Morgan Stephens

INTELLECTUAL PROPERTY OUTLINEFALL 2009

MYERS

IP and The Constitution- Article I, § 8- The Intellectual Property ClauseI. Patents and Copyrights

a. “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”

i. Science refers to knowledge / authors and writings apply to scienceii. Useful arts refers to technology / inventors and discoveries applies to

discoveries b. Purpose- “to promote the progress of science and useful arts”- this creates some

benefit and, hopefully, improvement of the public welfareII. What power does this give to Congress

a. The power to give exclusive rights to people qualifying as authors and inventorsb. Note- Trademarks are granted under the Commerce clause, not the IP clausec. State law can also govern copyright and patent

III. So why do we protect/secure patents in our Constitution?a. Public good/economic justification (The Incentive View)- Inventors right to

exclude to make a profit after recouping research losses, but we don’t want perpetual right to exclude…this is where “limited times” clause comes in.

i. At the end of the “limited time”, generic products enter the market (think of prescription drugs) and drive prices down

ii. This amply rewards inventors and authors, encouraging more development, while at the same time providing benefits of inventions and works of authorship to public (i.e. balance of interests)

b. Natural Rights – John Locke’s theory that each person is entitled to the fruits of his labor. Think of the Ansel Adams photograph.

i. Not much support from the Constitution, but does appear in some IP lawsii. Patent expiration doesn’t fit under this view of IP law

iii. This theory believes in longer/stronger protection iv. There is an increasing trend in the U.S. because of the international

influence of Natural Rights, so we are moving closer to this.c. Disclosure Theory- without any incentive, you might be tempted to hide your

invention. This fits in with both of the aforementioned reasons for IP law.IV. General Information in IP

a. Considerations in Every IP issuei. Type- what type of right is in question

ii. Validity- is there an enforceable right? Does the item in question have the right characteristics under patent, copyright, or trademark to deserve protection?

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iii. Ownership- how many entities are making use of the trademark, and who gets the right. Whose ownership claim is superior?

iv. Infringement- Was the right infringed upon?v. Defenses- determining whether an infringing actor has a valid defense to

justify the infringement against a valid owner of IP.vi. Remedies- what relief is available to the plaintiff? (e.g. money, damages,

injunctions)b. Balancing of interests- IP law must try to balance the reward/incentive of the

creator with the public’s interest in gaining access to the information otherwise protected. The inventor gets a legal monopoly or exclusive right, but at some point the idea(s) fall into the public domain.

Trademark Law

OverviewI. Trademark Law

a. Origins-Artisans and craftsmen formed guilds and applied symbols to their products to signify the identity of their makers. The common law provided protection for the trademarks through actions for deceit.

i. “Palming off”- eventually, English/American common law slowly developed an offshoot of the tort of fraud and deceit called “passing off” or “palming off”. Simply stated, this occurs when one passes his goods off as the goods of another. Therefore, the law eventually began to recognize the “good will” developed by the artisan’s brand, allowing them to prevent another from unjustly enriching from his brand

ii. Restatement definition of Palming Off- “one is subject to liability of another… if, in connection with the marketing of goods or services, the actor makes a representation likely to deceive or mislead prospective purchasers by causing the mistaken belief that the actor’s business is the business of the other, or that the actor is the agent , affiliate, or associate of the other, or that the goods or services that the actor markets are produced, sponsored, or approved by the other”

b. Goals of trademarks and Reasons for protections:i. Protect the goodwill that the owner has developed by consistently

producing a good productii. To prevent the consumer from being confused or deceived about the origin

of the goodsiii. Unjust enrichment- tied closely to good will

Warner v. Eli Lilly (U.S. 1924)o Π Lilly made a product called Coco-Quinine for 50 years, and then Δ Warner

came out with something called Quin-Coco, which was chemically the same product, which Δ sold for less.

o Supreme Court does not go along with Π’s infringement charge because the names are generic descriptors essentially.

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o The concern is that druggists are filling orders of Π’s product, but they are instead using Δ’s cheaper, but basically identical product.

This clearly harms Π, and there is also a consumer confusion element.o The Court concludes that Π cannot enjoin Δ from making the product, but it

can prevent the intentional defrauding of consumers by substitution of products.

o Trademark Law is the solution…the truthful branding of the product. State law Unfair Competition claim Patent law gives no remedy because there is nothing being “invented”. This is a “palming off” case – representing someone else’s products as

one’s one. Common law tort action.

II. 4 Types of Trademarksa. Brandb. Service markc. Certification markd. Collective mark

Trademark RightsI. Spectrum of Distinctiveness [Abercrombie & Fitch v. Hunting World (1976)]-

a. Generic - a term that “refers, or has come to be understood as referring, to the genus of which the particular product is a species”

i. In other words, the public associates the mark with all products of that kind, regardless of the name brand who produces it

ii. NO protection under trademark lawiii. So how do you protect from becoming generic?

1. Have name for product separate from the brand name2. Try to develop good will in other markets (e.g. Nike)3. Enforce your right- sue infringers4. Require media to use the ®

o King-Seely Thermos v. Aladdin Industries (2nd 1963) Π King Sealy made thermos for years. Π wanted the court to enjoin Δ

from marketing a product called thermos. Π wanted Δ to use the term “vacuum insulated bottle”, argued that Π had developed and marketed the word to the point where the word has become generic.

The Court agreed that thermos has become a generic consumer term so Δ couldn’t be completely enjoined. However, the Δ had to put its name on their thermos to avoid confusion

Π was basically too success in its marketing. Note 3: Aspirin and Tabasco are other examples of brands

becoming the generic term for the product, no matter the producer.

Abercrombie & Fitch v. Hunting World (2nd Cir., 1976)

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o Case concerns use of the term “safari” to describe and identify articles of clothing. Π claimed Δ had infringed on its use of “safari” to describe clothing.

o Court ruled “safari” was generic with regards to some clothing (e.g. hats) and suggestive, or merely descriptive, with regards to other articles (e.g., boots)

b. Descriptive - a term /phrase that explains a quality of the product (e.g. “Deep bowl spoon”; “Bubbling Champagne”; surnames)

i. Not protected, but can be upon proof of secondary meaning (see below)ii. Secondary meaning- the descriptive term has been come to recognize the

product as that of a particular producer. The name has been used so much that customers recognize it.

c. Suggestive - terms that have some association with the underlying product or service, but requires some imagination to see the connection (e.g. “gobble, gobble turkey meat”; “chicken of the sea”)

i. More clever than a descriptive markii. Protected under trademark law

d. Fanciful/Arbitrary - greatest amount of mark protectioni. Arbitrary - the use of an existing word to describe the product in which no

connection is recognizable (e.g. Arm & Hammer baking soda; Camel Cigarettes, Apple Computer)

1. Great protection because there is no reason for a competitor to use the mark

2. Term would become generic if it was associated with the product it sold (e.g. Apple Fruit; Camel Desert transportation)

ii. Fanciful - the creation of a new word to explain your product3. Great protection4. Example- Kodak, FedEx, Exxon

Generic Descriptive Suggestive Arbitrary or Fanciful

ThermosSafari hat

Safari boot (trait)Steak and Ale Restaurant

CitibankAt-A-Glance

KodakExxon

Not Protected Somewhat Protected Protected Protected (Strongest)

II. Secondary meaning of descriptive terms [IKC v. Mighty Star]a. Protected if the plaintiff can show that the descriptive/generic term has developed

a secondary meaning. The test comes down to how consumers perceive the product.

b. Testi. Amount and manner of advertising

ii. Volume of sales

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iii. Length and manner of useiv. Direct consumer testimonyv. Consumer surveys

c. What about Geographical terms? Clearly, descriptive, so in order to be protected, the owner must show secondary meaning. Think of Oxford Steak Company.

Inter. Kennel Club of Chicago v. Mighty Star (7th Cir., 1988)o Facts – Δ puts out a line of plush toys under the name International Kennel

Club. Π IKC doesn’t produce any similar products, but it does exist and is a prominent name in dog circles. Π began receiving calls and letters asking if Π was getting into the plush toy business. Some of these letters came from vendors (potential competition) who set up at Π’s shows and were pissed that IKC appeared to be getting into the plush toy business.

o IKC had developed its name as a Secondary Meaning. As IKC is clearly a “descriptive mark” which has developed a secondary meaning as the specific organization that is the Π in this case.

Trademark owners do not have to be a gigantic company, you just need a favorable balance of these 5 factors to determine if there is a secondary meaning available for Descriptive marks.

o Why wouldn’t a disclaimer work? Why did the court of appeals uphold the injunction and award money damages for the products already in production.

The Trial court believed the evidence showed that a disclaimer would not be sufficiently protective of Π’s trademark rights

III. Surnames [Findlay v. Findlay]a. Old View- the Sacred right theory- had the right to use name any way you

wanted; this was largely limited b/c it had the potential of creating immense consumer confusion

b. Treated the same as everything else- names considered descriptive terms; so proof of secondary meaning is necessary

c. The case also looked at:i. Good will developed in area

ii. Consumer confusioniii. Unfair competition

David B. Findlay v. Findlayo Facts: Brothers inherited art gallery from dad. Brothers had a spat and split

the company. David operated a gallery in New York, and Wally operated a gallery in Miami. Wally then tried to open up a gallery in New York almost next door to David’s gallery which had been operating at the location for years. Both brothers are selling the same kinds of art.

o Normally, there is a general rule that a person may use its name to sell its own products, and this use of name is protected by IP law so long as it has a secondary mean, as surnames fall under Descriptive marks.

o However, here, there is a significant problem because great consumer confusion will result, and potential injury to David (already established) if Wally uses his own name in such close proximity to David.

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o The Court says Wally can stay, if it uses a different name, or it can move further way and use the family name Findlay.

Sullivan v. Ed Sullivan Radio and TV Showo Court grants Ed’s injunction against Sullivan, who was operating a TV repair

shop under the name Ed Sullivan Radio and TV shop. o The Court determined that there was great potential for consumer confusion

with that exact name. The Court said he could go with just “Sullivan” or “Edward Sullivan” and be okay, but “Ed Sullivan” violates the famous guy’s trademark.

o If the famous Ed had not acted so quickly, he may have been estopped later if the infringement grew out of control as having acquiesced to the infringement

IV. Colors, Sounds, Scents, and Other Marksa. Color [Qualitex v. Jacobson]- the Supreme Ct. has held that color can be a valid

trademarki. Doctrine of Functionality- if the feature (i.e. color) is functional, it cannot

be trademarked. So in this case, if the color is not involved in the functionality of the product, then it is not per se excluded from potential trademarks.

