99
INTELLECTUAL PROPERTY CORE I........................................................Introduction 1 A. Philosophical Basis for Intellectual Property.......................1 B. Overview of U.S. and international Intellectual Property Legal Systems................................................................1 II...................................................... Trade Secrets 3 A. Defining Trade Secrets..............................................3 Uniform Trade Secret Act - § 1(4) (RCW 19.108 in Washington).....3 Torts § 757 comment b (Restatement of the Law)...................3 Unfair Competition § 39 (Restatement of the Law (Third)).........4 18 USC § 1831. ECONOMIC ESPIONAGE (on behalf of a foreign entity) 4 B. Reasonable Measures.................................................4 C. Disclosure of Trade Secrets; Non-Disclosure Agreements..............5 How Trade Secrets get out there:.................................5 Residuals Clause:................................................6 D. Trade Secrets and Employees (Modern Mobility).......................6 NDA and some issues:.............................................6 Covenants Not to Compete and some issues: Reasonableness.........6 Assignment of Inventions Clauses.................................6 Non-Solicitation Agreement.......................................6 Inevitable Disclosure – looking at the UTSA Section 2(a).........7 E. Proper and Improper Means of Discovery..............................7 "Misappropriation" means UTSA § 1(2):............................7 Liability for Disclosure or Use of Another's Trade...............8 Improper.........................................................8 Breach of Confidentiality........................................9 Proper means include: AKA Defenses to Misappropriation...........9 F. Remedies...........................................................10 Injunctive Relief...............................................10 Damages - USTA..................................................10 Punitive Damages and Attorneys’ Fees............................10

Intellectual Property - Notes, Outline

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Page 1: Intellectual Property - Notes, Outline

INTELLECTUAL PROPERTY CORE

I Introduction 1A Philosophical Basis for Intellectual Property1B Overview of US and international Intellectual Property Legal Systems1

IITrade Secrets 3A Defining Trade Secrets3

Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)3Torts sect 757 comment b (Restatement of the Law)3Unfair Competition sect 39 (Restatement of the Law (Third))418 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)4

B Reasonable Measures4C Disclosure of Trade Secrets Non-Disclosure Agreements5

How Trade Secrets get out there5Residuals Clause6

D Trade Secrets and Employees (Modern Mobility)6NDA and some issues6Covenants Not to Compete and some issues Reasonableness6Assignment of Inventions Clauses6Non-Solicitation Agreement6Inevitable Disclosure ndash looking at the UTSA Section 2(a)7

E Proper and Improper Means of Discovery7Misappropriation means UTSA sect 1(2)7Liability for Disclosure or Use of Anothers Trade8Improper8Breach of Confidentiality9Proper means include AKA Defenses to Misappropriation9

F Remedies10Injunctive Relief10Damages - USTA10Punitive Damages and Attorneysrsquo Fees10

III Patents 11A Patentable Subject Matter11B Novelty and Statutory Bars12

Conception13Reduces to Practice (RTP) =13Diligence13AIA14

C Utility14D Non-obviousness16

1 Prior Art scope and content (different from Novelty a bit)162 Differences between the Prior Art and the Claims at Issue173 PHOS in the pertinent Art17Obvious or Not18

E Disclosure proof of possession1835 USC 112 paragraph 118Written Description18Enablement19Best Mode19

F Patent Rights and Claim Interpretation1935 USC 271 Infringement of patent19Claim Writing19Claim Interpretation20Cannons of Claim Interpretation20

G Non-Utility Patents20Section 112 paragraph 620

H Infringement Doctrine of Equivalents20Literal Infringement20Doctrine of Equivalents21Prosecution History Estoppel22Reverse Doctrine of Equivalents24Indirect Infringement24

I Defenses24Invalidity24Experimental Use24Inequitable Conduct25Exhaustion of Patent Rights25Patent Misuse25

J Remedies26Injunctive Relief26Damages26Willful Infringement27

IVTrademarks 28A Protectable Subject Matter29

Cases29Qualitex v Jacobson (1995) ndash Color29Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri29Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 200030

Source Identifying Function30Trade Dress30

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY30Distinctiveness Categories of Marks31

GENERIC TERM31DESCRIPTIVE TERM32SUGGESTIVE TERM32ARBITRARY OR FANCIFUL TERMS32

Unprotectable Symbols32B Establishing Trademark Rights33

Use33Registration33

C Ownership34Priority34

Zazu Designs v LOreal SA(7th Cir 1992)34Assignment35Loss of Right35

D Standard Infringement361 Ownership of a Valid Mark362 In Commerce363 The Alleged Infringer Use364 The Mark or a Similar Symbol365 In Connection with selling or marketing of Goods or Services AND366 Likelihood of Confusion Mistake or Deception (gets an injunction)36

A Necessary Showing of Confusion36B Factors for Determining Likelihood Confusion36

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a)hellip37False Advertising37Cybersquatting37

F Dilution37THE CLAIM38Definition of Elements38Exclusions Defenses38

G Defenses38Parody39

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION39Genericide39

Murphy Bed v Interior Sleep Systems - GENERICIDE39Functionality39

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark39Naked Licensing39Fair Use39

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo39KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis40

H Remedies41Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis41

Big O Trie Dealers Inc v Goodyear ndash analysis41

VCopyright 43A Copyrightable Subject Matter43

17 USC sect 102 (a) - PROTECTABLE43Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book43

17 USC sect 102 (b) ndash NOT PROTECTABLE44Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY44Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION44Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS45Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK45

17 USC sect 103 (a) ndash Infringing Works Not Protectable4617 USC sect 105 ndash Government Works NOT protectable46

B Copyright Ownership46Term of Copyright46Who is the original Author46

Community for Creative Non-Violence v Reid47Aalmuhammed v Lee47

Transfers48Termination Right49

C Exclusive Rights49Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY49Nichols v Universal Pictures Corporation50

Reproduction Rights51Sony and Grokster51

Adaption Right51Anderson v Stallone ndash51

Distribution Right52Performance Right52Display Right52

D Fair Use Other Limitations on Exclusive Rights52Fair Use52

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)53Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally53Blanch v Koons55

First Sale55Compulsory License for Nondramatic Musical Works56Limitations on Computer Programs56Other Limits on Exclusive Rights56Defenses Other56

E Contributory Infringement and Vicarious Liability56Sony v Universal City Studios Inc56Grokster v MGM56

F Remedies58Copyright Infringement and Remedies58Property Like58Liability58

I Introduction

Is the plaintiff using itrsquos IP to attack related but unprotected material-Bike Rack Selling of Parody

A Philosophical Basis for Intellectual Property

The Types of Intellectual Property-not created with a large amount of foresight-the types have large gaps where material may simply lack protection-the alternative truth is that many materials are subject to multiple protections

First Principles-IP protections too weak open piracy-IP protections too strong limiting public health aims

-Locke added value-Hegel personhood reputation good will-Utilitarianism investment order incentives-Social Planning William Fisher think of the society you want then build the framework

that will create it -A priori John Rawls from behind the veil of ignorance

- CONTROL

What deserves Intellectual Property protections-the line between Abstract Ideas and Procedures Mixtures et cetera-the bell curve example whether its students or judges

B Overview of US and international Intellectual Property Legal Systems

1) Foreign Infringementa) NTP v RIM (CAFC 2005)

i) System and Method claims(1) At least one step of the method took place in Canada(2) Email routing system

ii) Compare 35 USC 271(a) and 35 USC 271(f)(1)(1) GENERAL the infringement has to occur in the country(2) EXCEPTION an intent to infringe abroad

iii) Injunction vs Public Policy can we shut down blackberryiv) Importance of claim drafting

b) Eolas v Microsoft (CAFC 2005)i) Foreign sales

1

c) Microsoft v ATampT (US 2007)i) ldquoGolden Mastersrdquoii) In Europe they made copies of ATampTrsquos golden masteriii) HELD copying occurring in Europe not within the USrsquos reach

2) International Intellectual Propertya) World Intellectual Property Organization (WIPO)

Comparative Patent LawTHE UNITED STATESFirst to InventGrace period--Publication--Public use--Sale

Few prior user rightsNo oppositionBest mode

REST OF THE WORLDFirst to FileAbsolute Priority

More Prior User RightsPost-grant oppositionNo best mode

b) The America Invents Acti) Patent Law Reform prepare for change

2

II Trade Secrets

Information Workers Non-Disclosure Agreements (NDAs) Exit InterviewsTheoretical Basis for Trade Secrets -Property Locke sort of idea -Tort regulates through risk

of criminal and civil liability-Contract NDAs terms of employment (work for hire vs on-contract) -Unfair Competition Law anti-trust the FTC as the referee in a grand boxing match

A Defining Trade Secrets

A modicum of secrecy beyond public informationhellip

Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)Trade secret means information including a formula pattern compilation program device method technique or process that

(i) derives independent economic value1 actual or potential from not being generally known2 to and not being readily ascertainable by proper means3 by other persons who can obtain economic value from its disclosure or use and

(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy

intended to include the concept of ldquoknow-howrdquo

Torts sect 757 comment b (Restatement of the Law)1) ldquocontinuously used in onersquos businessrdquo that gives its owner (NOT single ephemeral

events)2) ldquoan opportunity to obtain an advantage over competition who do not know or use itrdquo3) so long as the information was in fact a secret

Metallurgical Industries Inc v Fourtek Inc 790 F2d 1195 ndash specs for furnace Held Zinc-recovery furnace design company who was a former employee of a

bankrupt company that initially dealt with appellants trade secrets in order to build a furnace for the appellant The court concluded that the inferences from the facts construed favorably to appellant were that appellant wished only to profit from its secrets in its business dealings not to reveal its secrets to the public

1 Indicators of Value value to plaintiffrsquos business expert testimony development costs licensing (willingness of others to pay) security costs improper acquisition (they really wanted the information) Even negative value such as the knowledge that a line of research is unfruitful counts2 The lsquogenerally knownrsquo standard refers to the subgroup of persons that would typically know such information like chemical engineers programmers and the like 3 Something is readily ascertainable is the information is available relatively easily and cheaply such as in a trade journal

