not as an indicator of origin, but rather as a description of a purpose. So I think we I don't think that trademark adjudication should rest purely on empirical findings. I believe that trademark law is a normative project. Right, but the results of our and similar empirical studies can spark a broader debate on trademark policy, and they can challenge rigid, abstract assumptions about the limits of trademark protection. I strongly believe that transparency and disclosure can protect consumers, can safeguard brands and keep the circular economy moving. So this is my addition to Aaron's presentation.
Rochelle Dreyfuss 1:00:31
So the metrics issue, so that has to come up, not only for the designers and thinking about what it is that they're doing, but also for the certification marks. So is that what the confusion you were talking about? Maggie, yeah, so I
Margaret Chon 1:00:50
make sure that people can hear me. I referred to, I alluded to two different kinds of confusion associated with certification marks. One is related to the opacity of the standards that are represented by the marks, it's very hard to find out what they really mean, unless you do a lot of digging, and I mean hours of digging into their
Rochelle Dreyfuss 1:01:11
website. Do designers think about this too? I mean, are they asking that question? What do these marks mean?
Jessica Silbey 1:01:18
So the designers are usually doing these things for clients. So we they don't think about the IP as much. And I think if they were being optimistic, what they would say is that the design will speak for itself, that that it will be experienced as achieving these goals, whether the client has communicated that is the goal. Is a different question.
Rochelle Dreyfuss 1:01:42
I'm sorry to interrupt you, or you said two kinds of confusion. No,
Margaret Chon 1:01:46
that's okay. So that's one kind the opacity of the information represented by the certification mark. The second would be that when there's a proliferation of marks, for example, when there was that schism between Fair Trade International and fair trade USA, or there the consumer it was because there was a difference in the standards, right? So then we have two different marks, actually, many, many, more than two representing fair trade, and the consumer doesn't, necessarily, isn't able to differentiate among that, this huge proliferation of different meanings. So that's the second type of confusion.
Rochelle Dreyfuss 1:02:20
So has anybody started a website that tells them what's what?
Margaret Chon 1:02:23
You know, there's there are a few websites like the Environmental Working Group will actually delve into standards pretty deeply. So there are some nonprofits out there that specialize in sort of make doing that work for the consumer, and making that more transparent, and therefore the consumer can compare and contrast. So if you want sort of, you know, a reef friendly sunscreen, or, you know, sunscreen that does certain kinds of things, you can go to that website and figure that out
Rochelle Dreyfuss 1:02:53
people have comments on each other's or open it up for questions
Jessica Silbey 1:02:59
here from the audience. Pat,
Rochelle Dreyfuss 1:03:08
so is somebody getting the microphone over there?
Patricia A. Martone 1:03:30
It is this, and I'm just passing the recent cake case, which I don't agree with you about how good it was, since it didn't give us any test at all, is your concern? Is your concern that somehow, for example, with Apple replacing a battery on my iPhone, that they have gotten a design patent on a tool, and if someone else uses the tool that will violate their design patent? Is that the concern? Or is it
Aaron Perzanowski 1:04:00
something else? It's not so much the tools that I'm concerned about, but the component parts themselves, right? A car company goes out and they get a design patent on the design of a Fender or a bumper. And you know, if you talk to most people, their their interest in a replacement fender goes down considerably if it doesn't match the other components of the vehicle, right? So I think there are a couple of problems going on there. One is the basic problem of allowing design patents on component parts in the first place, right? And I think they're they're good arguments that that is kind of not in keeping with the tradition, the history of design patents and kind of what we mean by an article of manufacture. The other problem is it's just too easy to get a design patent. You have $5,000 here's a design patent. It's not a particularly rigorous process, but. I'm with you that like, I would like to see a replacement test, rather than, rather than the court just being like, well, we don't
Patricia A. Martone 1:05:07
like this one. Figure it out where we are at the moment,
Aaron Perzanowski 1:05:11
for sure, right? But I'm not a particularly optimistic person, as you may have gathered, but, but I do think that having no test with the possibility of a better test is an improvement over where we were before, right?
Jessica Silbey 1:05:27
Can I just add I think the designers that we've been studying would agree that overall configuration patents make more sense, and part configurations make absolutely no sense to
Patricia A. Martone 1:05:39
them. But, but if I, if I by and have Having done this, if I decide to have my fender in place, let's say I might BMW, but I don't go to BMW. I go to a private shop. Aren't they going to necessarily put in a BMW part anyway? Because that's the only thing that will fit on the car, right?
Aaron Perzanowski 1:05:59
So I think that's the problem, right? I mean, what lkq wants to do is make much more cost effective replacement parts that are not going to be, you know, easy to tell any difference from the kind of consumer perspective, but manufacturers are using these design patents to control the market for replacement components, replacement parts, which is part of the reason that, like costs of auto repairs have gone up something like 60% over the last two decades,
Jessica Silbey 1:06:31
and putting small shop repair shops out of business who can't afford to do those or don't get licensed. Thanks.
Speaker 2 1:06:42
I A question that maybe intersects with Aaron and Jessica. So the designers you spoke to, did they think about repair in a sense of I would assume those designers weren't worried about capturing the secondary market, et cetera. But I also wonder sometimes that designers might not think about repair because they would really like the design to be elegant and useful, and it turns out repair just doesn't fit that way. So I'd be interested to know. And then that kind of loops back into my question for Aaron, and that is, how do you deviate? How do you kind of whittle away those designs where there's no right to there's no repair possibilities because the design is optimal, not because I'm trying to kind of evergreen, kind of going forward.