1. How do you determine if a feature is functional?a. “in general terms, a product feature is functional, and

cannot serve as a trademark, if it is essential to the use of purpose of the article or it affects the cost or quality of the article

b. Think of the monopoly- would the exclusive use of the feature put competitors at a significant non-reputation related disadvantage

2. Makes functional features identical to generic marks; both result from a desire to encourage fair competition

ii. Aesthetic Functionality- serves some consumer preference for a color to be associated with a product (e.g. blue=water). With this, no producer gets an exclusive right to that color; anything that serves as a source indicator for a consumer would qualify. Even though it is not functional, can be a trademark (e.g. ABC’s three chimes, Mrs. Butterworth Bottle)

Qualitex v. Jacobson Productso Facts: Π registered the color green-gold as a trademark for its brand of

dry cleaning press pads. Π sued Δ for violation of its color trademark.o U.S. Supreme Court held that color of a product can be a valid,

protectable trademark.o Color of press pads doesn’t matter, so it’s not excluded; whereas, color

of a chalk board probably couldn’t be trademarked because there is a very limited range of colors that work for a chalk board. Same thing for camo gear.

b. Scent [In re Clark] - case on scented yarn.i. Uses the Functionality doctrine stated above; so if the scent is not

functional, the owner can trademark it.

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ii. So, in this case, the yarn owner could trademark the scent for her yarn; BUT, if she sold air freshener, she could not trademark b/c it would be functional

In re Clarko Facts: Owner of company wants a trademark on her floral scented

sewing thread. She claims she is the only one in the business with scented thread, and her trademark request is for her particular floral scent, which is similar to “Plumeria”. The Trademark Appeals Board held that scent is like color, in that if the scent is not functionally related to the product, thus scents are not precluded from trademarks

V. Marks Precluded From Registration in Trademark Law- See the Lanham Acta. Scandalous Marks

i. The trademark statute precludes the registration of scandalous trademarks. The user, however, is not precluded from using the mark due to the 1st amendment.o In re Old Glory Condom Corp.

Condom company wanted to use the American flag to serve as its trademark. The examining attorney denied the trademark because she thought it would be “scandalous” in violation of the Lanham Act.

The appeals board reversed, concluding that the general population would not find the trademark scandalous. Poll taken determined that less than 5% of the population would be offended by the trademark. Also, using dictionary definitions, the board didn’t believe the condoms were scandalous considering their AIDS awareness concerns.

ii. § 1052(a) - The statute allows a trademark if it helps distinguish one’s product from another unless it’s immoral, deceptive, scandalous, or disparaging.

iii. § 1052(b) - No protection when using the flag or official symbols of governments.

1. The condom case was distinguished above because the flag was stylized and not a depicture of an actual flag

iv. The statute allows a trademark if it helps distinguish one’s product from another unless it’s immoral, deceptive, scandalous, or disparaging.

v. How do you determine if it’s offensive:1. Will be precluded from registration of trademark if a reasonable

person would find the mark to be vulgar or offensive2. Can still use, just no government protection

Washington Redskins Case- o Was the trademark of “redskins” sufficiently offensive to be

deemed scandalous? Survey- showed people were offended by it

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o Doctrine of laches- may play role in case; if you sit on your rights w/o challenging, people may detrimentally rely on your failure to assert property rights, thus precluding you from suit

o Even if the Redskins lost? They could still use the mark, just couldn’t prevent others from using it.

b. Confusingly similar i. Can’t use a mark that’s confusingly similar to a previously registered

trademarkc. Descriptive marks

i. Can’t register a descriptive trademark unless there is secondary meaning. NOTE: If you’ve used the mark for 5 years, there is a presumption of secondary meaning.

d. Misdescriptive Marks [In re Budge]i. A mark which includes deceptive matter is barred from registration,

despite any disclaimers that may be present.1. 3 Part Test used in case:

a. Is the term misdescriptive of the character, quality, function, composition, or use of the goods? (I.e. is it misdescriptive as applied to the good?)

b. If so, are prospective purchasers likely to believe the misrepresentation actually describes the good?

c. If so, will the misdescription materially affect a potential purchaser’s decision to buy the goods?

ii. All three must be met to deny registration.o In re Budge Manufacturing

Facts: Seat cover maker had a product called Lovee Lamb, which was not made out of animal skin but instead was synthetic fibers. The issue is whether there is sufficient deception to deny its trademark request. Court ruled it was deceptive, and barred registration.

e. § 1052(c) Image or signature of a living person- no protection for use of image or signature of living person, and no using dead presidents while widow is alive.

f. § 1052(e) Geographic/Geographic/Surname marks- No protection for descriptive/geographic/surname marks…unless (f) is satisfied, which requires the “secondary meaning” as discussed above. But the secondary meaning doctrine only applies to those.

g. If not excluded by § 1052, then you are eligible for trademarks in the General Register and get all the rights that go along with it.

VI. Service Marks [In re Dr. Pepper]a. A mark used in the sale or advertising of services to identify and distinguish the

services of one person from the services of another so as to indicate the source of that service.

b. Treated the same as trademarks- so you can register a trademark for both goods and services (called a service mark). But, you must have a bona fide service.

In re Dr Pepper Co. -

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o Used “Pepper Man” for promotions - The Court denied the service mark because Dr. Pepper was not engaged in a “bona fide” line of business involving the mark. Since DP was not in the business of running contests and promotions, DP couldn’t get a service mark for Pepper Man.

c. § 1053- if you have a business operating in service industry, you’re treated the same was as a business that sells goods (i.e. businesses under trademark law)

VII. Certification and Collective Marksa. Certification mark - mark used upon or in connection with the products or services

of one or more persons other than the owner of the mark to certify regional or other origin, material, mode of manufacturing, quality, accuracy or other characteristics of such goods or services.

i. Can work to certify the goods of a third party (but cannot act at the same time as a trademark

ii. Can certify either goods or services and show membership in a particular group or association (collective group)

Midwest Plastic v. Underwriters Laboratorieso Π wants to revoke Δ UL’s certification mark, claiming that UL did not

have control over its certification marks.o The court held that UL had reasonable control over its certification

marks and that total control was not required.o Also, the court held that UL was not using its mark for purposes other

than to certify. Had the mark been used both as a trademark and a certification,

the certification would be invalid.b. Collective Mark - membership in a cooperative or collective group that allows its

members to bear its mark Think PGA Tour

Trademark OwnershipI. Common Law Trademark Use- who gets the ownership rights of a trademark?

a. Potential owner of a trademark must take steps to establish ownershipi. CL still very important, especially when no party has registered mark

under Lanham Act, b/c then CL controls who has rights to mark Galt House v. Home Supply Co.-

o Company asserting trademark had not engaged in business yet, but had sat on the trademark for approximately 5-7 years. The Court held that Π had not done anything with his mark, so Unfair Competition law prohibits him from excluding others from using this name. Court also says certain acts on their own (e.g. incorporation, making websites, getting telephones) is not enough to establish ownership.

ii. In order to gain all possible rights, owner should:1. incorporate2. fulfill Lanham requirements3. register both websites and telephone numbers4. register under state trademark law

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iii. Lanham Act- allows the potential owner of a trademark a reasonable period to develop the mark, but if you sit on the rights, you’re precluded from asserting rights. How do you register the mark under Lanham?

1. Use in commerce- ownership of a trademark accrues when goods bearing the mark are placed in the market (bona fide use).

a. [Blue Bell v. Farrah] - even the timing of the first shipment of goods can effect who gets the mark’s ownership. Shows you must look at facts to determine who owns

b. [Galt House]- b/c plaintiff failed to use the name, he never put the goods “in commerce”, so he didn’t receive protection

Blue Bell v. Farah Manufacturingo Two competitors used identical marks to identify their clothing lines.

There was no indication of bad faith on either party. Neither party registered their mark according to the Lanham Act, so Texas trademark law controlled, which required the court to look at which party was the first to “use” the mark.

o Problems with both companies efforts before Sept. The Court concluded that internal sells do not count as a use.

Use only occurs when products are marketed and sold directly to consumers. So Farah’s internal sells to its regional sells people was no good.

The Court also concluded that Blue Bell’s putting the new mark on products that were previously marked and ordered under another trade name does not satisfy “use” and does not establish common law rights.

o Because Farah made an actual bona fide shipment on Sept., and Blue Bell’s was not until Oct, the court awarded Farah the rights to the disputed mark.

o The Court had to pick a winner to avoid consumer confusion and protect the first party to use the mark. Someone has to win.2. File an intent to use application- announces to everyone that you’re

asserting your rights to the name. This gives notice that you intend to use it, so you need to get in the market and do so. The ITU is good b/c it gives you some protection before actual production/distribution begins. Process:

a. File applicationb. Get 6 month “notice of allowance” to establish use (for

good cause, can receive up to 2 years)c. When you begin use, file “statement of use” with the PTO

b. Definition of used: “a mark is used when it is affixed to the goods and the goods are sold, displayed for sale, or otherwise publicly distributed.” (Texas statute)

II. Statutory Rightsa. Good Faith Prior User/Limited Area Exception [Thrifty Rent-a-Car v. Thrift Cars]

- shows problem with only registering name in the state if a large corporation with

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the same name registered federally moves in. The federal registration is more protective. The court allowed the junior user continued use, but under several exceptions (frozen to the area)

i. Local area exception- the junior user is protected despite the federal trademarks dominance so long as the use was established prior to the other’s federal registration.

ii. To qualify for Limited area exception, must have:1. Operation before the other in good faith2. Legitimate business activity3. Continuous pre-registration use

iii. But, before you do any of this, you should first complete a trademark search. The test used to determine is the likelihood of confusion in terms of consumer minds test.o Thrifty Rent-a-Car (senior) v. Thrift Cars (junior)

Senior began business in 1958 before junior. Junior only operated in a limited geographic area beginning in 1962. After junior established business, senior registered under Lanham in 1964.

1964 is the key date; it freezes further activity and expansion by junior. Had junior opened up in 1965, it would not have had any geographic rights.

Note 2 – similar facts to main case involving Burger King, but here the junior has registered with Ill. state trademark commission prior to senior’s federal registration. Federal law, however, trumps state statutory trademark, so the outcome is exactly the same. Junior only gets to keep its very localized operation. State law registration did not make any difference.

b. Why register federally? i. Constructive notice- most important benefit b/c you place everyone in the

country on notice; you have nationwide preemptive rights, b/c when you register federally, there’s a presumption that you plan to expand nationally. So all state laws are trumped. There is an exception for a “good faith user without prior knowledge.” To invoke this exemption, must show:

1. Prior use to other’s federal registration2. Mark was continuously used

If you do receive the exception, you are frozen to that particular area

ii. Incontestability- eliminates the issue of who is trademark owner and whether it’s a valid mark. This status is received if you’ve used the mark w/o challenge for 5 years. To receive the status, you must file an application with the PTO within 1 year of the 5th year (i.e. in b/t years 5 and 6). However, the mark can still be challenged on the following grounds:

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1. Obtained fraudulently, mark abandoned, fair use defense, limited area exception, registered and prior user, antitrust,

2. Generic or abandoned are good challenges3. Note- cant challenge descriptive marks, b/c once you have

incontestability secondary meaning is presumed. Park ‘N Fly v. Dollar Park and Fly

o Π has an incontestible mark and is trying to enjoin Δ from using its name.

o tried to claim that ’s mark was merely descriptiveo b/c mark was incontestable, defense was not applicable;

incontestability was conclusive evidence of secondary meaningiii. Prima Facie validity of mark- you are presumed to be the owner of the

mark and the mark is presumed valid, whether it’s incontestable or not.iv. Certain rights- rights prevent the importation of infringing goodsv. Enhanced remedies

vi. It’s only $325 dollars to garner all these benefitsc. § 1051 Intent-to-Use application window

i. ordinary way to proceed, for federal purposes, requires that mark be “used in commerce”

ii. “Intent to use” (ITU) provision doesn’t require you to be currently using the trademark, only that you have bonafide intent to do so.