3

Unfair Competition sect 39 (Restatement of the Law (Third))A trade secret is any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford an actual or potential economic advantage over others

ldquoThe definition of trade secret contains a reasonable departure from the Restatement of Torts (First) definition which required that a trade secret be continuously used in ones business The broader definition in the proposed Act extends protection to a plaintiff who has not yet had an opportunity or acquired the means to put a trade secret to use The definition includes information that has commercial value from a negative viewpoint for example the results of lengthy and expensive research which proves that a certain process will not work could be of great value to a competitor Cf Telex Corp v IBM Corp 510 F2d 894 (CA10 1975) per curiam cert dismissed 423 US 802 (1975) (liability imposed for developmental cost savings with respect to product not marketed) Because a trade secret need not be exclusive to confer a competitive advantage different independent developers can acquire rights inthe same trade secretrdquo Comments to Uniform Trade Secrets Act sect 1(4)

18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)

(a) In Generalmdash Whoever intending or knowing that the offense will benefit any foreign government foreign instrumentality or foreign agent knowinglymdash

(1) steals or without authorization appropriates takes carries away or conceals or by fraud artifice or deception obtains a trade secret

(2) without authorization copies duplicates sketches draws photographs downloads uploads alters destroys photocopies replicates transmits delivers sends mails communicates or conveys a trade secret

(3) receives buys or possesses a trade secret knowing the same to have been stolen or appropriated obtained or converted without authorization

(4) attempts to commit any offense described in any of paragraphs (1) through (3) or

(5) conspires with one or more other persons to commit any offense described in any of paragraphs (1) through (3) and one or more of such persons do any act to effect the object of the conspiracy shall except as provided in subsection (b) be fined not more than $500000 or imprisoned not more than 15 years or both

(b) Organizationsmdash Any organization that commits any offense described in subsection (a) shall be fined not more than $10000000

B Reasonable Measures

Reasonable security measures are themselves indicative of a trade secret and its value

Types of MeasuresGuidelines Trainings NDA

Passwords NDA as an element of other contractsAccess Logs Network Access

Physical Access Restrictions Cover things up (just plain cloth)ldquoneed to know basisrdquo Stamping of Documents Signage

Beware Cleaning Staff

4

Determining ReasonablenessNOT Cost Prohibitive (Posnerrsquos argument) Industry Standards

Commensurate with the Secretrsquos value Common Sense (What might actually keep the information a secret)

ldquoFacts and Circumstancesrdquo Overuse of a measure devalues its purpose

Rockwell Graphic Systems Inc v DEV (1991) ndash Summary Judgment Reasonable MeasuresHeld Summary judgment is rarely if ever appropriate for determining whether

measures were reasonableFacts Plaintiff a manufacturer of newspaper printing presses and supplier of

parts sued Defendant Corporation a competing manufacturer and defendant president a former employee of plaintiff for misappropriation of trade secrets

Reasoning the mere fact that plaintiff gave piece part drawings to vendors who made parts for plaintiff did not forfeit trade secret protection

IMAX Corp v Cinema Technologies (1998) ndash IMAX duty to protect specificationsHeld the proprietor of an IMAX movie theater had a duty to IMAX to protect

the specifications of the projector as trade secrets from a competitor who was attempting to reverse engineer the IMAX technology

C Disclosure of Trade Secrets Non-Disclosure Agreements

How Trade Secrets get out therePublishing (which destroys trade secret status) Embedded into a product on the open market (which creates the possibility of reverse

engineering) exception is computer programs because clever engineer can figure out the code (ldquodecompilingrdquo) solution is lsquoterms of agreementrsquo aka lsquoclick-wraprsquo

Independent CreationInadvertent DisclosureTo Governments for the purpose of health and safety

Warner-Lambert Pharmaceutical Co v John J Reynolds Inc (1959) ndash Royalties ListerineHeld plaintiff could not escape that obligation simply because the secret was

discovered by a third party or by the general publicFacts contract provided that inventor would receive periodic royalty payments

at specified amounts for as long as plaintiff manufactured and sold the antiseptic compound Third party leaked the information so the plaintiff wished to quit paying royalties on something that was no longer a trade secret

Reasoning the plain language of the contract defined and stipulated that the royalties would be paid independent of the contingency of disclosure

5

Residuals Clause -tactics how they are used for what purposes time lag

D Trade Secrets and Employees (Modern Mobility)

NDA and some issues-does the employee receive consideration for signing one-cannot restrict information that an employee or partner already knew

Covenants Not to Compete and some issues ReasonablenessBecause proving misappropriation can be difficult to prove Duration Geographic Scope Type of Work Restrained

1) Is the restraint no greater than necessary to protect the legitimate business interests of the employer

2) Is the restraint unduly harsh and oppressive in curtailing the employeersquos legitimate efforts to earn a livelihood

3) Is the restraint contrary to sound public policy

Washington Breach of contract damages liquidated damages and lost profit are recoverable inWashington Perry v Moran 111 Wash2d 885 766 P2d 1096 (Wash 1989)California Business amp Professions Code sect 16601 creates an exception permitting lawful non-compete agreements for company owners A new section 166025 also applies to members of limited liability companies It applies when a shareholder sells their stock to another for valuable consideration (Hilb Royal amp Hamilton Ins Services v Robb (1995) 33 CalApp4th 1812 1824-1825) The typical scenario is when a shareholder sells or disposes of their stock

Assignment of Inventions Clauses-general rule if hired for that purpose belongs to employer if not hired for that purpose then belongs to the employee but the employer has a shop right

Non-Solicitation AgreementBusiness to Business no poachingBusiness to Employee no soliciting customers for employment

Holdover Trailer Clauses

Regulations Employee Handbooks

Prevention Keep Employees Happy

6

Inevitable Disclosure ndash looking at the UTSA Section 2(a)Settlement possibility looking for other places an employee could fit in the receiving company

PepsiCo Inc v Redmond (7th Circuit) ndash ldquoInevitable Disclosurerdquo All Sport Gatorade4

Held Redmond estopped from working for Quaker Oats (maker of Gatorade)Facts Former PepsiCo employee William Redmond who left that employ to go

to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledge

Reasoning Language of UTSA Section 2(a) ldquothreatrdquo of disclosure

E Proper and Improper Means of Discovery

Misappropriation means UTSA sect 1(2)(i) acquisition of a trade secret of another by a person who knows or has reason to know that the

trade secret was acquired by improper means or

(ii) disclosure or use of a trade secret of another without express or implied consent by a person who

(A) used improper means to acquire knowledge of the trade secret or

(B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was

(I) derived from or through a person who had utilized improper means to acquire it

(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use5 or

(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use or

(C) before a material change of his [or her] position knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake

4 ldquoThe principle behind this doctrine is that an employee with knowledge of a former employerrsquos trade secrets would ldquoinevitablyrdquo disclose the same to the new employer since the nature of the new job would lead to such disclosures given that the new and old employers were competitors And given the inevitability of such disclosures the former employer was not limited to sitting around and waiting until there was an actual or even threatened use of those trade secrets before the former employer could seek legal redress Under this doctrine that former employer could prevent the employee from taking that job and prevent the new employer from hiring the employee merely because the employee had such knowledge that would ldquoinevitablyrdquo be disclosed ldquoThe doctrine which has been adopted in some but not all states finds a coherent expression in a case out of the 7th Circuit PepsiCo Inc v Redmond That case involved a former PepsiCo employee William Redmond who left that employ to go to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo The case also involved other drink beverages in which the 2 companies competed Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledgerdquo httpwwwivanhoffmancominevitablehtml

5 Smith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

7

Liability for Disclosure or Use of Anothers Trade Restatement of the Law mdash Torts sect 757One who discloses or uses anothers trade secret without a privilege to do so is liable to the other if

(a) he discovered the secret by improper means or

(b) his disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to him or

(c) he learned the secret from a third person with notice of the facts that it was a secret and that the third person discovered it by improper means or that the third persons disclosure of it was otherwise a breach of his duty to the other or

(d) he learned the secret with notice of the facts that it was a secret and that its disclosure was made to him by mistake

Improper

EI Du Pont de Nemours amp Co v Christoph er (431 F2d 1012) ndash Business MoralityHeld Standard of ldquomeans which fall below the generally accepted standards of

commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939) Du Pont at 1016Flyover though not illegal was immoral and therefore improperTime Place and Circumstances

Facts Reasonable Measures taken to cover the factory during its construction but the ROOF was not covered

Reasoning ldquoThe Supreme Court of that state has declared that the undoubted tendency of the law has been to recognize and enforce higher standards of commercial morality in the business worldrdquo No productive work to gain the knowledge (really just free-riding)

f Improper means of discovery The discovery of anothers trade secret by improper means subjects the actor to liability independently of the harm to the interest in the secret Thus if one uses physical force to take a secret formula from anothers pocket or breaks into anothers office to steal the formula his conduct is wrongful and subjects him to liability apart from the rule stated in this Section Such conduct is also an improper means of procuring the secret under this rule But HN7means may be improper under this rule even though they do not cause any other harm than that to the interest in the trade secret Examples of such means are fraudulent misrepresentations to induce disclosure tapping of telephone wires eavesdropping or other espionage A complete catalogue of improper means is not possible In general they are means which fall below the generally accepted standards of commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939)

8

Breach of ConfidentialitySmith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

Held Misappropriation because circumstances in which information was revealed gave rise to an implied duty of confidentiality

Facts Smith had a great business idea but passed away (patent applications essentially inventing modern freight practices) followed by interest to buy the business expressed by Dravo Dravo does not purpose the business but then makes similar

Reasoning NDA is not the only way to establish a confidential relationship

Proper means include AKA Defenses to Misappropriation

1 Discovery by independent invention

2 Discovery by reverse engineering that is by starting with the known product and working backward to find the method by which it was developed The acquisition of the known product must of course also be by a fair and honest means such as purchase of the item on the open market for reverse engineering to be lawful

Kadant Inc v Seeley Mach Inc (244 F Supp 2d 19 (NDNY 2003))

ldquoTrade secret law does not offer protection against discovery by so-called reverse engineering However the term reverse engineering is not a talisman that may immunize the theft of trade secrets The relevant inquiry is whether the means to obtain the alleged trade secret were proper or honest as opposed to being obtained by virtue of a confidential relationship with an employer Reverse engineering a product to determine its design specifications is therefore permissible so long as the means used to get the information necessary to reverse engineer is in the public domain and not through the confidential relationship established with the maker or owner of the productrdquo HN 38