Jessica Silbey 1:07:28
So the folks who designed medical devices and cars did think about repair. They cared about easy and accessible repair to maintain the integrity of the design. And I think their clients cared about that too, for sure, but what they focused more on when we were talking about the metrics, is durability. They didn't want the thing to break in the first place. They really wanted it to last, and that was one of the things that they were focusing on.
Aaron Perzanowski 1:07:58
So, yeah, so I do think there's often a trade off between repairability and durability, and I think, I think we have to acknowledge that, not that those two things can never be reconciled, but sometimes there are there. You know, are choices that we inevitably have to make when designing a product. I How do we prioritize, or how do we convince people in these industries to prioritize repairability? Sometimes the market does that for us, right? If you're selling a car, the value of a car, and consumers are very well aware of this, right depends in part on its ability to be repaired, both for you as the primary purchaser, but also it's, you know, it's residual value in the secondary market. The question there isn't whether it's designed for repair, it's a question of who gets to do the repairs, right? So what other kind of restrictions are we layering on that would steer repair to dealers rather than independent shops. For example, the other thing that I think we have to take seriously is the possibility of like, relatively direct regulatory intervention in design of products. One thing that's been on the table in Europe for a while is mandating user replaceable batteries on consumer electronics. You know, Apple has some of the best industrial designers, product designers on the planet. If they were required by law to make a really beautiful, elegant iPhone that I could swap the battery out of with my thumb, the way I used to with my Motorola Razor, I'm pretty confident they could do it. Are they going to do it if they aren't forced to? I'm doubtful, right? We've already seen this work on a small scale, right? Why does every iPhone now have a USB C port instead of a lightning port? Because regulators in Europe told them they had
Rochelle Dreyfuss 1:09:56
to the top down, bottom up. Question, I think, is just a really, really interesting. One, yeah. Lisa, did you want to ask
Speaker 3 1:10:03
your question? Yes. Thank you. My question is, I believe for Margaret, were you the one talking about certification? Okay, so I wanted to know how the this administration is rolling back a lot of the climate change initiatives, the sustainability initiatives. We see this pretty much every day, and we were already lagging behind the EU we were lagging behind Asia. And so with this, you were saying that certification transforms markets, which it does. We know that for a fact. So my question is, how are these individual agencies going to keep up with the times and continue to push the sustainability forward, even though funds are being cut and targeted often and just eliminated in other in other instances. So how does the market? How do you suppose the market's going to keep place, keep pace? Excuse me, with the certification, and how do you think that's going to be challenged with the administration?
Margaret Chon 1:11:02
Yeah, thank you for that question. So with regard to the LEED certification, which I spent the least amount of time on, but that's the building certification, that that was the, one of the three recognizable certifications that I think is more deeply integrated, and the good news is, is that it's integrated into the legal or regulatory structure, both at the federal level as well as in the local levels, right? So we're talking about not just states, but municipalities or counties that have certain aspects of their codes that require a certain amount of LEED certified buildings, right? And so I think that kind of decentralization is actually a strategy and approach that people are talking more about in the in the wake of the current administration's rollback of multiple different kinds of things, not just environmental standards, but other kinds of standards, such as civil rights or whatever, that more power to the local jurisdictions, whether we're talking about state level or others, might be a way to circumvent, or at least push back against that federal power.
Speaker 4 1:12:09
Could the panel comment if there's any legislative efforts around reducing electronic obsolescence by forcing particularly the big players to continue software support. You mentioned Microsoft Windows 10. I have a nest thermostat that's Google, eight years old, and they said no more functionality come November one. So they they're just forcing and they actually contract, you know, they know exactly which thermostat it is in the house. And it's kind of shocking that a big corporation would really just do this to jive up the sales have this huge environmental footprint, and as a consumer, there's absolutely nothing you can do that. It will no longer work when they stop software support. So you can comment on that.
Aaron Perzanowski 1:12:54
I don't know of any legislation that's been passed. I know there's a model bill that Consumers Union and some other organizations have put together just in the last few months, that they're hoping to build support around, and largely what they're pushing for is upfront transparency from companies. Right? How long are you going to support this particular device communicate that to consumers before the purchase, so they don't kind of have the rug pulled out from underneath of them. I think there's also been some conversation about, like, setting some kind of baseline expectations for what a reasonable period of support is. I mean, do we expect, you know, Apple to keep supporting the Newton today? Probably not. And so, you know, kind of calibrating what the right period of time is, I think, is going to be a kind of device by device issue, but at the very least having some, you know, clear representation is, I think, a good first
Rochelle Dreyfuss 1:13:58
step. Does Europe have anything on this?
Anna Tischner 1:14:01
I wanted to add something really to the former question is former intervention. So I think that in the context of circular design, which is mandated in Europe in a top down level method, what is needed is consideration of incentives to foster this socially desirable creativity and innovation in the form of market exclusivity, but also a strategy for the rapid dissemination of circular design. So, as Nancy mentioned, and I think this is something we should consider, is the balance between access and incentive, which requires our reconsideration in the context of IP protection. So we should
Rochelle Dreyfuss 1:14:51
IP story right a delicate balance between access and incentives. And with that, please join me in thanking the panel. Applause.
Speaker 5 1:15:10
The engelberg center. Live podcast is a production of the engelberg center on innovation Law and Policy at NYU Law, and is released under a Creative Commons Attribution, 4.0 International license. Our theme music is by Jessica Batke and is licensed under a Creative Commons Attribution, 4.0 International license.