iii. Filing “intent to use” application1. givers 6 months to show you’re using the trademark2. for good cause, can get a 6-month extension and then another year

extension, for up to two year window, but can’t “reserve” the mark3. when you begin to use, inform the PTO

Kodak v. B&H B&H was putting out intent to use application for trademark on

a couple of numbers; giving it 6 months to actually use the trademark

Kodak claims that numbers B&H was trying to trademark were descriptive and had no secondary meanings

Court said that Kodak did the right thing, but that at this point of process, there was presumption that numbers would overcome status as descriptive terms

Dismissed case with without prejudice, so Kodak could file again later

Requirement for good faith prevents abuseiv. Will typically get issue from client in one of two situations

1. client is sophisticated, has not put product on the market, has trademark in mind and wants to secure rights before hand; “Intent to use” is good avenue

a. before filing ITU, want to do a trademark searchb. go to OPT website and use search engine; search engine is

complicated though

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c. if client has money, there are companies that specialize in trademark searches

2. Client is already using trademark, but hasn’t trademarked itv. Once filed application to register trademark, notice will be published, and

if nobody objects, will be registered1. Three possible pitfalls

a. Trademark application is rejected by OTPb. Trademark is objected to by other personc. Trademark is challenged for cancellation after registration

2. These conflicts are heard by TTAB, which stands for Trademark Trial and Appeal Board

Trademark InfringementI. The Likelihood of Confusion Standard

a. Test- an appreciable number of ordinarily prudent purchasers are likely to be misled or simply confused as to the source, sponsorship, or affiliation of defendant’s goods or services [CBS v. Leiderman]

b. Polaroid 8 Factor Test: i. Strength of the mark - look at the degree the mark is inherently distinctive

(spectrum of distinctiveness) and at secondary meaningii. Similarity - degree of similarity b/t the two marks. The test is to “assess

the overall impression” [Foxworthy]iii. Proximity - product proximity of the marksiv. Bridging - likelihood that the senior user will bridge the gapv. Actual Confusion - evidence of actual confusion needed; surveys,

testimonyvi. Bad Faith of Junior User - on behalf of the junior user

vii. Quality of the Junior User’s Mark viii. Consumer Sophistication

CBS v. Liedermano Π CBS is trying to enjoy Δ from opening a restaurant in NY called

“Television City”. Π has a studio called Television City out in LA.o Balancing Test for Confusion Test –8 part Test.

Strength of the Mark Strong in its field, but limited to television production, so kind of a plus for Π.

Similarity of the Marks Essentially identical, so plus for Π Proximity Plus for Δ because of no real overlap based on

difference of industries and geographic distance. Bridging the Gap – Π has not really attempted to enter the food

business, so there won’t be any competition between Π and Δ, so plus for Δ.

Actual Confusion Plus for Δ because the restaurant hasn’t opened yet

Junior User’s Bad Faith Plus for Δ because no evidence of bad faith.

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Quality of Junior User’s Product plus for Δ because there is every indication that Δ will operate a first-class restaurant.

Sophistication of the Consumers Neutral – ordinary sophistication.

o Judgment call, but Δ was, and probably should have been, the winner. Foxworthy v. Custom Tees

o Custom tee using slight variation of Foxworthy’s “you might be a redneck”

o All the factors of the balancing test weighed in Foxworthy’s favor.o Note with Nissan Case, where Mr. Nissan had website.

Pretty boarder line case, until Mr. Nissan began allowing car companies to advertise on his website.

II. Dilution a. The idea that one trademark might dilute the other or reduce its

distinctiveness/uniqueness. The case defines it as “either the blurring of a mark’s product identification or the tarnishment of the affirmative associations a mark has come to convey.” The purpose is to prevent “the whittling away of an established trademark’s selling power and value through its unauthorized use by others upon dissimilar products.” Likelihood of dilution is not that dissimilar from the likelihood of consumer confusion. There is a difference, though. It seems like the test is focused more on the economic effects of the dilution.

b. Consumer confusion does not suffice when the parties are in different markets, so look to dilution.

c. Categories of injury:i. Tarnishment- of business reputation

ii. Blurring (i.e. distinctiveness)- the relationship b/t the senior mark owner and its mark (e.g. Mead claims that lexis will no longer be synonymous with its search engine if Lexus is allowed to continue naming cars)

d. Elements of a claim:i. Famous - The mark is famous

ii. Causality - The other mark must causeiii. Dilution iv. Of the distinctive mark v. In a commercial setting

Mead Data Central (Lexis) v. Toyota Motor Sales (Lexus)o Π owns Lexis. Δ manufactures cars. Π sues to enjoin D’s use under

the state dilution statute.o Mead lost b/c their Lexis is used only w/ attorneys/accountants, thus

the different markets of the two mark holders made the distinction less. In other words, the two marks can coexist w/o any major confusion

e. Lanham Act- requires “actual dilution of the distinctive quality of the mark”i. Likelihood of harm is not enough

ii. Lanham does not mention tarnishment 1. Tarnishment is alive and well under state dilution law. Ex. Adults-

R-Us tarnishes Toys-R-Us

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iii. Mental association in the minds of consumers is not enough to prove dilution

1. Mental association does not reduce the capacity of the famous mark to identify its owner.

f. How do you proof actual dilution under the Lanham act? i. Actual loss of sales- Proving loss of sales is not necessary, but it may be

one way to show “actual dilution”ii. Survey- if done correctly is probably a very good way to show “actual

dilution”.iii. Identical marks- Nearly identical marks also bolster a dilution claim.iv. Circumstantial evidence

Moseley v. Victoria’s Secret (case in supplement)o Facts: Π sued to enjoin Moseley from opening a store called “Victor’s

Secret” claiming the junior mark would create confusion and dilute the distinctiveness of the mark. Moseley changed the name to Victor’s Little Secret to try to make a distinction.

o District Court (CA 6th affirmed) gave summary judgment to Mosley because “no confusion exists as a matter of law”. The U.S. Supreme Court reverses for more fact finding.

v. See pages 217-219 for examples of Dilution caseg. Infringement analysis in Parody cases- look at facts to determine likelihood of

confusion, and uses a very similar test. The court laid out several factors to consider:

i. Strength of the markii. Similarity b/t the two marks

iii. Competitive proximity of the product in which the marks are placediv. Intent of infringer to pass off goods as those of senior holderv. Incidents of actual confusion

vi. Degree of care likely to be exercised by customers of the trademark holder Mutual of Omaha Insurance v. Novak

o Novak makes parody T-shirts, taking the Mutual design and twisting it into the “Mutant of Omaha”.

o Mutual used a survey where the District Court believed enough people though that Mutual was “going along” with the message of Novak’s T-shirt.

o The Court determined there was a sufficient likelihood of confusion to enjoin Novak’s use, or rather, the Court held the District Court’s opinion was not clearly erroneous.

Court said both parties produced T-shirts. This is a stretch.

Look at factors in LOC above.o Note Budweiser/Myrtle Beach case (t-shirt used parody of

Budweiser can to make “King of Beaches” T-shirt). The court weighed the facts and came out with a different conclusion.

III. Defensesa. Abandonment, Descriptive use, and Equitable defenses

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i. Abandonment- a mark is abandoned when “its use has been discontinued with intent not to resume such use.”

1. Four ways in which a mark is abandoneda. Non-use with intent not to resume useb. Assignment in gross- can’t license the mark by itself; the

good will of the mark must accompany (see [Quaker]}c. Naked licensing – trademark owner who licenses out the

name without any attempt to control the use or quality of the goods or service.

d. Deliberate action of the trademark, e.g., “we’re given up these trademark.”

2. Restatement definition on page 237 lists first factor above and then generally describes the other three factors, but basically the same

STW Co. v. The Quaker Oats Co. (1993). Whether «THIRST-AID» as used by Gatorade infringers on

STW’s trademark rights. Defense of Abandonment

o Non-use of non-essential part of trademark doesn’t constitute abandonment and there was enough evidence of intent to use to overcome prima facie case for abandonment; so STW wins

When transferring a trademark, be sure to include the phrase: “and all goodwill appurtenant thereto”; satisfied here so STW wins

ii. Generic Marks- always a defense iii. Fair Use

1. Consumer confusion is the primary inquiry, but a defense doesn’t require absolutely 0% confusion

2. Fair Use Defense only applies to Descriptive Terms that are NOT used as an actual trademark.

3. Defense applies primarily to description of the product or the geography origin of the product.

KP v. Lasting Impressions - permanent makeup case. Fair Use Defense

o Dispute is over the use of the mark microcolor/micro colors. KP asserts affirmative defense of “fair use”.

iv. Equitable Defenses1. Consent2. Laches- most common, defendant must prove:

a. plaintiff had knowledge of the defendant’s unauthorized use of confusingly similar mark

b. Plaintiff unreasonable delayed actionc. Defendant was unduly prejudiced as a result of the

defendant’s delay3. Waiver

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4. Estoppel- plaintiff knowingly acquiesced to defendant’s use of the mark- detrimental reliance argument

5. Unclean hands- e.g. trademark owner who made a misrepresentation in his application for use of the mark

b. Comparative Advertising [Channel knock-off case]i. Comparative advertising is Ok so long as a reasonable consumer isn’t

confused as to the origin of the productii. Even though there is free-riding going on, the rule is that the competitor

can make a direct comparison to a competitor as long as everything is truthful.

R.G. Smith v. Chanelo Chanel got prelim injunction against Smith after Smith was using

Chanel’s trademark to advertise its own copycat fragrance. District Court hammers Smith, but the appellate court reverses and allows Smith to continue the advertising as it had.

o Chanel could not get a patent for its fragrance, so it could not use its trademark to exclude Smith from the market.

o The Court held that comparative advertising is fine b/c the consumer wouldn’t be confused as to origin of the product

c. Used or Reconditioned Goods i. Can keep the name of a reworked good so long as it’s not a major rework

of the productii. In other words, you can’t have an essentially/completely different product

labeled as the product of the original maker.1. Protects the name of the primary mark holder from reputation

injury resulting from worthless refurbished products.2. Balancing of the rights of the mark owner with the rights of the

public to purchase cheaper, second-run goods (consumers know what their buying v. reputation of manufacturer)

Champion Spark Plug v. Sanderso Sanders reconditioned Champ spark plugs. The boxes said the

renewing company’s name and Champion. The spark plugs still said “Champion” and very small said “renewed”. Nowhere on the plug was the name Sanders. District court said Sanders must remove all references to Champion’s trademarks.

o Appellate Court and Supreme Court held that Champion did not have to be removed from the outside of the box so long as the consumer would not be confused that the plugs were not 1st class goods made only by Champion.

d. Remediese. Depending on the infringing act, could be

i. Injunction- most commonii. Defendant’s profit/revenues

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iii. Reasonable royalties for use of the mark; how determined? [Quaker]1. Look at similar royalties contracts2. Survey people3. Bring in experts

iv. Compensatory damages- damages sustained by Plaintiffv. Attorney’s fees- court Costs (Usually reserved for bad faith actions)

vi. Other damages- include destruction of fraudulent/counterfeit goods Sands, Taylor, and Woods v. Quaker Oats - Gatorade case continued.

o Damages to award Π for Δ’s infringement.o District Court awards Π 10% of Δ’s revenue occurring during the ad

campaign, which was more than $24.5 million.o Appellate Court reverses hold this to be too much. Instead, the court says

a reasonable royalty should have been awarded. How to determine reasonable royalty.