General debate around whether parties should be allowed to contract against reverse engineering Just reverse engineer in Europe

3 Discovery under a license from the owner of the trade secret

4 Observation of the item in public use or on public display

5 Obtaining the trade secret from published literature

9

F Remedies

Injunctive ReliefAn attempt to return the trade secret holder to the position they would have been in but for the misappropriation

Preliminary or PermanentTRO Until Public Knowledge

Damages - USTAActual losses (restitution) + Defendantrsquos wrongful profits (unjust enrichment) + ongoing royalty ndash any overlap =Misappropriation Damages

Punitive Damages and Attorneysrsquo FeesWillful and Malicious may justify treble damages (likely double) as well as attorneysrsquo fees

10

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 2: Intellectual Property - Notes, Outline

III Patents 11A Patentable Subject Matter11B Novelty and Statutory Bars12

Conception13Reduces to Practice (RTP) =13Diligence13AIA14

C Utility14D Non-obviousness16

1 Prior Art scope and content (different from Novelty a bit)162 Differences between the Prior Art and the Claims at Issue173 PHOS in the pertinent Art17Obvious or Not18

E Disclosure proof of possession1835 USC 112 paragraph 118Written Description18Enablement19Best Mode19

F Patent Rights and Claim Interpretation1935 USC 271 Infringement of patent19Claim Writing19Claim Interpretation20Cannons of Claim Interpretation20

G Non-Utility Patents20Section 112 paragraph 620

H Infringement Doctrine of Equivalents20Literal Infringement20Doctrine of Equivalents21Prosecution History Estoppel22Reverse Doctrine of Equivalents24Indirect Infringement24

I Defenses24Invalidity24Experimental Use24Inequitable Conduct25Exhaustion of Patent Rights25Patent Misuse25

J Remedies26Injunctive Relief26Damages26Willful Infringement27

IVTrademarks 28A Protectable Subject Matter29

Cases29Qualitex v Jacobson (1995) ndash Color29Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri29Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 200030

Source Identifying Function30Trade Dress30

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY30Distinctiveness Categories of Marks31

GENERIC TERM31DESCRIPTIVE TERM32SUGGESTIVE TERM32ARBITRARY OR FANCIFUL TERMS32

Unprotectable Symbols32B Establishing Trademark Rights33

Use33Registration33

C Ownership34Priority34

Zazu Designs v LOreal SA(7th Cir 1992)34Assignment35Loss of Right35

D Standard Infringement361 Ownership of a Valid Mark362 In Commerce363 The Alleged Infringer Use364 The Mark or a Similar Symbol365 In Connection with selling or marketing of Goods or Services AND366 Likelihood of Confusion Mistake or Deception (gets an injunction)36

A Necessary Showing of Confusion36B Factors for Determining Likelihood Confusion36

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a)hellip37False Advertising37Cybersquatting37

F Dilution37THE CLAIM38Definition of Elements38Exclusions Defenses38

G Defenses38Parody39

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION39Genericide39

Murphy Bed v Interior Sleep Systems - GENERICIDE39Functionality39

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark39Naked Licensing39Fair Use39

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo39KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis40

H Remedies41Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis41

Big O Trie Dealers Inc v Goodyear ndash analysis41

VCopyright 43A Copyrightable Subject Matter43

17 USC sect 102 (a) - PROTECTABLE43Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book43

17 USC sect 102 (b) ndash NOT PROTECTABLE44Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY44Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION44Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS45Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK45

17 USC sect 103 (a) ndash Infringing Works Not Protectable4617 USC sect 105 ndash Government Works NOT protectable46

B Copyright Ownership46Term of Copyright46Who is the original Author46

Community for Creative Non-Violence v Reid47Aalmuhammed v Lee47

Transfers48Termination Right49

C Exclusive Rights49Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY49Nichols v Universal Pictures Corporation50

Reproduction Rights51Sony and Grokster51

Adaption Right51Anderson v Stallone ndash51

Distribution Right52Performance Right52Display Right52

D Fair Use Other Limitations on Exclusive Rights52Fair Use52

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)53Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally53Blanch v Koons55

First Sale55Compulsory License for Nondramatic Musical Works56Limitations on Computer Programs56Other Limits on Exclusive Rights56Defenses Other56

E Contributory Infringement and Vicarious Liability56Sony v Universal City Studios Inc56Grokster v MGM56

F Remedies58Copyright Infringement and Remedies58Property Like58Liability58

I Introduction

Is the plaintiff using itrsquos IP to attack related but unprotected material-Bike Rack Selling of Parody

A Philosophical Basis for Intellectual Property

The Types of Intellectual Property-not created with a large amount of foresight-the types have large gaps where material may simply lack protection-the alternative truth is that many materials are subject to multiple protections

First Principles-IP protections too weak open piracy-IP protections too strong limiting public health aims

-Locke added value-Hegel personhood reputation good will-Utilitarianism investment order incentives-Social Planning William Fisher think of the society you want then build the framework

that will create it -A priori John Rawls from behind the veil of ignorance

- CONTROL

What deserves Intellectual Property protections-the line between Abstract Ideas and Procedures Mixtures et cetera-the bell curve example whether its students or judges

B Overview of US and international Intellectual Property Legal Systems

1) Foreign Infringementa) NTP v RIM (CAFC 2005)

i) System and Method claims(1) At least one step of the method took place in Canada(2) Email routing system

ii) Compare 35 USC 271(a) and 35 USC 271(f)(1)(1) GENERAL the infringement has to occur in the country(2) EXCEPTION an intent to infringe abroad

iii) Injunction vs Public Policy can we shut down blackberryiv) Importance of claim drafting

b) Eolas v Microsoft (CAFC 2005)i) Foreign sales

1

c) Microsoft v ATampT (US 2007)i) ldquoGolden Mastersrdquoii) In Europe they made copies of ATampTrsquos golden masteriii) HELD copying occurring in Europe not within the USrsquos reach

2) International Intellectual Propertya) World Intellectual Property Organization (WIPO)

Comparative Patent LawTHE UNITED STATESFirst to InventGrace period--Publication--Public use--Sale

Few prior user rightsNo oppositionBest mode

REST OF THE WORLDFirst to FileAbsolute Priority

More Prior User RightsPost-grant oppositionNo best mode

b) The America Invents Acti) Patent Law Reform prepare for change

2

II Trade Secrets

Information Workers Non-Disclosure Agreements (NDAs) Exit InterviewsTheoretical Basis for Trade Secrets -Property Locke sort of idea -Tort regulates through risk

of criminal and civil liability-Contract NDAs terms of employment (work for hire vs on-contract) -Unfair Competition Law anti-trust the FTC as the referee in a grand boxing match

A Defining Trade Secrets

A modicum of secrecy beyond public informationhellip

Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)Trade secret means information including a formula pattern compilation program device method technique or process that

(i) derives independent economic value1 actual or potential from not being generally known2 to and not being readily ascertainable by proper means3 by other persons who can obtain economic value from its disclosure or use and

(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy

intended to include the concept of ldquoknow-howrdquo

Torts sect 757 comment b (Restatement of the Law)1) ldquocontinuously used in onersquos businessrdquo that gives its owner (NOT single ephemeral

events)2) ldquoan opportunity to obtain an advantage over competition who do not know or use itrdquo3) so long as the information was in fact a secret

Metallurgical Industries Inc v Fourtek Inc 790 F2d 1195 ndash specs for furnace Held Zinc-recovery furnace design company who was a former employee of a

bankrupt company that initially dealt with appellants trade secrets in order to build a furnace for the appellant The court concluded that the inferences from the facts construed favorably to appellant were that appellant wished only to profit from its secrets in its business dealings not to reveal its secrets to the public

1 Indicators of Value value to plaintiffrsquos business expert testimony development costs licensing (willingness of others to pay) security costs improper acquisition (they really wanted the information) Even negative value such as the knowledge that a line of research is unfruitful counts2 The lsquogenerally knownrsquo standard refers to the subgroup of persons that would typically know such information like chemical engineers programmers and the like 3 Something is readily ascertainable is the information is available relatively easily and cheaply such as in a trade journal

3

Unfair Competition sect 39 (Restatement of the Law (Third))A trade secret is any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford an actual or potential economic advantage over others

ldquoThe definition of trade secret contains a reasonable departure from the Restatement of Torts (First) definition which required that a trade secret be continuously used in ones business The broader definition in the proposed Act extends protection to a plaintiff who has not yet had an opportunity or acquired the means to put a trade secret to use The definition includes information that has commercial value from a negative viewpoint for example the results of lengthy and expensive research which proves that a certain process will not work could be of great value to a competitor Cf Telex Corp v IBM Corp 510 F2d 894 (CA10 1975) per curiam cert dismissed 423 US 802 (1975) (liability imposed for developmental cost savings with respect to product not marketed) Because a trade secret need not be exclusive to confer a competitive advantage different independent developers can acquire rights inthe same trade secretrdquo Comments to Uniform Trade Secrets Act sect 1(4)

18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)

(a) In Generalmdash Whoever intending or knowing that the offense will benefit any foreign government foreign instrumentality or foreign agent knowinglymdash

(1) steals or without authorization appropriates takes carries away or conceals or by fraud artifice or deception obtains a trade secret

(2) without authorization copies duplicates sketches draws photographs downloads uploads alters destroys photocopies replicates transmits delivers sends mails communicates or conveys a trade secret

(3) receives buys or possesses a trade secret knowing the same to have been stolen or appropriated obtained or converted without authorization

(4) attempts to commit any offense described in any of paragraphs (1) through (3) or

(5) conspires with one or more other persons to commit any offense described in any of paragraphs (1) through (3) and one or more of such persons do any act to effect the object of the conspiracy shall except as provided in subsection (b) be fined not more than $500000 or imprisoned not more than 15 years or both

(b) Organizationsmdash Any organization that commits any offense described in subsection (a) shall be fined not more than $10000000

B Reasonable Measures

Reasonable security measures are themselves indicative of a trade secret and its value

Types of MeasuresGuidelines Trainings NDA

Passwords NDA as an element of other contractsAccess Logs Network Access

Physical Access Restrictions Cover things up (just plain cloth)ldquoneed to know basisrdquo Stamping of Documents Signage