Look at similar royalty’s contracts to see what is reasonable. Survey people Bring in an expert - either attorney or professor or someone

o Court reverses the District Court and remands. District Court later determined that the award should be about $10 million, which the Circuit court affirmed.

o The appellate court never disturbs the DC’s award of attorney’s fees. Usually attorneys’ fees are reserved for bad faith actions of the

defendant. This seems like a pretty weak case for this type of penalty.

Federal Unfair Competition: § 43(a) of the Lanham Act (Applies mainly in Trademarks)I. Attribution- major change that dramatically alters work or undermines reputation.

This is a broad provision.a. Elements:

i. Alterations (major)ii. Failure to credit; or

iii. Improper credit Choe v. Fordham Law - law review case

o Choe gets a comment published, but he is extremely displeased about the version of his comment that was actually published in the law journal. Court rules for Defendant… why?

o For Plaintiff to have a COA, the defendant must have made it appear he was the author of a work not his own.

o Had the comment been substantially different from what he produced, then he may have had a claim under §43(a): false designation of origin likely to cause confusion of the true origin.

b. 43(a) protects against:i. § 43(a) is a federal unfair competition statute that only applies when

substantially false statements made about goods or services.ii. Dramatic alteration - think Monty Python example. Results in

embarrassment to the author. Name is placed in the credits and harms the credited.

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iii. Flip Side - Name is left out of the credits for a product. Both sides of the coin are actionable under 43(a)

II. Trade Dress- the total image and overall appearance of the business. Court says it’s the “total image of a product and may include such features as size, shape, color, or color combination, texture, graphics, or even particular sales techniques.” (ex. Mrs. Butterworth’s bottle)a. When is Trade Dress protected:

i. Nonfunctional - Trade Dress is not protected if it serves a functional purpose.

1. A feature is functional if it is essential to the use of the product2. Or, anything that improves the operation of the product3. Shows limits of Trademark law- it encompasses everything but the

product itselfAnd

ii. Inherently distinctive a product is inherently distinctive if its intrinsic nature serves to identify a particular source (e.g. Butterworth’s bottle, for the 8th time).

iii. Secondary meaning - same as above, and occurs when “in the minds of the public, the primary significance of a mark is to identify the source of the product rather than the product itself.”

Two Pesos v. Taco Cabanao Taco Cabana claimed to have a protected trade dress protected by the

Lanham act which was violated by Two Pesos.o The Court looked to the total picture of the trade dress: décor, bright

colors, artifacts, employee dress, menu items/presentation, etc, and held that Taco Cabana had an inherently distinctive trade dress, deserving protection by the Lanham Act.

o The Supreme Court analyzed the issue here as if it was a regular trademark dispute. The Court basically considered the entirety of the trade dress as one overarching trademark.

b. Trade Dress does not just apply to the décor of a restaurant. It also applies to the total packaging of all consumer goods. Think of all the packaging involved in a case of beer. The overall appearance is the trade dress protected (potentially) by the Lanham Act.

c. Also, there is strong public policy in favor of protecting Trade Dress for purposes of establishing consumer good will and advertising creativity.

III. Product Configurations (Product design)a. Can’t be treated the same as trade dress

i. Product design is not immediately recognizable as a brand like trade dress (i.e. it’s not inherently distinctive)

ii. So, to win, the plaintiff must show a secondary meaningiii. Can’t be functional

Wal-Mart Stores v. Samara Brothers

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o Wal-Mart gets a clothing manufacturer to take Samara’s clothing designs and create a line for Wal-Mart with only minor changes.

o The SC holds that Samara has not shown an inherently distinctive design and must therefore show secondary meaning here under a trademark “trade dress” claim here.

o Why is the Court not treating this “product configuration” the same as “trade dress”.

The Court compares the design of a product to the issues of colors in the Qualitex case. Colors can be protected, only if the color obtains a secondary meaning in relation to the product. This is a tough burden in the case of colors AND product configurations.

o The Court concludes that product configuration must be non-functional AND cannot be inherently distinctive because it is almost certainly not immediately recognizable by the consuming public.

o Because the product configuration here is not inherently distinctive and because Π has not shown a secondary meaning, then Π’s fails in its prima facie case.

TrafFix Devices v. Marketing Displays, Inc.o MDI at one time had a patent for its two-spring highway sign design, but it

had expired. Upon expiration, MDI’s competitor, TrafFix, reverse engineers MDI’s signs. MDI claims its double spring design is a distinctive design, protectable by the Lanham Act.

o The Court recognizes that a patent based on functionality does not necessarily preclude a finding that the same feature can also be a “nonfunctional” trademark feature. However, the Court recognizes that there is a presumption that a feature cannot be both functional for purposes of a patent and nonfunctional for purposes of a protectable trade dress.

o The Court determines that the dual spring design is functional, and it recognizes that to give MDI trademark protection would allow them to double-dip on their single design. There is a strong public policy in favor of allowing competition after the expiration of a patent

IV. False Advertisinga. Lanham act covers false statements of fact during advertising process- “any

person who... in connection w/ goods in commerce… false or misleading descriptions/representations of fact, which in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin… shall be liable for civil action…. Bla bla (p. 286)

b. Specific statements of fact (explicit or implicit representations that test proves its product superior) are actionable.

i. Plaintiff must show:1. There’s nothing that conclusively demonstrates that one

product is superior to another2. OR that the advertisement though literally true, is likely to

mislead and confuse consumers.

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ii. Designed to protect false actions by competitors that damage other competitors in the marketplace

iii. As with other sections of the Lanham Act, § 43(a) (false advertising), the wording is very broad to allow court interpretation. While the statutory language seems to allow individual consumers to bring a false advertising claim, courts have overwhelmingly held that this is not the purpose of the Lanham Act, so such a claim is not allowed.

Castrol v. Quaker Stateo Quaker claimed its oil was vastly superior to other oils in an overwhelming

majority of test engines. While Quaker’s oil did enjoy a faster “oiling” time, Castrol argued there was absolutely no evidence that Quaker’s oil provided better protection than Castrol’s product b/c “residual oil” in an engine negates any advantages of having a faster oiling time.

o The Lanham Act protects against the false statements of fact used in advertising against competitors.

Because Quaker claimed that a test proved its facts, Castrol only had to show the tests did not establish the claims made, so then Quaker had the burden of proving its product was in fact superior.

Had Quaker only claimed its product was superior without pointing to facts, then Castrol would have had the burden of proof to show that Quaker’s product was in fact NOT superior to Castrol’s product.

The Right of Publicity & Trade Secrets & Protecting IdeasI. Right of Publicity- protects one’s name, voice, likeness used for commercial

purposes w/out their consent. Applies to person only, including the famous as well as mere mortals. Governed by the Uniform Trade Secret Act (USTA)a. Plaintiff must allege

i. Defendant used Plaintiff’s identityii. Appropriation of Plaintiff’s name or likeness to Defendant’s

advantageiii. Lack of consentiv. Resulting injury

Midler v. Ford Motor Co.o Δ Ford launched its “yuppie” campaign, and Ford wanted Π Midler to use

her song in its ad. Π declined to allow her song to be used, or to sing for the commercial. In response, Ford went and got one of her old backup singers to sing Π’s song and was told to “sound as much as possible like the Bette Midler record.” Π claims she has been deprived of her song and image. Normally, the backup singer woman would be allowed to sing however she did, but because she was hired by Ford to intentionally sound like the Π, she was a claim under the Right of Publicity.

o Because Ford appropriated Midler’s identity, Δ violated Π’s common law right of publicity. The court recognizes that a human voice is highly identifiable and is deserving of protection under the common law.

o There are probably many times when imitation of a voice is not actionable, but where the distinctive voice of a professional singer is

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widely known and is deliberately intimidated in order to sell a product, the product seller has committed a tort (at least in California).

Damages here certainly included an injunction and probably included monetary damages in relation to what Π could have made had she been paid to perform the commercial endorsement.

b. Recognized limitation for legitimate news reporting, commentary, entertainment, works of fiction or nonfiction, or in advertising that is incidental to such uses (e.g. celebrity pictures in magazines).

o Human Cannonball Case, note 6, p. 297. Not all news reports get automatic protection from right of publicity suits. Because the news report aired his entire, 15-second act, the media violated his common law rights, and he could recover despite the media’s claim of 1st Amendment protection.

c. What about the 1st Amendment?- Use the Rogers test applied in the Outkast case:i. Artistic Relevance- is the use of the identity related to the artistic

expression and message of the song? If not used for marketing purposes, not violation

ii. Misleading- would consumers believe the person whose identity was used was associated with the song? But be careful, no consumer confusion proof is necessary as in trademark law.

Parks v. LaFace Records o Rosa Parks sues inter alia for Right of Publicity and False Advertising

under the Lanham Act. Court uses the Rogers Test in order to balance the First Amendment defenses of Outkast and the Right of Publicity/False Advertising claim of Parks. Rogers is a two part test, and the same analysis is applied to both claims of Parks:

Artistic Relevance the question is whether Park’s name has something to do with the song, or whether Outkast used her name solely for marketing purposes. Is the phrase “back of the bus” enough, considering this phrase as used by Outkast, is saying other rappers are inferior. Remanded

Misleading Prong - Is Park’s name, as used, explicitly misleading to consumers. The Court determines that reasonable minds could not differ on this. There is clearly no explicit misleading, so the trier of fact below will only consider “artistic relevance”.

d. What about photos/likeness of a person? [Tiger Woods case]- court applies artistic relevance test again to person who took photos and made prints of past champions

i. A person’s image or likeness cannot function as a trademark. ii. Celebrity’s name may be used in the title of an artistic work so long as

there is some artistic relevance- a photo is not inherently distinctiveiii. However, celebrity can get royalties if it was a commercial product, like,

for example, a door mat. ETW (Tiger Woods) v. Jireh Publishing

o Woods sued Jireh and the artist of a painting artistically depicting Woods’ victory at the Masters.

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o There is a proprietary right in one’s name, but not to the extent that Woods is asking for here.

o The court finds artistic relevance under the Rogers Test.e. Does the right of publicity survive death?

i. Becoming increasingly like survival statutes in tortsii. Courts are prone to recognize commercial rights in IP after a the person

has died (think of the family members)f. Right of Publicity is a personal tort but a commercial right of protection.

Corporations do not have a right of publicity.g. Right of Publicity requires a showing of pecuniary loss, but False Advertising

does not.