Beware Cleaning Staff

4

Determining ReasonablenessNOT Cost Prohibitive (Posnerrsquos argument) Industry Standards

Commensurate with the Secretrsquos value Common Sense (What might actually keep the information a secret)

ldquoFacts and Circumstancesrdquo Overuse of a measure devalues its purpose

Rockwell Graphic Systems Inc v DEV (1991) ndash Summary Judgment Reasonable MeasuresHeld Summary judgment is rarely if ever appropriate for determining whether

measures were reasonableFacts Plaintiff a manufacturer of newspaper printing presses and supplier of

parts sued Defendant Corporation a competing manufacturer and defendant president a former employee of plaintiff for misappropriation of trade secrets

Reasoning the mere fact that plaintiff gave piece part drawings to vendors who made parts for plaintiff did not forfeit trade secret protection

IMAX Corp v Cinema Technologies (1998) ndash IMAX duty to protect specificationsHeld the proprietor of an IMAX movie theater had a duty to IMAX to protect

the specifications of the projector as trade secrets from a competitor who was attempting to reverse engineer the IMAX technology

C Disclosure of Trade Secrets Non-Disclosure Agreements

How Trade Secrets get out therePublishing (which destroys trade secret status) Embedded into a product on the open market (which creates the possibility of reverse

engineering) exception is computer programs because clever engineer can figure out the code (ldquodecompilingrdquo) solution is lsquoterms of agreementrsquo aka lsquoclick-wraprsquo

Independent CreationInadvertent DisclosureTo Governments for the purpose of health and safety

Warner-Lambert Pharmaceutical Co v John J Reynolds Inc (1959) ndash Royalties ListerineHeld plaintiff could not escape that obligation simply because the secret was

discovered by a third party or by the general publicFacts contract provided that inventor would receive periodic royalty payments

at specified amounts for as long as plaintiff manufactured and sold the antiseptic compound Third party leaked the information so the plaintiff wished to quit paying royalties on something that was no longer a trade secret

Reasoning the plain language of the contract defined and stipulated that the royalties would be paid independent of the contingency of disclosure

5

Residuals Clause -tactics how they are used for what purposes time lag

D Trade Secrets and Employees (Modern Mobility)

NDA and some issues-does the employee receive consideration for signing one-cannot restrict information that an employee or partner already knew

Covenants Not to Compete and some issues ReasonablenessBecause proving misappropriation can be difficult to prove Duration Geographic Scope Type of Work Restrained

1) Is the restraint no greater than necessary to protect the legitimate business interests of the employer

2) Is the restraint unduly harsh and oppressive in curtailing the employeersquos legitimate efforts to earn a livelihood

3) Is the restraint contrary to sound public policy

Washington Breach of contract damages liquidated damages and lost profit are recoverable inWashington Perry v Moran 111 Wash2d 885 766 P2d 1096 (Wash 1989)California Business amp Professions Code sect 16601 creates an exception permitting lawful non-compete agreements for company owners A new section 166025 also applies to members of limited liability companies It applies when a shareholder sells their stock to another for valuable consideration (Hilb Royal amp Hamilton Ins Services v Robb (1995) 33 CalApp4th 1812 1824-1825) The typical scenario is when a shareholder sells or disposes of their stock

Assignment of Inventions Clauses-general rule if hired for that purpose belongs to employer if not hired for that purpose then belongs to the employee but the employer has a shop right

Non-Solicitation AgreementBusiness to Business no poachingBusiness to Employee no soliciting customers for employment

Holdover Trailer Clauses

Regulations Employee Handbooks

Prevention Keep Employees Happy

6

Inevitable Disclosure ndash looking at the UTSA Section 2(a)Settlement possibility looking for other places an employee could fit in the receiving company

PepsiCo Inc v Redmond (7th Circuit) ndash ldquoInevitable Disclosurerdquo All Sport Gatorade4

Held Redmond estopped from working for Quaker Oats (maker of Gatorade)Facts Former PepsiCo employee William Redmond who left that employ to go

to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledge

Reasoning Language of UTSA Section 2(a) ldquothreatrdquo of disclosure

E Proper and Improper Means of Discovery

Misappropriation means UTSA sect 1(2)(i) acquisition of a trade secret of another by a person who knows or has reason to know that the

trade secret was acquired by improper means or

(ii) disclosure or use of a trade secret of another without express or implied consent by a person who

(A) used improper means to acquire knowledge of the trade secret or

(B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was

(I) derived from or through a person who had utilized improper means to acquire it

(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use5 or

(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use or

(C) before a material change of his [or her] position knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake

4 ldquoThe principle behind this doctrine is that an employee with knowledge of a former employerrsquos trade secrets would ldquoinevitablyrdquo disclose the same to the new employer since the nature of the new job would lead to such disclosures given that the new and old employers were competitors And given the inevitability of such disclosures the former employer was not limited to sitting around and waiting until there was an actual or even threatened use of those trade secrets before the former employer could seek legal redress Under this doctrine that former employer could prevent the employee from taking that job and prevent the new employer from hiring the employee merely because the employee had such knowledge that would ldquoinevitablyrdquo be disclosed ldquoThe doctrine which has been adopted in some but not all states finds a coherent expression in a case out of the 7th Circuit PepsiCo Inc v Redmond That case involved a former PepsiCo employee William Redmond who left that employ to go to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo The case also involved other drink beverages in which the 2 companies competed Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledgerdquo httpwwwivanhoffmancominevitablehtml

5 Smith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

7

Liability for Disclosure or Use of Anothers Trade Restatement of the Law mdash Torts sect 757One who discloses or uses anothers trade secret without a privilege to do so is liable to the other if

(a) he discovered the secret by improper means or

(b) his disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to him or

(c) he learned the secret from a third person with notice of the facts that it was a secret and that the third person discovered it by improper means or that the third persons disclosure of it was otherwise a breach of his duty to the other or

(d) he learned the secret with notice of the facts that it was a secret and that its disclosure was made to him by mistake

Improper

EI Du Pont de Nemours amp Co v Christoph er (431 F2d 1012) ndash Business MoralityHeld Standard of ldquomeans which fall below the generally accepted standards of

commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939) Du Pont at 1016Flyover though not illegal was immoral and therefore improperTime Place and Circumstances

Facts Reasonable Measures taken to cover the factory during its construction but the ROOF was not covered

Reasoning ldquoThe Supreme Court of that state has declared that the undoubted tendency of the law has been to recognize and enforce higher standards of commercial morality in the business worldrdquo No productive work to gain the knowledge (really just free-riding)

f Improper means of discovery The discovery of anothers trade secret by improper means subjects the actor to liability independently of the harm to the interest in the secret Thus if one uses physical force to take a secret formula from anothers pocket or breaks into anothers office to steal the formula his conduct is wrongful and subjects him to liability apart from the rule stated in this Section Such conduct is also an improper means of procuring the secret under this rule But HN7means may be improper under this rule even though they do not cause any other harm than that to the interest in the trade secret Examples of such means are fraudulent misrepresentations to induce disclosure tapping of telephone wires eavesdropping or other espionage A complete catalogue of improper means is not possible In general they are means which fall below the generally accepted standards of commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939)

8

Breach of ConfidentialitySmith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

Held Misappropriation because circumstances in which information was revealed gave rise to an implied duty of confidentiality

Facts Smith had a great business idea but passed away (patent applications essentially inventing modern freight practices) followed by interest to buy the business expressed by Dravo Dravo does not purpose the business but then makes similar

Reasoning NDA is not the only way to establish a confidential relationship

Proper means include AKA Defenses to Misappropriation

1 Discovery by independent invention

2 Discovery by reverse engineering that is by starting with the known product and working backward to find the method by which it was developed The acquisition of the known product must of course also be by a fair and honest means such as purchase of the item on the open market for reverse engineering to be lawful

Kadant Inc v Seeley Mach Inc (244 F Supp 2d 19 (NDNY 2003))

ldquoTrade secret law does not offer protection against discovery by so-called reverse engineering However the term reverse engineering is not a talisman that may immunize the theft of trade secrets The relevant inquiry is whether the means to obtain the alleged trade secret were proper or honest as opposed to being obtained by virtue of a confidential relationship with an employer Reverse engineering a product to determine its design specifications is therefore permissible so long as the means used to get the information necessary to reverse engineer is in the public domain and not through the confidential relationship established with the maker or owner of the productrdquo HN 38

General debate around whether parties should be allowed to contract against reverse engineering Just reverse engineer in Europe

3 Discovery under a license from the owner of the trade secret

4 Observation of the item in public use or on public display

5 Obtaining the trade secret from published literature

9

F Remedies

Injunctive ReliefAn attempt to return the trade secret holder to the position they would have been in but for the misappropriation

Preliminary or PermanentTRO Until Public Knowledge

Damages - USTAActual losses (restitution) + Defendantrsquos wrongful profits (unjust enrichment) + ongoing royalty ndash any overlap =Misappropriation Damages

Punitive Damages and Attorneysrsquo FeesWillful and Malicious may justify treble damages (likely double) as well as attorneysrsquo fees

10

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 3: Intellectual Property - Notes, Outline

IVTrademarks 28A Protectable Subject Matter29

Cases29Qualitex v Jacobson (1995) ndash Color29Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri29Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 200030

Source Identifying Function30Trade Dress30

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY30Distinctiveness Categories of Marks31

GENERIC TERM31DESCRIPTIVE TERM32SUGGESTIVE TERM32ARBITRARY OR FANCIFUL TERMS32

Unprotectable Symbols32B Establishing Trademark Rights33

Use33Registration33

C Ownership34Priority34

Zazu Designs v LOreal SA(7th Cir 1992)34Assignment35Loss of Right35

D Standard Infringement361 Ownership of a Valid Mark362 In Commerce363 The Alleged Infringer Use364 The Mark or a Similar Symbol365 In Connection with selling or marketing of Goods or Services AND366 Likelihood of Confusion Mistake or Deception (gets an injunction)36

A Necessary Showing of Confusion36B Factors for Determining Likelihood Confusion36

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a)hellip37False Advertising37Cybersquatting37