II. Trade Secretsa. Trade secret law is a creature of state law, there is no federal trade secret

protection. Along with patent law, trade secret law is one of the principle ways in which new inventions are protected.

b. Uniform Trade Secret Act (majority rule) Established in Minuteman v. Alexander Test if Infringement/Definition of trade secret: Information, including a formula, pattern, compilation, program, device, method, technique, or process to which all of the following apply:

i. Economic value - derives value from not being generally known (look at competitive advantages)

1. Can be actual or potential value2. Doesn’t require you to be the only corp. with the information3. Can be multiple companies can have the formula, but it is still not

known to other competitors and the general public. ii. Reasonable secrecy efforts - Information is the subject of efforts to

maintain its secrecy that are reasonable under the circumstances. c. Another test:

i. Info not readily ascertainableii. Economic value- competitive advantage

iii. Reasonable efforts to maintain secrecyiv. Developed at Plaintiff’s expense

d. Four ways trade secret infringement can occuri. Breach of confidence Confidence can be established in a number of

ways1. Relationship - i.e., R&D employee2. Employee given confidential information (or have good reason to

know it is) in employer’s operation. a. Duty to implicitly maintain that information from

relationship of the parties.3. Express agreement

a. For third party contractors, or employeesii. Improper means

1. Illegal means- breaking into the plant

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2. Fraudulent misrepresentations3. Tapping wires4. Eavesdropping5. Espionage [DuPont]6. Receives by express agreement

- Lambweston v. McCain Foodso company had sought and obtained patents for this machineo can choose to seek patent protection or trade secreto when you first develop something, probably develop it in secret and

only protect it through trade secret lawso once its completed, must choose; In this case, there are two

inventions. One is the machine, and the other is the process for making the machine

o They decided to patent the machine and keep the process for manufacturing the machine as a trade secret. Process can theoretically be protected by trade secret for an indefinite amount of time

- DuPont v. Christopher o Christopher takes photographs for 3rd party. Gets sensitive

information. DuPont sues for misappropriation of trade secrets. claims that there must be some wrongful, i.e. illegal, conduct before misappropriation of trade secrets;

o court found that only need to acquire information in improper wayo DuPont had taken reasonable means to protect trade secretso Improper conduct is broad description that has latitude for individual

circumstances. If conduct was designed to bypass reasonable measures, (i.e., flying over fence), probably good argument for improper conduct

iii. Receiving 1. Receives when knows or has reason to know came from improper

means, but didn’t actually arrange it2. Very important to be able to sue these people; more likely to be

deep pockets and more likely to need injunction against themiv. Accidental disclosure

1. Can be liability if know or have reason to know it is trade-secretv. One of the above four must be shown for trade secret violation

e. Arguments/reasons for Trade secret:i. Problems:

1. Trade secret law offers limited protection; unless you are capable of keeping the information secret

2. If you want full protection, file a patent3. Reverse engineering, independent research, and imitations are not

protected- only protects the secret information being obtained directly from you.

ii. Benefits:1. Patents expire, whereas trade secrets have no limit

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2. May be unable to receive a patentf. Remedies:

i. Temporary injunction - Court would determine the period of time it would have taken the thief company to obtain the formula via legal means

ii. Damages could be awarded if the secret was re-sold.

III. Non-Competition Agreements- i. 3 Part Test

1. Is the restraint reasonable in the sense that it is no greater than is necessary to protect the employer in some legitimate business interest?

a. Also look at whether it is too geographically broad2. Is the restraint reasonable in the sense that it is not unduly harsh

and oppressive in curtailing his legitimate efforts to earn a livelihood?

a. Rationale: We want competition; counter argument – but D’s still got their info as hired workers under P.

b. Basically, look at whether the employee retains broad employability?

3. Is the restraint reasonable from the standpoint of a sound public policy?

ii. Difference from confidentiality agreement?- you don’t have to show a breach in trade secret law under no-competes.

- Comprehensive Technologies International v. Software Artisans, Inc.o Hawkes was employee. Part of his employment contract required that

he not reveal or use any of their trade secrets and for a year couldn’t compete, hire other employees, or solicit customers of company. Hawkes left with group of other employees and they all formed corporation that produced software similar to former company’s product. District court said non-compete was too broad,

o appellate court overturned after looking at 3 part test

IV. Protecting Ideas- contractual theories are difficult to use for idea protectioni. To recover for the misappropriation of an idea

1. The idea is Novel; some courts soften this idea under bargain for exchange principles

2. The idea is in concrete form3. And the defendant must makes use of the idea

- Sellers v. American Broadcasting Co.o Sellers allegedly promised Rivera true cause of Elvis’s death. They

signed agreement that sellers would get copyright and credit. Rivera asked for more proof. Sellers called Rivera’s wife and said it was verified, but wouldn’t reveal proof. 9 months later, ABC and Rivera went to investigate, found proof, and used story

o NY court said contract was too vague and uncertain to be enforceable

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b. Other methods of protecting ideas: Unjust Enrichment and Quasi-Contract; ownership of invention/process ideas in employment situations

i. Unjust enrichment- P may recover under Unjust Enrichment theory where the D is in possession of money or property which in good conscience and justice he should not retain.

1. Compensation must be based upon the reasonable value of the use and the reasonable value of the services rendered by the P.

2. [Materese]- course of dealing b/t parties to encourage employee to build a loading device; employee never compensated

3. Factors to consider if Unjust enrichment principles apply:a. Relationship b/t the parties before and after the disclosureb. The seeking of disclosurec. Promises of compensationd. Specific character, novelty, and patentability of plaintiff’s

inventione. Subsequent use made by the defendantf. Lack of compensation given to plaintiff

ii. Spectrum of Employment1. R&D employees - specifically hired to conduct research for the

company. The employer owns what’s developed2. Outside Work - (employee in the garage scenario)- not an R&D

employee, not using resources of employer, essentially “moonlighting”, then the rights belong to the employee

3. Shop Right - where P is an employee, not R&D, but develops an invention/idea using company resources and time. Employee owns invention, but employer gets perpetual license to use invention in business. Don’t have to compensate employee. Concept is that equitably, employer should have some right to use b/c of company time and resources put into it

- Matarese v. Moore-McCormack Lines, Inc.o was part time employee who worked on ’s pier. invited fury to

his house to see models. Fury expressed satisfaction and hired to construct machines from models. was eventually fired with no compensation for his ideas for the machines. sued under theory of quasi contract, or unjust enrichment. Important that he was not an R&D employee; if he had been, he wouldn’t have had much right to sue. Shop right prevents him from using his patent to sue; limits ability to sue former employer.

o Π wins because his idea was concrete and novel (he applied for a patent) AND his employer had promised him compensation

iii. Line b/t protected and unprotected idea?1. Abstract ideas will not be given protection without a showing of

concreteness and novelty

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2. For example, if you have an idea for a movie that encompasses one sentence, no protection; but if you have plot structure, characters, etc… you have a stronger argument for protection.

- Smith v. Recrion Corp.o Smith, while employed as a keno writer by the Stardust Hotel in Las

Vegas, thought of idea that a recreational vehicle park constructed and operated as a part of the luxury hotel would be a profitable idea. Smith developed a brochure and had meeting with GM of hotel. GM sent smith letter saying it was not interested. Two years later, Recrion opened up camper park. Smith sued for express contract and implied contract, and common law copyright

o Court found there was no express contract or implied contracto Court went further to say that idea could not be protected by express or

implied contract unless it occurred before disclosure of the ideao Looked at common law copyright, and said it must be concrete enough

to begin on idea immediately; ’s idea failed concreteness requisite; still required a lot of research into idea

iv. Contractual claims-1. Express contract- terms are expressed in words/writing2. Implied contract- terms are manifested by conduct3. Implied in fact- the court would have to determine that both parties

intended to contract, and that promises were exchanged.

PATENT LAWOverview

I. Patent Act of 1952a. Patents are federally regulated; no state patent lawsb. Application process through the USPTO- Patent and Trade Office

II. General Informationa. Novelty- this is the common idea in all patents; Once you establish novelty, you

can receive a patent. Can patent anything that is “the product of human ingenuity”

b. Statutory Monopoly- Patents are a statutory right to exclude others during the life of the patent, which is 20 years from the date of application (14 years for design patents). This is a monopoly on your product, which allows you to exclude others not only from copying the subject matter of the patent, but also from exploiting any independently developed subject matter which is identical to, or equivalent to, the patented invention.

c. Disclosure- but, if you get a patent, you must disclose information on the product to the PTO. See enabling below.

d. Limits on Patentability i. Laws of nature- a new mineral Diamond v. Chakrabarty

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o Applicant developed bacteria which helps clean up oil spills. Patent examiner refused to issue patent because the invention is a living organism. The appeals court reverses because the bacteria is not naturally occurring, has great economic utility, and was truly novel.

o Normally, natural processes are not patentable, but here, Applicant has satisfied the requirements for obtaining a patent. There is a clear difference here between discovering something new in nature and human development of a new product. The genetic engineering here made the bacteria a useful new product.

ii. Physical phenomena iii. Abstract ideas

State Street Bank v. Signature Financial Groupo Signature develops some great mutual fund software and State

Street wants to get a license. The talks break down, and State Street files a DJ against Signature to invalidate the patent. State Street wins at the trial court and Signature appeals.

o Mathematical Algorithm Exception - MA is not patentable as an abstract idea with a product patent, but it may be patented if used in a useful and concrete result as a process patent.

o Business Method Exception - court shoots this exception down as invalid.

III. 3 types of Patentsa. Utility - garden variety patent; 3 types (20 years)

i. Product- examples include light bulbs, mousetraps. Eligible to “whoever invents or discovers new and useful products, machines, manufacturers, or composition of nature, or any new useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title.” This basically covers “products of human ingenuity.”

ii. Process- process for accomplishing some result (e.g. chemical production). 2 types of tests to determine if patent applies:

1. Mathematical Algorithm Test- whether it recites, directly or indirectly, a mathematical algorithm, which the Sup. Ct. has described as “a procedure for solving a given mathematical problem.”

2. Physical Transformation test- determining whether the claimed invention is applied to or limited by physical elements or process steps; regardless of whether the invention performs mathematical operations; if it transforms or reduces the subject matter to a different state or thing, it is statutory under § 101. But, business methods (ways of doing business) are not patentable b/c they’re abstract ideas.

iii. Improvement- improvement on either #1 or #2. Examples include improving an existing car (e.g. hybrid car, even though it could be a product patent as well)

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b. Design - patent on ornamental features of a product. Similar to trade dress in that it deals with non-functional features of the product. (14 years)

c. Plant - as in botany, seeds, etc… Must be a distinct plant variety

Requirements/Triggers for Patent ProtectionI. Utility patents- must be:

a. Novel - an invention is not patentable unless it differs from all products and processes in existence at the time it was invented. So, the patent office doesn’t allow a patent once there has been prior knowledge or used information of the same device

i. Prior Art – is it new? (what is out there already, and cannot be claimed as a new patentable invention):

Connecticut Valley Enterprises v. United Stateso Part of proving novenas is a major component of obtaining a

patent. This means there cannot be Prior Knowledge or Used

Information of the Prior Art under §102(a) This also means more than talking in abstraction about

the subject of the patent. CVE’s “invention” had been produced by a prior inventor and then abandoned ???

ii. Prior Knowledge – (w/in US only) just merely writing an article speaking in abstract terms that something can be done does not establish this.