F Dilution37THE CLAIM38Definition of Elements38Exclusions Defenses38

G Defenses38Parody39

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION39Genericide39

Murphy Bed v Interior Sleep Systems - GENERICIDE39Functionality39

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark39Naked Licensing39Fair Use39

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo39KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis40

H Remedies41Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis41

Big O Trie Dealers Inc v Goodyear ndash analysis41

VCopyright 43A Copyrightable Subject Matter43

17 USC sect 102 (a) - PROTECTABLE43Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book43

17 USC sect 102 (b) ndash NOT PROTECTABLE44Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY44Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION44Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS45Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK45

17 USC sect 103 (a) ndash Infringing Works Not Protectable4617 USC sect 105 ndash Government Works NOT protectable46

B Copyright Ownership46Term of Copyright46Who is the original Author46

Community for Creative Non-Violence v Reid47Aalmuhammed v Lee47

Transfers48Termination Right49

C Exclusive Rights49Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY49Nichols v Universal Pictures Corporation50

Reproduction Rights51Sony and Grokster51

Adaption Right51Anderson v Stallone ndash51

Distribution Right52Performance Right52Display Right52

D Fair Use Other Limitations on Exclusive Rights52Fair Use52

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)53Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally53Blanch v Koons55

First Sale55Compulsory License for Nondramatic Musical Works56Limitations on Computer Programs56Other Limits on Exclusive Rights56Defenses Other56

E Contributory Infringement and Vicarious Liability56Sony v Universal City Studios Inc56Grokster v MGM56

F Remedies58Copyright Infringement and Remedies58Property Like58Liability58

I Introduction

Is the plaintiff using itrsquos IP to attack related but unprotected material-Bike Rack Selling of Parody

A Philosophical Basis for Intellectual Property

The Types of Intellectual Property-not created with a large amount of foresight-the types have large gaps where material may simply lack protection-the alternative truth is that many materials are subject to multiple protections

First Principles-IP protections too weak open piracy-IP protections too strong limiting public health aims

-Locke added value-Hegel personhood reputation good will-Utilitarianism investment order incentives-Social Planning William Fisher think of the society you want then build the framework

that will create it -A priori John Rawls from behind the veil of ignorance

- CONTROL

What deserves Intellectual Property protections-the line between Abstract Ideas and Procedures Mixtures et cetera-the bell curve example whether its students or judges

B Overview of US and international Intellectual Property Legal Systems

1) Foreign Infringementa) NTP v RIM (CAFC 2005)

i) System and Method claims(1) At least one step of the method took place in Canada(2) Email routing system

ii) Compare 35 USC 271(a) and 35 USC 271(f)(1)(1) GENERAL the infringement has to occur in the country(2) EXCEPTION an intent to infringe abroad

iii) Injunction vs Public Policy can we shut down blackberryiv) Importance of claim drafting

b) Eolas v Microsoft (CAFC 2005)i) Foreign sales

1

c) Microsoft v ATampT (US 2007)i) ldquoGolden Mastersrdquoii) In Europe they made copies of ATampTrsquos golden masteriii) HELD copying occurring in Europe not within the USrsquos reach

2) International Intellectual Propertya) World Intellectual Property Organization (WIPO)

Comparative Patent LawTHE UNITED STATESFirst to InventGrace period--Publication--Public use--Sale

Few prior user rightsNo oppositionBest mode

REST OF THE WORLDFirst to FileAbsolute Priority

More Prior User RightsPost-grant oppositionNo best mode

b) The America Invents Acti) Patent Law Reform prepare for change

2

II Trade Secrets

Information Workers Non-Disclosure Agreements (NDAs) Exit InterviewsTheoretical Basis for Trade Secrets -Property Locke sort of idea -Tort regulates through risk

of criminal and civil liability-Contract NDAs terms of employment (work for hire vs on-contract) -Unfair Competition Law anti-trust the FTC as the referee in a grand boxing match

A Defining Trade Secrets

A modicum of secrecy beyond public informationhellip

Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)Trade secret means information including a formula pattern compilation program device method technique or process that

(i) derives independent economic value1 actual or potential from not being generally known2 to and not being readily ascertainable by proper means3 by other persons who can obtain economic value from its disclosure or use and

(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy

intended to include the concept of ldquoknow-howrdquo

Torts sect 757 comment b (Restatement of the Law)1) ldquocontinuously used in onersquos businessrdquo that gives its owner (NOT single ephemeral

events)2) ldquoan opportunity to obtain an advantage over competition who do not know or use itrdquo3) so long as the information was in fact a secret

Metallurgical Industries Inc v Fourtek Inc 790 F2d 1195 ndash specs for furnace Held Zinc-recovery furnace design company who was a former employee of a

bankrupt company that initially dealt with appellants trade secrets in order to build a furnace for the appellant The court concluded that the inferences from the facts construed favorably to appellant were that appellant wished only to profit from its secrets in its business dealings not to reveal its secrets to the public

1 Indicators of Value value to plaintiffrsquos business expert testimony development costs licensing (willingness of others to pay) security costs improper acquisition (they really wanted the information) Even negative value such as the knowledge that a line of research is unfruitful counts2 The lsquogenerally knownrsquo standard refers to the subgroup of persons that would typically know such information like chemical engineers programmers and the like 3 Something is readily ascertainable is the information is available relatively easily and cheaply such as in a trade journal

3

Unfair Competition sect 39 (Restatement of the Law (Third))A trade secret is any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford an actual or potential economic advantage over others

ldquoThe definition of trade secret contains a reasonable departure from the Restatement of Torts (First) definition which required that a trade secret be continuously used in ones business The broader definition in the proposed Act extends protection to a plaintiff who has not yet had an opportunity or acquired the means to put a trade secret to use The definition includes information that has commercial value from a negative viewpoint for example the results of lengthy and expensive research which proves that a certain process will not work could be of great value to a competitor Cf Telex Corp v IBM Corp 510 F2d 894 (CA10 1975) per curiam cert dismissed 423 US 802 (1975) (liability imposed for developmental cost savings with respect to product not marketed) Because a trade secret need not be exclusive to confer a competitive advantage different independent developers can acquire rights inthe same trade secretrdquo Comments to Uniform Trade Secrets Act sect 1(4)

18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)

(a) In Generalmdash Whoever intending or knowing that the offense will benefit any foreign government foreign instrumentality or foreign agent knowinglymdash

(1) steals or without authorization appropriates takes carries away or conceals or by fraud artifice or deception obtains a trade secret

(2) without authorization copies duplicates sketches draws photographs downloads uploads alters destroys photocopies replicates transmits delivers sends mails communicates or conveys a trade secret

(3) receives buys or possesses a trade secret knowing the same to have been stolen or appropriated obtained or converted without authorization

(4) attempts to commit any offense described in any of paragraphs (1) through (3) or

(5) conspires with one or more other persons to commit any offense described in any of paragraphs (1) through (3) and one or more of such persons do any act to effect the object of the conspiracy shall except as provided in subsection (b) be fined not more than $500000 or imprisoned not more than 15 years or both

(b) Organizationsmdash Any organization that commits any offense described in subsection (a) shall be fined not more than $10000000

B Reasonable Measures

Reasonable security measures are themselves indicative of a trade secret and its value

Types of MeasuresGuidelines Trainings NDA

Passwords NDA as an element of other contractsAccess Logs Network Access

Physical Access Restrictions Cover things up (just plain cloth)ldquoneed to know basisrdquo Stamping of Documents Signage

Beware Cleaning Staff

4

Determining ReasonablenessNOT Cost Prohibitive (Posnerrsquos argument) Industry Standards

Commensurate with the Secretrsquos value Common Sense (What might actually keep the information a secret)

ldquoFacts and Circumstancesrdquo Overuse of a measure devalues its purpose

Rockwell Graphic Systems Inc v DEV (1991) ndash Summary Judgment Reasonable MeasuresHeld Summary judgment is rarely if ever appropriate for determining whether

measures were reasonableFacts Plaintiff a manufacturer of newspaper printing presses and supplier of

parts sued Defendant Corporation a competing manufacturer and defendant president a former employee of plaintiff for misappropriation of trade secrets

Reasoning the mere fact that plaintiff gave piece part drawings to vendors who made parts for plaintiff did not forfeit trade secret protection

IMAX Corp v Cinema Technologies (1998) ndash IMAX duty to protect specificationsHeld the proprietor of an IMAX movie theater had a duty to IMAX to protect

the specifications of the projector as trade secrets from a competitor who was attempting to reverse engineer the IMAX technology

C Disclosure of Trade Secrets Non-Disclosure Agreements

How Trade Secrets get out therePublishing (which destroys trade secret status) Embedded into a product on the open market (which creates the possibility of reverse

engineering) exception is computer programs because clever engineer can figure out the code (ldquodecompilingrdquo) solution is lsquoterms of agreementrsquo aka lsquoclick-wraprsquo

Independent CreationInadvertent DisclosureTo Governments for the purpose of health and safety

Warner-Lambert Pharmaceutical Co v John J Reynolds Inc (1959) ndash Royalties ListerineHeld plaintiff could not escape that obligation simply because the secret was

discovered by a third party or by the general publicFacts contract provided that inventor would receive periodic royalty payments

at specified amounts for as long as plaintiff manufactured and sold the antiseptic compound Third party leaked the information so the plaintiff wished to quit paying royalties on something that was no longer a trade secret

Reasoning the plain language of the contract defined and stipulated that the royalties would be paid independent of the contingency of disclosure

5

Residuals Clause -tactics how they are used for what purposes time lag

D Trade Secrets and Employees (Modern Mobility)

NDA and some issues-does the employee receive consideration for signing one-cannot restrict information that an employee or partner already knew

Covenants Not to Compete and some issues ReasonablenessBecause proving misappropriation can be difficult to prove Duration Geographic Scope Type of Work Restrained

1) Is the restraint no greater than necessary to protect the legitimate business interests of the employer

2) Is the restraint unduly harsh and oppressive in curtailing the employeersquos legitimate efforts to earn a livelihood

3) Is the restraint contrary to sound public policy

Washington Breach of contract damages liquidated damages and lost profit are recoverable inWashington Perry v Moran 111 Wash2d 885 766 P2d 1096 (Wash 1989)California Business amp Professions Code sect 16601 creates an exception permitting lawful non-compete agreements for company owners A new section 166025 also applies to members of limited liability companies It applies when a shareholder sells their stock to another for valuable consideration (Hilb Royal amp Hamilton Ins Services v Robb (1995) 33 CalApp4th 1812 1824-1825) The typical scenario is when a shareholder sells or disposes of their stock