- In Re Wyer o The appellant, before applying for his application in the US, applied

for a patent in Australia a year earlier. You must bring something brand new to the table to get a patent, so it can’t be a part of the state of the art, which includes printed, published materials, but this printed, published materials must actually tell you how the invention works to void patentability.

o Prior art = knowledge/use, elsewhere patented, and published somewhere in the world. The question is whether that application qualified as publication

o Four criteria to determine if there if publication Intent to make public Activity in disseminating Production of a certain number of copies, and production by a method allowing production of a large

number of copies o A person cannot serve as his own prior art. So a person’s prior

activities does not harm his ability to obtain a patent.iii. Prior Use – (US only) something that can function (in present terms).iv. Patented (worldwide) - a foreign or domestic patent application

constitutes a “printed publication.” Must be publicly accessible (is it available online, etc.). A foreign patent that does not contain an enabling disclosure does not qualify.

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v. Design Patents- novelty of a design patent is to be considered in light of the impact of the design upon the ordinary observer. This condition is met when the “average observer takes the new design for a different, and not a modified already existing design.”

vi. Timing of Patents- you have one year from the time you place the product/invention in public use, not counting experimental use, to obtain patent (see Public use below)

vii. § 102(g)1. Patent Rights granted to the first inventor, not first one to get the

patent application filed (US rule).2. First inventor – as long as reasonably diligent in carrying out the

invention process. a. reduces it to practice – b. Exception: Inventors who deliberately concealing their

invention can forfeit their rights. Paulik v. Rizkalla

o Inventor works on an invention, but then he puts it aside, and then picks it back up and works on it some more. Other guy comes along and files a patent after first inventor has started back on the project.

o 2nd guy argues that he won the foot race to the patent office, but that is not the American law.

We have a first to invent system, not a foot race system. Most other jurisdictions have a first to file approach.

o However, under our system, if an inventor works on a new invention and then it goes dormant and he never picks it back up in a reasonable time before the second guy comes along and files, then the first inventor can lose his priority under “spurring” doctrine.

Also, a major purpose of patents is to disseminate knowledge, so if an inventor is just sitting on an invention waiting for it to develop into something else (more lucrative), then he may lose his protection. This is a reasonableness test.

b. Nonobvious - [John Deere]- under § 103- means there is actually something being invented. 3 part test:

i. Scope and extent of the prior art ii. Differences b/t the prior art and the claims at issue

iii. The level of ordinary skill in the pertinent art- not an “ordinary inventor”

iv. Secondary considerations:1. market considerations – commercial success 2. long-felt need – long felt, but unresolved needs

a. Look at prior unsuccessful (failed) attempts at making an invention to solve a known problem. If you’re coming up

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to a solution to a longstanding/baffling problem, then you are probably going to get patent protection.

3. acquiescence among competitors – when others in the market place see the invention, and add it to their own use, this shows “nonobviousness.”

4. Favorable comments of experts in field5. Failure of others

Graham v. John Deereo In this case, spring guard was the subject of the patent dispute. The

“inventor” was held to not be an inventor, but rather a smart mechanic. Not Non-obvious.

c. Useful i. Utility - The process must be refined and developed to the point where a

specific benefit exists in its currently available form. Because a monopoly is being created, the Court requires that actual usefulness of the product be shown.

1. Note The utility requirement for Plant Patents is replaced by “distinctiveness”. This could be purely ornamental differences.

Brenner v. Mansono Π applied for a patent for a steroid which Π believed would be

useful for cancer treatment. Patent office rejected his application because there was no proven utility yet, even though Π established the steroid was closely related to other steroids which did have a tumor-inhibiting effect in mice. The Supreme affirmed.

ii. Design- To qualify, the design must be primarily ornamental (in place of the useful requirement in utility patents). A utility patent would deal with matters such as an arch support or tread for the shoe, whereas here, the issue was design of color, etc…)

Avia Group International v. L.A. Gear.o To be patentable, the design may not be functional. It must be

ornamental only. The same shoe could have been patented under both design and utility patents, but both patents could not be granted on the same aspects of the show. Some parts of a shoe may be protected by a utility patent, and other parts may be protected by a design patent.

o Proving that a variety of designs that have the same function affect is one way of showing that a particular design is ornamental and thus protectable by a design patent.

For example: Chair legs are obviously very functional. A design patent may be granted for particular types or designs of chair legs because many designs of chair legs would accomplish the purpose of holding up the chair.

II. Public Use- § 102(b)- 1 year rule- shows that once you invent something, go ahead and obtain a patent.

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a. 1 Year Statute of Limitations- [Metallizing]- D’s challenged validity of P’s patent on the ground that the inventor had placed the patented process into public use more than 1 year before the patent application was filed.

i. Sales constitutes a prior use that starts the 1 year time limit (to date of application).

1. The 1 year limit is similar to a SOL.2. Other countries require a patent before the item enters the market.

No grace period at all.ii. Testing and experimentation – if purpose of use to test whether it will

work, then the inventor will not trigger the 1 year period. Even if the experimentation discloses the product to the public.

iii. Rule of thumb when an inventor starts to exploit his invention commercially, 1 year starts to run. One reason patents grant legal monopoly is to encourage disclosure. Inventor cannot rely on secrecy and then obtain patent in order to extend the time period of his monopoly.

Metallizing Engineering Co. v. Kenyon Bearing and Auto Partso Δ’s successfully challenged validity of Π’s patent on the ground that

the inventor had placed the patented process into public use more than 1 year before the patent application was filed.

b. “On Sale”- Pfaff v. Wells Electronics

o Π filed a patent application for a computer chip socket. Π showed a sketch to Texas Instruments. TI agreed to buy 30,000 units of the new device.

o The Court held that the sale triggered the 1 year period even though the chips had not been produced as of yet.

o Π perhaps could have sold the patent or a license to TI without triggering the 1 year limitation, but here sale focused on actual product, so he’s screwed.

III. Patent Specification - for both, only look at what inventor knew at the time of the applicationa. Enabling-

i. a patent is enabling when the disclosures made in the patent application are sufficient to allow a person skilled in the art to make and use the claimed invention.

ii. This requirement is designed to ensure that the subject matter of the claimed invention is generally in the possession of the public and ready to be reproduced following the expiration of the patent period.

iii. Test:1. Define the scope of the claimed invention2. Look to the disclosures made in the patent to ascertain whether,

given that level of disclosure, a person skilled in the art could successfully reproduce the claimed invention in its entire scope

b. Best Mode- requires patent applicant to disclose the best way contemplated by the inventor of carrying out the invention (i.e. making). But, if a better way

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comes along during the patent period, the inventor has not duty to update his patent registration.

Christianson v. Colt Industrieso Π challenged the validity of Δ’s patents on various rifle components. Π

says Δ didn’t disclose the Best Mode of using those inventions to make the parts interchangeable with an M-16.

o Colt is able to hold back some important information here because Colt artfully set out its patent claim with regard to interchangeability to some rifles and it never claimed to be replacement parts to the M-16 specifically.

Patent OwnershipI. Joint Ownership- priority or co-ownership of patents.

a. A joint invention is the product of a collaboration b/t two or more persons working together to solve the problem addressed.

i. Each co-inventor has an equal interest in revenue from the invention. They don’t qualitatively/quantitatively assess the actual contribution. Each has rights to make use and license the invention.

ii. In a lawsuit, all co-inventors must consent to file suit. b. 3 Part Test - When an invention is made by two or more persons jointly, they

shall apply for patents jointly and each make the required oath, excepts as otherwise provided in this title. Inventors may apply for a patent jointly even though

i. They did not physically work together or at the same timeii. Each did not make the same type or amount of contribution

iii. Each did not make a contribution to the subject matter of every claim of the patent

c. Collaboration - to be considered joint inventors, there must be some element of joint behavior/ collaboration or connection.

d. Material Contribution - If there is any material contribution to the invention, they are entitled to be listed as a co-inventor. The amount of contribution does not have to be equal between the co-inventors.

i. What’s considered a material contribution? Can be worked out by inventors, but if lawsuit, question of fact

ii. Disclosure of co-inventors filing patent- Inventorship requirement to disclose and name all inventors on the patent.

1. Good faith - inadvertent or negligent omissions can be corrected.2. Bad faith - however, attempts to deceive who invented the patent

would result in the patent’s invalidation. iii. NOTE: If inventors have already conceptualized invention to the point

that a person of ordinary skill in the profession could reduce it to practice, help reducing it to practice does not qualify somebody as a co-inventor. Not a material contribution.

Kimberly Clark Corp. v. Procter and Gambleo Proctor and Gamble and Kimberly Clark both have ideas for leak proof

diapers with elasticized flaps. Kimberly Clark’s patent was issued in 1987

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and based on work from 1982. P&G’s was issued in September of 1987 and was based on idea of Michael Lawson from 1985. District court gave priority to Kimberly Clark. PG argues that two other inventors worked on idea in 1979 and 1982 and therefore Lawson’s patent qualified as joint invention and should be given priority. BUT, Lawson didn’t know about other inventors work

o Court ruled that joint invention required some collaboration b/w joint inventors

Burroughs Welcome v. Barr Laboratorieso This case deals with developing treatments for HIV virus. Inventors filed

patent application in GB for using AZT to treat Aids. Then, government scientists helped test effectiveness, results showed effectiveness against HIV as well as AIDS. Inventors filed 6 patents in US, 5 to treat aids, 1 to treat HIV. Government scientists were not listed as co-inventors.

o Issue: Were government scientists co-inventors (i.e. did they make material contribution) and so failure to include them invalidates patent, or had other inventors already conceptualized patents to the point that a person of ordinary skill in profession could reduce it to practice. Clearly had conceptualized with respect to AIDS treatment, remanded to determine whether they had conceptualized HIV treatment

o NOTE: Barr Laboratories erroneously argued that Burroughs needed reasonable scientific evidence that drug treatments would work b/c of unpredictability of field, but Court says only need to have it conceptualized

Patent InfringementI. During the patent term, the holder of a design or utility patent has the right to exclude

others from making, using, selling, or offering to sell the invention throughout the US, and from importing the invention into this country

i. Where the invention is a process, each of these exclusive rights extends to products produced by the process

II. § 112 of Patent Act - Specification - required to describe the market and process of making and using the invention so that any person skilled in the art can utilize it

III. Literal Infringement a. An accused product or process must embody every limitation in the claims

alleged to have an infringementb. Invasion on the patent owner’s exclusive right to exclude others from making,

using, selling, offering to sell, and importing the invention. c. Useful guide- whether persons reasonably skilled in the art would have known of

the interchangeability of an ingredient not contained in the patent with one that was?

IV. Equivalence -

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i. Doctrine that prevents non-patent holder from avoiding patent infringement by making a relatively obvious substitution in ingredient or material of an invention or step of a process

ii. Test is whether persons reasonably skilled in the art would have known of the interchangeability of an ingredient (material or step) not contained in the patent with one that was?

iii. Don’t want to reward creative drafting, a good patent application will try to protect any possible use; must actually use it

V. Reverse doctrine of equivalents - i. if not doing the same thing in the same way, but appear on the surface of

the literal claim; court will try to look at form over substanceii. However, slight change that does not fall within the literal language of

patent but is still the same in substance, can be ruled equivalent and infringing

VI. Pioneer Patent - pioneer patent expand the doctrine of equivalencei. Policy is that when someone comes up with revolutionary change, there

will always be substitutes for some products, i.e., substituting NutraSweet for Splenda

ii. Going to give patent holder broader rights b/c they have come up with something so unique

VII. Two Step Analysis for determining patent infringement (from Autogiro Co. v. US)i. Determine the meaning of the claims in issue by a study of all relevant

patent documents1. Compare the accused subject matter with the claims2. Claims define the scope of the invention and create the boundaries

that other inventors may not cross. Infringements refer first to the specific language of the patent claims.

3. Look at patent application of alleged infringer Marksman case - established rule that issue of interpreting scope of

patent claim is issue of law for the court and not an issue of fact for a jury

ii. Read the claims on the accused structures1. If the structures do the same work in substantially the same way

and accomplish substantially the same result, constitutes infringement (I guess structures are material part of patent???)

2. Doesn’t just matter that they read literally on the structures (this is Reverse Doctrine of Equivalency)

3. Infringing activities- was the patent holder’s exclusive right to the patent violated by the defendant’s actions?

VIII. Other types of Infringementi. Active Inducement or Infringement – actions that may cause, urge,

encourage, or aid another to infringe on a patent. Met-coil v. Korners

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o buys patented machine from . uses machine to produce non-patented parts that are used in ’s patented process and have no other use. P sued D for inducing infringement of its patent. D argues that P, by selling the machines, granted its buyers an implied license to use the patented method. Because Machine had no non-infringing use (i.e., was only good for producing non-patented parts that were used in patented process) and b/c circumstances of sale implied license, won.

ii. Contributory Infringement – selling a component that has no other non-infringing use (that will be incorporated into a patented object)

IX. Defenses- the assumption of validity of a patent can be overcomei. Patent Invalidity - attacking the validity of a patent. Rationale for

allowing courts to review patents - Patents can make their way through PTO and have fundamental flaws because the process is ex parte – no competitors there to challenge it. (Meyers - on average, 33% of patents challenged are invalidated).

1. Does patent fail to satisfy any of the requirements of patentability? Novelty, non-obviousness, or usefulness (on its face).

2. On sale bar - Was invention offered for sale before 1 year prior to the invention?

3. Fails best mode standard4. Fails enablement requirement – disclosing how to carry out the

invention5. Inventors not disclosed.6. Patent owner has a presumption of validity; so burden on

challengerii. Inequitable conduct -

1. fraudulent concealment; 2. applicant has a duty to be forthcoming in disclose everything

material to PTO. iii. Prosecution History Estoppel (also called File Wrapping)

1. When patent is rejected application and inventor narrows application in order to receive patent, inventor is estopped from claiming equivalence on some of the broader subject matter that was cut out by the narrowing.

a. Often reason it is narrowed is that broader subject matter is part of prior art. If it is, infringement claim based on equivalence will be unsuccessful

2. Flexible rule as to what is barred. Have to look at reason application was narrowed. Would patent have been rejected if applicant had tried to include equivalents at issue?

3. Times when estoppel not applieda. If the amendment is used only to add more description.

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b. If the equivalent may have been unforeseeable at the time of application;

c. Patentee could not reasonably be expected to have described the insubstantial substitute in question.

4. Policy behind PHE is that competitors should be able to rely on fact that some rejected parts of patents application are invalid. Often in tension with the equivalence rule.

iv. Laches or Estoppel - patent owner knew they were infringing, but sat on it and didn’t enforce their rights.

v. Misuse - patent owner trying to bundle patent w/ other unpatented objects. Alters free competition in the marketplace. Don’t want to broaden the scope of the patent to the extent that a monopoly is created.

1. Done by Tie-ins, preventing competition through package deals (think Microsoft and Office/Windows package), or Tie-outs, preventing competition by excluding competitors’ products by license use

2. [Court looks at market power:a. Misuse – prevents patent holders in engaging in

overreaching in contractual/ licensing agreements.i. anti-competitive conduct:

ii. attempts to fix the priceb. The more market power it has, the more concerned the

courts will be w/ the conduct of the patent holders. In re Recombinant DNA Technology Patent and Contract

Litigationo Eli Lily argues Π Genen-tech misused its patent which

prohibits Π from enforcing its patents. Genen-tech included provision in license agreement where licensee would forfeit rights if they sold products that were not produced by Genen-tech (tie-out provision). 1988 patent Misuse Reform Act makes tying arrangements illegal only if patent holder has market power, so case was remanded to determine if Genen has market power

vi. Implied License - see [Met-Coil] above1. Two Part test to determine if implied license

a. Equipment involved must have no non-infringing uses.b. Circumstances of the sale must plainly indicate that t he

grant of a license should be inferred.2. If patent owner wants to limit license, do so at time of sale.

Generally if you purchase a product you have the right to resell it, export it, etc. even if it may have an effect of increasing competition with the patent holder.

3. Shop Right Defense- see above

X. Remediesi. 35 U.S.C. § 284

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1. Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.

ii. Injunctive relief- stop the infringing actioniii. Monetary Damages- if you prove patent infringement, courts must award

“damages adequate to compensate for the infringement”2. Types of Monetary Damages

a. Lost profitsb. Reasonable royaltiesc. Increased damages- willful/bad faith damagesd. Attorney’s fees and costse. Pre-judgment interest

3. Patent prosecution is one of biggest areas for malpractice: tough deadlines and no chance for correcting screw-ups (huge costs and reliance to corporations).

4. Distinction that patent litigation doesn’t require taking the patent bar. Drafting patent applications does require taking it.

Copyrights

IntroductionI. Protects a broad range of creative expression/works. Some state law, but mostly

(today) preempted by the Federal Copyright Act. II. History/ Background of Copyright Protection

a. Originated in England in response to development of the printing press. b. Constitutional origin – Intellectual property clause - Article I, § 8, clause 8, grants

Congress power “to promote the progress of science and useful arts, by securing for limited times to authors and inventors…”

c. 1790 Copyright Act (14 years + renewal of 14 years) – first federal statute on copyright – protected only a limited number of works like books, charts, and maps. They later added designs, prints, photographs, musical compositions, etc. Extended to protect foreign works in 1891.

i. Terms:1. 14 years plus a 14 year renewable term2. 28 + 143. 28 + 28

d. Copyright Act of 1909 – governed by first copyrights issued in 1923 – instead of specific examples, it used a broad definition of “all the writings of an author.”

i. term – 75 yearsii. 1912 – added motion pictures

iii. 1971 – added sound recordingse. Copyright Act of 1976 (current, but amended greatly) –

i. term – life of author + 50 years.

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ii. 1998 Sonny Bono Copyright Term Extension Act – added 20 years to all copyright terms. 1909 copyrights last for 95, and under 1976 it would be life + 70 years.

f. Reduction in formalities over time as well. g. Increasing internationalization of copyright protection today.h. Trend that Copyright industries play large role in economics –

i. C represent 12% of GNP (1.25 trillion dollars)

Subject Matter of CopyrightI. Intro

Burrow-Giles v. Sarony (1884) – o D was producing thousand of duplicates of P’s picture. P charged D with

violating his copyright. Trial court found for P. P had elaborately created the photo through selecting the costume arrangements, draperies, etc. Court held that the photo was a product of the P’s creative work / intellectual invention and can be protected.

o still litigation today over whether photos are protectedo Copyrights do not prevent others from trying to reproduce the same setting and

take their own photograph.II. Fixation Requirement

a. Copyrighted material must be “fixed in tangible medium of expression” (some type of permanent form)

III. “Original Works of Authorship” 1976 changed “all writings of an author” to “original works of authorship” shows technological advances/ modern formats in which copyright works might exist.a. Originality: The minimum requirement

i. Requirements:1. Originality – author must be source of the work2. Creativity – low threshold (not great artistic/creative judgment) as

long as some creativitya. Does not require novelty. b. e.g., 2 poets can draft identical poems and each is original

and both are copyrightable.ii. Facts are not original, and not copyrightable.

1. Exception: the selection, coordination, or arrangement of the facts, with enough creativity, may qualify for copyright, but still can’t copyright underlying facts

iii. “Sweat of the Brow” Doctrine – 1. idea that effort going into factual compilations should be rewarded2. not recognized under US copyright law b/c purpose is to advance

public good, not reward “authors”3. doctrine essentially allows copyright of facts and ideas

Feist v. Rural (1991 USSC) – Feist used, w/out consent, Rural’s directory info of address listings/ phone numbers to create its own phone directory. Court held that the alphabetical listing by Rural was not original and therefore not copyrightable.

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West v. Mead (Lexis) – D was planning to use a pagination feature which would enable

Lexis users to determine the West page number to corresponding opinion viewed w/ Lexis. West groups and arranges the cases into reporters and volumes. The court holds that the case arrangements West produces through this process is the result of considerable labor, talent, and judgment, and are original works of authorship.

Inconsistent w/ Feist because there is nothing original in numbering 1-900.

b. Distinguishing Expression from Ideas and Factsc. Originality in Derivative Worksd. Originality in Specialized Subject Matter

i. Computer Softwareii. Useful Articles

e. Subject Matter Excluded Due to Origin

Ownership, Assignment, and Licensing of CopyrightsI. Initial Ownership

a. Joint Worksi. Work prepared by two or more authors with the intention that their

contributions be merged into inseparable or interdependent parts of a unitary whole.

ii. Joint authors have an equal, undivided in the interest in the copyright.iii. For a joint work to exist:

1. all joint authors must make copyrightable contributions AND2. Both must intend for it to be a joint work.3. There seems to be a presumption against joint authors because

there would be an extension of the copyright length.iv. default rule in the absence of any agreement to the contrary is if there is

joint authorship, measure time from death of last living author Childress v. Taylor

o Taylor talked Childress into writing a play about Jackie Mabley so that Taylor could star as Mabley in a play. When Taylor wanted to make revisions to the play, Childress sued for copyright infringement. Taylor had made numerous research contributions to Childress’ efforts to write the play. There was no contract stipulating as to ownership rights.

o The Court held that Childress did not have the intent to have a co-author, and it appears that Taylor really didn’t intend to be a co-author. She wanted to contribute to the play writing because she was wanted to play the part of Mabley.

o Copyright rights can be assigned through contract agreements, and here, that’s what ole Taylor should have done

b. Works Made for hire

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i. § 101 “work made for hire” “work prepared by an employee within the scope of his or her employment

ii. Generally, the author or artist holds the copyright, but when it is work made for hire, employer owns copyright

iii. Considerations in Work Made For Hire claims.1. In order to determine if person is employee or independent

contractor, look at common law agency rules2. Ask Meyers if we need to know factors?3. Also, certain commissioned works are works for hire if there is an

express agreement. Community for Creative Nonviolence v. Reid

o Here, there is a question as to whether the artist was hired for the purposes of making the sculpture.

o Court held Reid is independent and since a sculpture is not one of the special categories under § 101(2), Reid is the owner of the copyright

iv. How long does a corporate entity last if they own the copyright1. Copyright Act has a duration provision for works for hire:

a. 120 years from creation orb. 95 years from publication, which ever expires first

c. Notice i. © does not actually have to appear for a work to be protected, but this was

not always the case.ii. Under 1909, if you published a work without the copyright notice, the

work was forfeited and the work fell into the public domain. This still applies for works published under the 1909 act.

iii. Under 1976, you could cure failures of lack of copyright notice.iv. Berne Convention Amendments is the current law, enacted on 3/1/89.