Assignment of Inventions Clauses-general rule if hired for that purpose belongs to employer if not hired for that purpose then belongs to the employee but the employer has a shop right

Non-Solicitation AgreementBusiness to Business no poachingBusiness to Employee no soliciting customers for employment

Holdover Trailer Clauses

Regulations Employee Handbooks

Prevention Keep Employees Happy

6

Inevitable Disclosure ndash looking at the UTSA Section 2(a)Settlement possibility looking for other places an employee could fit in the receiving company

PepsiCo Inc v Redmond (7th Circuit) ndash ldquoInevitable Disclosurerdquo All Sport Gatorade4

Held Redmond estopped from working for Quaker Oats (maker of Gatorade)Facts Former PepsiCo employee William Redmond who left that employ to go

to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledge

Reasoning Language of UTSA Section 2(a) ldquothreatrdquo of disclosure

E Proper and Improper Means of Discovery

Misappropriation means UTSA sect 1(2)(i) acquisition of a trade secret of another by a person who knows or has reason to know that the

trade secret was acquired by improper means or

(ii) disclosure or use of a trade secret of another without express or implied consent by a person who

(A) used improper means to acquire knowledge of the trade secret or

(B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was

(I) derived from or through a person who had utilized improper means to acquire it

(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use5 or

(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use or

(C) before a material change of his [or her] position knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake

4 ldquoThe principle behind this doctrine is that an employee with knowledge of a former employerrsquos trade secrets would ldquoinevitablyrdquo disclose the same to the new employer since the nature of the new job would lead to such disclosures given that the new and old employers were competitors And given the inevitability of such disclosures the former employer was not limited to sitting around and waiting until there was an actual or even threatened use of those trade secrets before the former employer could seek legal redress Under this doctrine that former employer could prevent the employee from taking that job and prevent the new employer from hiring the employee merely because the employee had such knowledge that would ldquoinevitablyrdquo be disclosed ldquoThe doctrine which has been adopted in some but not all states finds a coherent expression in a case out of the 7th Circuit PepsiCo Inc v Redmond That case involved a former PepsiCo employee William Redmond who left that employ to go to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo The case also involved other drink beverages in which the 2 companies competed Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledgerdquo httpwwwivanhoffmancominevitablehtml

5 Smith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

7

Liability for Disclosure or Use of Anothers Trade Restatement of the Law mdash Torts sect 757One who discloses or uses anothers trade secret without a privilege to do so is liable to the other if

(a) he discovered the secret by improper means or

(b) his disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to him or

(c) he learned the secret from a third person with notice of the facts that it was a secret and that the third person discovered it by improper means or that the third persons disclosure of it was otherwise a breach of his duty to the other or

(d) he learned the secret with notice of the facts that it was a secret and that its disclosure was made to him by mistake

Improper

EI Du Pont de Nemours amp Co v Christoph er (431 F2d 1012) ndash Business MoralityHeld Standard of ldquomeans which fall below the generally accepted standards of

commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939) Du Pont at 1016Flyover though not illegal was immoral and therefore improperTime Place and Circumstances

Facts Reasonable Measures taken to cover the factory during its construction but the ROOF was not covered

Reasoning ldquoThe Supreme Court of that state has declared that the undoubted tendency of the law has been to recognize and enforce higher standards of commercial morality in the business worldrdquo No productive work to gain the knowledge (really just free-riding)

f Improper means of discovery The discovery of anothers trade secret by improper means subjects the actor to liability independently of the harm to the interest in the secret Thus if one uses physical force to take a secret formula from anothers pocket or breaks into anothers office to steal the formula his conduct is wrongful and subjects him to liability apart from the rule stated in this Section Such conduct is also an improper means of procuring the secret under this rule But HN7means may be improper under this rule even though they do not cause any other harm than that to the interest in the trade secret Examples of such means are fraudulent misrepresentations to induce disclosure tapping of telephone wires eavesdropping or other espionage A complete catalogue of improper means is not possible In general they are means which fall below the generally accepted standards of commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939)

8

Breach of ConfidentialitySmith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

Held Misappropriation because circumstances in which information was revealed gave rise to an implied duty of confidentiality

Facts Smith had a great business idea but passed away (patent applications essentially inventing modern freight practices) followed by interest to buy the business expressed by Dravo Dravo does not purpose the business but then makes similar

Reasoning NDA is not the only way to establish a confidential relationship

Proper means include AKA Defenses to Misappropriation

1 Discovery by independent invention

2 Discovery by reverse engineering that is by starting with the known product and working backward to find the method by which it was developed The acquisition of the known product must of course also be by a fair and honest means such as purchase of the item on the open market for reverse engineering to be lawful

Kadant Inc v Seeley Mach Inc (244 F Supp 2d 19 (NDNY 2003))

ldquoTrade secret law does not offer protection against discovery by so-called reverse engineering However the term reverse engineering is not a talisman that may immunize the theft of trade secrets The relevant inquiry is whether the means to obtain the alleged trade secret were proper or honest as opposed to being obtained by virtue of a confidential relationship with an employer Reverse engineering a product to determine its design specifications is therefore permissible so long as the means used to get the information necessary to reverse engineer is in the public domain and not through the confidential relationship established with the maker or owner of the productrdquo HN 38

General debate around whether parties should be allowed to contract against reverse engineering Just reverse engineer in Europe

3 Discovery under a license from the owner of the trade secret

4 Observation of the item in public use or on public display

5 Obtaining the trade secret from published literature

9

F Remedies

Injunctive ReliefAn attempt to return the trade secret holder to the position they would have been in but for the misappropriation

Preliminary or PermanentTRO Until Public Knowledge

Damages - USTAActual losses (restitution) + Defendantrsquos wrongful profits (unjust enrichment) + ongoing royalty ndash any overlap =Misappropriation Damages

Punitive Damages and Attorneysrsquo FeesWillful and Malicious may justify treble damages (likely double) as well as attorneysrsquo fees

10

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 4: Intellectual Property - Notes, Outline

Big O Trie Dealers Inc v Goodyear ndash analysis41

VCopyright 43A Copyrightable Subject Matter43

17 USC sect 102 (a) - PROTECTABLE43Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book43

17 USC sect 102 (b) ndash NOT PROTECTABLE44Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY44Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION44Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS45Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK45

17 USC sect 103 (a) ndash Infringing Works Not Protectable4617 USC sect 105 ndash Government Works NOT protectable46

B Copyright Ownership46Term of Copyright46Who is the original Author46

Community for Creative Non-Violence v Reid47Aalmuhammed v Lee47

Transfers48Termination Right49

C Exclusive Rights49Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY49Nichols v Universal Pictures Corporation50

Reproduction Rights51Sony and Grokster51

Adaption Right51Anderson v Stallone ndash51

Distribution Right52Performance Right52Display Right52

D Fair Use Other Limitations on Exclusive Rights52Fair Use52

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)53Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally53Blanch v Koons55

First Sale55Compulsory License for Nondramatic Musical Works56Limitations on Computer Programs56Other Limits on Exclusive Rights56Defenses Other56

E Contributory Infringement and Vicarious Liability56Sony v Universal City Studios Inc56Grokster v MGM56

F Remedies58Copyright Infringement and Remedies58Property Like58Liability58

I Introduction

Is the plaintiff using itrsquos IP to attack related but unprotected material-Bike Rack Selling of Parody

A Philosophical Basis for Intellectual Property

The Types of Intellectual Property-not created with a large amount of foresight-the types have large gaps where material may simply lack protection-the alternative truth is that many materials are subject to multiple protections

First Principles-IP protections too weak open piracy-IP protections too strong limiting public health aims

-Locke added value-Hegel personhood reputation good will-Utilitarianism investment order incentives-Social Planning William Fisher think of the society you want then build the framework

that will create it -A priori John Rawls from behind the veil of ignorance

- CONTROL

What deserves Intellectual Property protections-the line between Abstract Ideas and Procedures Mixtures et cetera-the bell curve example whether its students or judges

B Overview of US and international Intellectual Property Legal Systems

1) Foreign Infringementa) NTP v RIM (CAFC 2005)

i) System and Method claims(1) At least one step of the method took place in Canada(2) Email routing system

ii) Compare 35 USC 271(a) and 35 USC 271(f)(1)(1) GENERAL the infringement has to occur in the country(2) EXCEPTION an intent to infringe abroad

iii) Injunction vs Public Policy can we shut down blackberryiv) Importance of claim drafting

b) Eolas v Microsoft (CAFC 2005)i) Foreign sales

1

c) Microsoft v ATampT (US 2007)i) ldquoGolden Mastersrdquoii) In Europe they made copies of ATampTrsquos golden masteriii) HELD copying occurring in Europe not within the USrsquos reach

2) International Intellectual Propertya) World Intellectual Property Organization (WIPO)

Comparative Patent LawTHE UNITED STATESFirst to InventGrace period--Publication--Public use--Sale

Few prior user rightsNo oppositionBest mode

REST OF THE WORLDFirst to FileAbsolute Priority

More Prior User RightsPost-grant oppositionNo best mode

b) The America Invents Acti) Patent Law Reform prepare for change

2

II Trade Secrets

Information Workers Non-Disclosure Agreements (NDAs) Exit InterviewsTheoretical Basis for Trade Secrets -Property Locke sort of idea -Tort regulates through risk

of criminal and civil liability-Contract NDAs terms of employment (work for hire vs on-contract) -Unfair Competition Law anti-trust the FTC as the referee in a grand boxing match

A Defining Trade Secrets

A modicum of secrecy beyond public informationhellip

Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)Trade secret means information including a formula pattern compilation program device method technique or process that

(i) derives independent economic value1 actual or potential from not being generally known2 to and not being readily ascertainable by proper means3 by other persons who can obtain economic value from its disclosure or use and

(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy

intended to include the concept of ldquoknow-howrdquo

Torts sect 757 comment b (Restatement of the Law)1) ldquocontinuously used in onersquos businessrdquo that gives its owner (NOT single ephemeral

events)2) ldquoan opportunity to obtain an advantage over competition who do not know or use itrdquo3) so long as the information was in fact a secret

Metallurgical Industries Inc v Fourtek Inc 790 F2d 1195 ndash specs for furnace Held Zinc-recovery furnace design company who was a former employee of a

bankrupt company that initially dealt with appellants trade secrets in order to build a furnace for the appellant The court concluded that the inferences from the facts construed favorably to appellant were that appellant wished only to profit from its secrets in its business dealings not to reveal its secrets to the public

1 Indicators of Value value to plaintiffrsquos business expert testimony development costs licensing (willingness of others to pay) security costs improper acquisition (they really wanted the information) Even negative value such as the knowledge that a line of research is unfruitful counts2 The lsquogenerally knownrsquo standard refers to the subgroup of persons that would typically know such information like chemical engineers programmers and the like 3 Something is readily ascertainable is the information is available relatively easily and cheaply such as in a trade journal

3

Unfair Competition sect 39 (Restatement of the Law (Third))A trade secret is any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford an actual or potential economic advantage over others

ldquoThe definition of trade secret contains a reasonable departure from the Restatement of Torts (First) definition which required that a trade secret be continuously used in ones business The broader definition in the proposed Act extends protection to a plaintiff who has not yet had an opportunity or acquired the means to put a trade secret to use The definition includes information that has commercial value from a negative viewpoint for example the results of lengthy and expensive research which proves that a certain process will not work could be of great value to a competitor Cf Telex Corp v IBM Corp 510 F2d 894 (CA10 1975) per curiam cert dismissed 423 US 802 (1975) (liability imposed for developmental cost savings with respect to product not marketed) Because a trade secret need not be exclusive to confer a competitive advantage different independent developers can acquire rights inthe same trade secretrdquo Comments to Uniform Trade Secrets Act sect 1(4)

18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)

(a) In Generalmdash Whoever intending or knowing that the offense will benefit any foreign government foreign instrumentality or foreign agent knowinglymdash

(1) steals or without authorization appropriates takes carries away or conceals or by fraud artifice or deception obtains a trade secret

(2) without authorization copies duplicates sketches draws photographs downloads uploads alters destroys photocopies replicates transmits delivers sends mails communicates or conveys a trade secret

(3) receives buys or possesses a trade secret knowing the same to have been stolen or appropriated obtained or converted without authorization

(4) attempts to commit any offense described in any of paragraphs (1) through (3) or

(5) conspires with one or more other persons to commit any offense described in any of paragraphs (1) through (3) and one or more of such persons do any act to effect the object of the conspiracy shall except as provided in subsection (b) be fined not more than $500000 or imprisoned not more than 15 years or both

(b) Organizationsmdash Any organization that commits any offense described in subsection (a) shall be fined not more than $10000000

B Reasonable Measures

Reasonable security measures are themselves indicative of a trade secret and its value

Types of MeasuresGuidelines Trainings NDA

Passwords NDA as an element of other contractsAccess Logs Network Access

Physical Access Restrictions Cover things up (just plain cloth)ldquoneed to know basisrdquo Stamping of Documents Signage

Beware Cleaning Staff

4

Determining ReasonablenessNOT Cost Prohibitive (Posnerrsquos argument) Industry Standards

Commensurate with the Secretrsquos value Common Sense (What might actually keep the information a secret)

ldquoFacts and Circumstancesrdquo Overuse of a measure devalues its purpose

Rockwell Graphic Systems Inc v DEV (1991) ndash Summary Judgment Reasonable MeasuresHeld Summary judgment is rarely if ever appropriate for determining whether

measures were reasonableFacts Plaintiff a manufacturer of newspaper printing presses and supplier of

parts sued Defendant Corporation a competing manufacturer and defendant president a former employee of plaintiff for misappropriation of trade secrets

Reasoning the mere fact that plaintiff gave piece part drawings to vendors who made parts for plaintiff did not forfeit trade secret protection

IMAX Corp v Cinema Technologies (1998) ndash IMAX duty to protect specificationsHeld the proprietor of an IMAX movie theater had a duty to IMAX to protect

the specifications of the projector as trade secrets from a competitor who was attempting to reverse engineer the IMAX technology

C Disclosure of Trade Secrets Non-Disclosure Agreements

How Trade Secrets get out therePublishing (which destroys trade secret status) Embedded into a product on the open market (which creates the possibility of reverse

engineering) exception is computer programs because clever engineer can figure out the code (ldquodecompilingrdquo) solution is lsquoterms of agreementrsquo aka lsquoclick-wraprsquo

Independent CreationInadvertent DisclosureTo Governments for the purpose of health and safety

Warner-Lambert Pharmaceutical Co v John J Reynolds Inc (1959) ndash Royalties ListerineHeld plaintiff could not escape that obligation simply because the secret was

discovered by a third party or by the general publicFacts contract provided that inventor would receive periodic royalty payments

at specified amounts for as long as plaintiff manufactured and sold the antiseptic compound Third party leaked the information so the plaintiff wished to quit paying royalties on something that was no longer a trade secret

Reasoning the plain language of the contract defined and stipulated that the royalties would be paid independent of the contingency of disclosure

5

Residuals Clause -tactics how they are used for what purposes time lag

D Trade Secrets and Employees (Modern Mobility)

NDA and some issues-does the employee receive consideration for signing one-cannot restrict information that an employee or partner already knew

Covenants Not to Compete and some issues ReasonablenessBecause proving misappropriation can be difficult to prove Duration Geographic Scope Type of Work Restrained

1) Is the restraint no greater than necessary to protect the legitimate business interests of the employer

2) Is the restraint unduly harsh and oppressive in curtailing the employeersquos legitimate efforts to earn a livelihood

3) Is the restraint contrary to sound public policy

Washington Breach of contract damages liquidated damages and lost profit are recoverable inWashington Perry v Moran 111 Wash2d 885 766 P2d 1096 (Wash 1989)California Business amp Professions Code sect 16601 creates an exception permitting lawful non-compete agreements for company owners A new section 166025 also applies to members of limited liability companies It applies when a shareholder sells their stock to another for valuable consideration (Hilb Royal amp Hamilton Ins Services v Robb (1995) 33 CalApp4th 1812 1824-1825) The typical scenario is when a shareholder sells or disposes of their stock

Assignment of Inventions Clauses-general rule if hired for that purpose belongs to employer if not hired for that purpose then belongs to the employee but the employer has a shop right

Non-Solicitation AgreementBusiness to Business no poachingBusiness to Employee no soliciting customers for employment

Holdover Trailer Clauses

Regulations Employee Handbooks

Prevention Keep Employees Happy

6

Inevitable Disclosure ndash looking at the UTSA Section 2(a)Settlement possibility looking for other places an employee could fit in the receiving company

PepsiCo Inc v Redmond (7th Circuit) ndash ldquoInevitable Disclosurerdquo All Sport Gatorade4

Held Redmond estopped from working for Quaker Oats (maker of Gatorade)Facts Former PepsiCo employee William Redmond who left that employ to go

to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledge

Reasoning Language of UTSA Section 2(a) ldquothreatrdquo of disclosure

E Proper and Improper Means of Discovery

Misappropriation means UTSA sect 1(2)(i) acquisition of a trade secret of another by a person who knows or has reason to know that the

trade secret was acquired by improper means or

(ii) disclosure or use of a trade secret of another without express or implied consent by a person who

(A) used improper means to acquire knowledge of the trade secret or

(B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was

(I) derived from or through a person who had utilized improper means to acquire it

(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use5 or

(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use or

(C) before a material change of his [or her] position knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake

4 ldquoThe principle behind this doctrine is that an employee with knowledge of a former employerrsquos trade secrets would ldquoinevitablyrdquo disclose the same to the new employer since the nature of the new job would lead to such disclosures given that the new and old employers were competitors And given the inevitability of such disclosures the former employer was not limited to sitting around and waiting until there was an actual or even threatened use of those trade secrets before the former employer could seek legal redress Under this doctrine that former employer could prevent the employee from taking that job and prevent the new employer from hiring the employee merely because the employee had such knowledge that would ldquoinevitablyrdquo be disclosed ldquoThe doctrine which has been adopted in some but not all states finds a coherent expression in a case out of the 7th Circuit PepsiCo Inc v Redmond That case involved a former PepsiCo employee William Redmond who left that employ to go to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo The case also involved other drink beverages in which the 2 companies competed Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledgerdquo httpwwwivanhoffmancominevitablehtml

5 Smith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

7

Liability for Disclosure or Use of Anothers Trade Restatement of the Law mdash Torts sect 757One who discloses or uses anothers trade secret without a privilege to do so is liable to the other if

(a) he discovered the secret by improper means or

(b) his disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to him or

(c) he learned the secret from a third person with notice of the facts that it was a secret and that the third person discovered it by improper means or that the third persons disclosure of it was otherwise a breach of his duty to the other or

(d) he learned the secret with notice of the facts that it was a secret and that its disclosure was made to him by mistake

Improper

EI Du Pont de Nemours amp Co v Christoph er (431 F2d 1012) ndash Business MoralityHeld Standard of ldquomeans which fall below the generally accepted standards of

commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939) Du Pont at 1016Flyover though not illegal was immoral and therefore improperTime Place and Circumstances

Facts Reasonable Measures taken to cover the factory during its construction but the ROOF was not covered

Reasoning ldquoThe Supreme Court of that state has declared that the undoubted tendency of the law has been to recognize and enforce higher standards of commercial morality in the business worldrdquo No productive work to gain the knowledge (really just free-riding)

f Improper means of discovery The discovery of anothers trade secret by improper means subjects the actor to liability independently of the harm to the interest in the secret Thus if one uses physical force to take a secret formula from anothers pocket or breaks into anothers office to steal the formula his conduct is wrongful and subjects him to liability apart from the rule stated in this Section Such conduct is also an improper means of procuring the secret under this rule But HN7means may be improper under this rule even though they do not cause any other harm than that to the interest in the trade secret Examples of such means are fraudulent misrepresentations to induce disclosure tapping of telephone wires eavesdropping or other espionage A complete catalogue of improper means is not possible In general they are means which fall below the generally accepted standards of commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939)

8

Breach of ConfidentialitySmith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

Held Misappropriation because circumstances in which information was revealed gave rise to an implied duty of confidentiality