1. Before, International people didn’t require the formal requirements, so they would lose in the US

2. Now, © is no longer a mandatory aspect3. It is still important, though, to

a. Prerequisite to filing suitb. Affects remedies availablec. Protects against the defense of inadvertent infringement.

v. Federal copyright now attaches when it is fixed in a tangible form or medium

II. Duration Eldred v. Ashcroft

o Π makes two claims. Congress exceeded the scope of its copyright powers by extending the

length of copyrights. The extension is a facial violation of the 1st amendment.

o Π’s claim against Congress’ power:

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Π claims “limited” in the Const. means that extensions are unconstitutional.

Court defines “limited” as occupying a limited space in time, so extensions are not bad.

Also, Congress has regularly extended the duration of a copyright since the founding

Exclusive RightsI. The § 106 Rights

a. Reproduction Horgan v. MacMillan, Inc.

o Issue: Does the still reproductions of the play infringe on the copyrighted choreography of a play

o Possibly, but would need to be enough pictures to visualize choreography

Walt Disney Productions v. Filmation Associateso Disney claims that Filmation copied cartoon figures from Disney’s

animated film Pinocchio and has begun to use them in producing a script. argues that they are going to change it before the film, so it’s not fixed/permanent, and therefore is not an actionable copy.

o Court says it doesn’t have to be permanent in that sense, only has to be fixed in tangible medium of expression so that it can be perceived

b. Preparation of Derivative Works i. Derivative work is a work based on one or more preexisting copyrighted

work. Examples:1. translation2. musical arrangement, 3. dramatization, 4. fictionalization, 5. motion picture version, sound recording, 6. art reproduction, 7. abridgment, 8. condensation, 9. or any other form in which a work may be recast, transformed, or

adapted Midway Mfg. V. Artic International

o Midway creates circuit boards that can be inserted into video game machines to speed up play. Speeded up games are in demand b/c they are more challenging. As owner of original copyright, Artic should have right to monopolize faster circuit boards if it is a derivative work. Court classified it as derivative work, partly b/c some of the code was based on code from video game machine, and ruled for .

Lewis Galoob Toys, Inc. v. Nintendo of America

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o Lewis Galoob made Game genies. Nintendo sued, claiming it was derivative work under same theory as midway. Court distinguished b/c genie didn’t incorporate software or replace chip of Nintendo. Analogized to a spell checker not being a derivative work of a word processor.

c. Public Distribution - Religious Technology Center v. Netcom Internet (Scientology case)

o Guy put up website against scientology. Website had writings that belonged to scientology. Scientology sued internet provider. Court said could not sue internet provider b/c they were only acting as conduit.

o Analogy to person who faxes copyrighted materially illegally; phone company not liable, person who sends it is

i. Now, there is statute that prevents IP’s from being held liable for copyright infringement of website

d. Public Performance and Public Display i. A performance is “public” if it takes place “at a place open to the public or

at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.”

ii. One of principle purposes of this definition is to make clear that performances in “semipublic” places such as clubs, lodges, factories, summer camps, and schools are “public performances” subject to copyright control.o Columbia Pictures Industries, Inc., v. Redd Horne, Inc.

operates movie rental stores which have “viewing rooms.” Essentially small movie theatres. argues that b/c only 2 to 4 people can fit in each one, they are likely only to be filled with family and close acquaintances.

Court said it was not distinguishable from any other public place and ruled for

iii. The definition also makes clear that the concepts of public performance and public display include not only performances and displays that occur initially in a public place, but also acts that transmit or otherwise communicate a performance or display of the work to the public by means of any device or process.

iv. The definition of “transmit” - to communicate a performance or display “by any device or process whereby images or sound are received beyond the place from which they are sent” - is broad enough to include all conceivable forms and combinations of wires and wireless communications media.o On Command Video Corporation v. Columbia Pictures Industries

On Command has hotel video-movie viewing system where hotel occupant can order movie from his room. All movies are in central place. When ordered, a machine places video in player and transmits to room. While being played, only one room can view it.

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Court ruled that b/c it was transmitted beyond the place from which they are sent, it was violation of copyright.

e. The Scope of Exclusive Rights in Sound Recordings i. venue where live music is heard; bar or restaurant or shopping center

1. each of those activities is a public performance of copyrighted music

2. each place is open to the publicii. having cd doesn’t give right to distribution; first sale doctrine doesn’t

apply1. for each of these places, better have a license or exemption

iii. Congress enacted § 110(5)1. Communication of a transmission embodying a performance or

display of the work by a public perception of the public on a single receiving apparatus of a kind commonly used in the home; … ??? (radio or TV broadcast)

2. BMI, ASCAP, & SESAT a. These are non-profit organizations that go around and

enforce copyrights in public places such as restaurants b. Also give non-exclusive license to broadcast their songs.

iv. What about bands that play live music?1. Don’t have right to cover songs unless you get a license2. Bars are often responsible for making sure have protection

II. Specific Limitations of § 106 Rightsa. First Sale Ruleb. § 110 Limitationsc. § 117 Copying Computer Softwared. § 108 Library and Archival Copyinge. § 115 Compulsory Licensing of Musical Compositions for Reproduction on

Phonorecords

III. Moral Rightsa. Moral v. economic rights

i. economic rights § 106ii. traditionally, U.S. hasn’t recognized moral rights and moral rights weren’t

historically important part of developmentiii. Now, b/c of other countries’ recognition of them and treaty obligations,

they’re becoming more importantb. Right of Attribution

i. Right of author to be recognized by name as the author of his work or to publish anonymously or pseudo-anonymously

ii. Right to prevent the author’s work from being attributed to someone else, and

iii. Right to prevent the use of the author’s name on works created by others, including distorted editions of the author’s original work

c. Right of Integrity

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i. Right to prevent any deforming or mutilating changes to his work, even after title of work has been transferred

ii. In some jurisdictions, right of integrity also protects artwork from destruction

d. Visual Artists Rights Act of 1990 (VARA)i. Limitations

1. Doesn’t apply to works for hire2. Has to apply to visual art

a. Paintings, sculptures, drawings, photographs, so long as they are in limited edition

b. Movies, music, books, architectural works, computer programs, etc. are NOT Included

3. Only life of the author, not life plus 70; only worried about the moral rights of actual author

4. Must be work of some recognized staturea. Probably proved by expert testimony

e. Berne Convention’s protection i. “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”

ii. B/c in Treaty, must recognize in U.S. Lawiii. US only recognizes visual rights, but Berne doesn’t limit that, so VARA

by itself doesn’t satisfy treaty1. US response is that § 43 of Lanham act (unfair competition) and

various state laws provides same rights to anyone;iv. But notice that Berne doesn’t actually cover destruction

o Carter v. Steele Helmsey-Spear Artist tried to prevent destruction of his sculpture, but court

found it was a work for hire, and therefore VARA didn’t apply.

Fair Use § 107I. Defenses of copyright

1. Work is not copyrightable (must be registered)2. Independent creation3. Both works copied from a common source4. An express or implied license5. Fair use

II. Limitation on § 106 (economic rights) and § 106(A) (moral rights)III. Fair use of a copyright, including reproducing for following reasons, is not

infringement (however, it’s not automatic)i. Criticism

ii. Commentiii. News reporting

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iv. Teaching (including multiple copies for classroom use)v. Scholarship

vi. Research

IV. In determining whether the use made of a work in any particular case is a fair use the following factors shall be considered (THIS IS HEART OF DEFENSE)

i. The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

ii. The nature of the copyrighted work

iii. The amount of substantiality of the portion used in relation to the copyrighted work as a whole;

iv. The effect of the use upon the potential market for or value of the copyrighted work. The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors (just one of the things considered)

(REMEMBER FOR EXAM)

V. The 1976 House Report lists examples, “ by no means exhaustive,” of the sort of activities the courts might regard as fair use under the circumstances:

i. “Quotation of excerpts in a review or criticism for purposes of illustration or comment;

ii. quotation of short passages in a scholarly or technical work, for illustration or clarification of the author’s observations;

iii. use in a parody of some of the content of the work parodied; iv. summary of an address or article, with brief quotations, in a news report;v. reproduction by a library of a portion of a work to replace part of a

damaged copy; vi. reproduction by a teacher or student of a small part of a work to illustrate a

lesson; vii. reproduction of a work in legislative or judicial proceedings or reports;

viii. incidental and fortuitous reproduction, in a newsreel or broadcast, or a work located in the scene of an event being reported

VI. IF something can be a good substitute for the original work, it will not likely be fair use. Sony v. Universal

o Universal and Disney brought action against Sony for manufacture of home videotape recorders (Betamax VTRs). There were legitimate uses of the VTR’s so court ruled in favor of Sony. Court essentially says Sony is not going to be on the hook because some people might use it to infringe on copyrights (had substantial non-infringing uses)

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Harper Row v. Nation Enterprises (Ford Memoir Case) o Harper Row had exclusive right to publish Ford’s memoirs, which

included why he pardoned Nixon. Time magazine reached license agreement for exclusive prepublication or review. A few weeks before time articles came out, somebody secretly brought book to editor for National Magazine. National was in hurry to beat Time, so Editor didn’t add any commentary. After being scooped, Time refused to pay. HR sued for copyright infringement & Nation enterprises claimed fair use.

o Factors Character and substance of the use

News reporting, but magazine went beyond mere reporting and tried to gain revenue by publishing juicy parts from book

Nature of copyrighted work didn’t stop at isolated phrases, but instead excerpted

passages Fact that a word is unpublished is important, and makes fair

use doctrine more limited Amount and substantiality used

Stripped to direct quotes, infringed quotes took up 13% of article;

court found that they had gutted book Effect of loss of license fees from Times

VII. NOTE: the fact that fair use is in market copyright owner is not going to take advantage of is not a defense; i.e., can’t use song in commercial and claim that wasn’t going to market to commercials.

VIII. SUNTRUST BANK pg 1087

IX. Pg. 1114 – examples of possible exam questionsX. Thumbnail can be fair useXI. §110

1. Showing a movie in class is okay2. Teach act – show a movie in distance education 3. Allows songs to be sung or heard in religious settings4. Limited non-profit fundraiser5. Getting radio or TV broadcast in business that’s open to the public6. State agricultural fair7. Play music in music store8. People with handicaps9. Handicap accommodations10. Veteran’s and non-profit organizations (no frats)11. Editing R rated movie for TV

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Infringement, Defenses, Remedies

I. InjunctionsII. Actual damages and profitsIII. Statutory damages and attorney’s fees

a. It’s difficult to prove the amount of harm so you can argue for statutory damagesb. A range of amounts that are possibly higher than your actual damages will be

IV. Impounding, importation relief, prejudgment interest, and costs

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