Facts Smith had a great business idea but passed away (patent applications essentially inventing modern freight practices) followed by interest to buy the business expressed by Dravo Dravo does not purpose the business but then makes similar

Reasoning NDA is not the only way to establish a confidential relationship

Proper means include AKA Defenses to Misappropriation

1 Discovery by independent invention

2 Discovery by reverse engineering that is by starting with the known product and working backward to find the method by which it was developed The acquisition of the known product must of course also be by a fair and honest means such as purchase of the item on the open market for reverse engineering to be lawful

Kadant Inc v Seeley Mach Inc (244 F Supp 2d 19 (NDNY 2003))

ldquoTrade secret law does not offer protection against discovery by so-called reverse engineering However the term reverse engineering is not a talisman that may immunize the theft of trade secrets The relevant inquiry is whether the means to obtain the alleged trade secret were proper or honest as opposed to being obtained by virtue of a confidential relationship with an employer Reverse engineering a product to determine its design specifications is therefore permissible so long as the means used to get the information necessary to reverse engineer is in the public domain and not through the confidential relationship established with the maker or owner of the productrdquo HN 38

General debate around whether parties should be allowed to contract against reverse engineering Just reverse engineer in Europe

3 Discovery under a license from the owner of the trade secret

4 Observation of the item in public use or on public display

5 Obtaining the trade secret from published literature

9

F Remedies

Injunctive ReliefAn attempt to return the trade secret holder to the position they would have been in but for the misappropriation

Preliminary or PermanentTRO Until Public Knowledge

Damages - USTAActual losses (restitution) + Defendantrsquos wrongful profits (unjust enrichment) + ongoing royalty ndash any overlap =Misappropriation Damages

Punitive Damages and Attorneysrsquo FeesWillful and Malicious may justify treble damages (likely double) as well as attorneysrsquo fees

10

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 5: Intellectual Property - Notes, Outline

I Introduction

Is the plaintiff using itrsquos IP to attack related but unprotected material-Bike Rack Selling of Parody

A Philosophical Basis for Intellectual Property

The Types of Intellectual Property-not created with a large amount of foresight-the types have large gaps where material may simply lack protection-the alternative truth is that many materials are subject to multiple protections

First Principles-IP protections too weak open piracy-IP protections too strong limiting public health aims

-Locke added value-Hegel personhood reputation good will-Utilitarianism investment order incentives-Social Planning William Fisher think of the society you want then build the framework

that will create it -A priori John Rawls from behind the veil of ignorance

- CONTROL

What deserves Intellectual Property protections-the line between Abstract Ideas and Procedures Mixtures et cetera-the bell curve example whether its students or judges

B Overview of US and international Intellectual Property Legal Systems

1) Foreign Infringementa) NTP v RIM (CAFC 2005)

i) System and Method claims(1) At least one step of the method took place in Canada(2) Email routing system

ii) Compare 35 USC 271(a) and 35 USC 271(f)(1)(1) GENERAL the infringement has to occur in the country(2) EXCEPTION an intent to infringe abroad

iii) Injunction vs Public Policy can we shut down blackberryiv) Importance of claim drafting

b) Eolas v Microsoft (CAFC 2005)i) Foreign sales

1

c) Microsoft v ATampT (US 2007)i) ldquoGolden Mastersrdquoii) In Europe they made copies of ATampTrsquos golden masteriii) HELD copying occurring in Europe not within the USrsquos reach

2) International Intellectual Propertya) World Intellectual Property Organization (WIPO)

Comparative Patent LawTHE UNITED STATESFirst to InventGrace period--Publication--Public use--Sale

Few prior user rightsNo oppositionBest mode

REST OF THE WORLDFirst to FileAbsolute Priority

More Prior User RightsPost-grant oppositionNo best mode

b) The America Invents Acti) Patent Law Reform prepare for change

2

II Trade Secrets

Information Workers Non-Disclosure Agreements (NDAs) Exit InterviewsTheoretical Basis for Trade Secrets -Property Locke sort of idea -Tort regulates through risk

of criminal and civil liability-Contract NDAs terms of employment (work for hire vs on-contract) -Unfair Competition Law anti-trust the FTC as the referee in a grand boxing match

A Defining Trade Secrets

A modicum of secrecy beyond public informationhellip

Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)Trade secret means information including a formula pattern compilation program device method technique or process that

(i) derives independent economic value1 actual or potential from not being generally known2 to and not being readily ascertainable by proper means3 by other persons who can obtain economic value from its disclosure or use and

(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy

intended to include the concept of ldquoknow-howrdquo

Torts sect 757 comment b (Restatement of the Law)1) ldquocontinuously used in onersquos businessrdquo that gives its owner (NOT single ephemeral

events)2) ldquoan opportunity to obtain an advantage over competition who do not know or use itrdquo3) so long as the information was in fact a secret

Metallurgical Industries Inc v Fourtek Inc 790 F2d 1195 ndash specs for furnace Held Zinc-recovery furnace design company who was a former employee of a

bankrupt company that initially dealt with appellants trade secrets in order to build a furnace for the appellant The court concluded that the inferences from the facts construed favorably to appellant were that appellant wished only to profit from its secrets in its business dealings not to reveal its secrets to the public

1 Indicators of Value value to plaintiffrsquos business expert testimony development costs licensing (willingness of others to pay) security costs improper acquisition (they really wanted the information) Even negative value such as the knowledge that a line of research is unfruitful counts2 The lsquogenerally knownrsquo standard refers to the subgroup of persons that would typically know such information like chemical engineers programmers and the like 3 Something is readily ascertainable is the information is available relatively easily and cheaply such as in a trade journal

3

Unfair Competition sect 39 (Restatement of the Law (Third))A trade secret is any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford an actual or potential economic advantage over others

ldquoThe definition of trade secret contains a reasonable departure from the Restatement of Torts (First) definition which required that a trade secret be continuously used in ones business The broader definition in the proposed Act extends protection to a plaintiff who has not yet had an opportunity or acquired the means to put a trade secret to use The definition includes information that has commercial value from a negative viewpoint for example the results of lengthy and expensive research which proves that a certain process will not work could be of great value to a competitor Cf Telex Corp v IBM Corp 510 F2d 894 (CA10 1975) per curiam cert dismissed 423 US 802 (1975) (liability imposed for developmental cost savings with respect to product not marketed) Because a trade secret need not be exclusive to confer a competitive advantage different independent developers can acquire rights inthe same trade secretrdquo Comments to Uniform Trade Secrets Act sect 1(4)

18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)

(a) In Generalmdash Whoever intending or knowing that the offense will benefit any foreign government foreign instrumentality or foreign agent knowinglymdash

(1) steals or without authorization appropriates takes carries away or conceals or by fraud artifice or deception obtains a trade secret

(2) without authorization copies duplicates sketches draws photographs downloads uploads alters destroys photocopies replicates transmits delivers sends mails communicates or conveys a trade secret

(3) receives buys or possesses a trade secret knowing the same to have been stolen or appropriated obtained or converted without authorization

(4) attempts to commit any offense described in any of paragraphs (1) through (3) or

(5) conspires with one or more other persons to commit any offense described in any of paragraphs (1) through (3) and one or more of such persons do any act to effect the object of the conspiracy shall except as provided in subsection (b) be fined not more than $500000 or imprisoned not more than 15 years or both

(b) Organizationsmdash Any organization that commits any offense described in subsection (a) shall be fined not more than $10000000

B Reasonable Measures

Reasonable security measures are themselves indicative of a trade secret and its value

Types of MeasuresGuidelines Trainings NDA

Passwords NDA as an element of other contractsAccess Logs Network Access

Physical Access Restrictions Cover things up (just plain cloth)ldquoneed to know basisrdquo Stamping of Documents Signage

Beware Cleaning Staff

4

Determining ReasonablenessNOT Cost Prohibitive (Posnerrsquos argument) Industry Standards

Commensurate with the Secretrsquos value Common Sense (What might actually keep the information a secret)

ldquoFacts and Circumstancesrdquo Overuse of a measure devalues its purpose

Rockwell Graphic Systems Inc v DEV (1991) ndash Summary Judgment Reasonable MeasuresHeld Summary judgment is rarely if ever appropriate for determining whether

measures were reasonableFacts Plaintiff a manufacturer of newspaper printing presses and supplier of

parts sued Defendant Corporation a competing manufacturer and defendant president a former employee of plaintiff for misappropriation of trade secrets

Reasoning the mere fact that plaintiff gave piece part drawings to vendors who made parts for plaintiff did not forfeit trade secret protection

IMAX Corp v Cinema Technologies (1998) ndash IMAX duty to protect specificationsHeld the proprietor of an IMAX movie theater had a duty to IMAX to protect

the specifications of the projector as trade secrets from a competitor who was attempting to reverse engineer the IMAX technology

C Disclosure of Trade Secrets Non-Disclosure Agreements

How Trade Secrets get out therePublishing (which destroys trade secret status) Embedded into a product on the open market (which creates the possibility of reverse

engineering) exception is computer programs because clever engineer can figure out the code (ldquodecompilingrdquo) solution is lsquoterms of agreementrsquo aka lsquoclick-wraprsquo

Independent CreationInadvertent DisclosureTo Governments for the purpose of health and safety

Warner-Lambert Pharmaceutical Co v John J Reynolds Inc (1959) ndash Royalties ListerineHeld plaintiff could not escape that obligation simply because the secret was

discovered by a third party or by the general publicFacts contract provided that inventor would receive periodic royalty payments

at specified amounts for as long as plaintiff manufactured and sold the antiseptic compound Third party leaked the information so the plaintiff wished to quit paying royalties on something that was no longer a trade secret

Reasoning the plain language of the contract defined and stipulated that the royalties would be paid independent of the contingency of disclosure

5

Residuals Clause -tactics how they are used for what purposes time lag

D Trade Secrets and Employees (Modern Mobility)

NDA and some issues-does the employee receive consideration for signing one-cannot restrict information that an employee or partner already knew

Covenants Not to Compete and some issues ReasonablenessBecause proving misappropriation can be difficult to prove Duration Geographic Scope Type of Work Restrained

1) Is the restraint no greater than necessary to protect the legitimate business interests of the employer

2) Is the restraint unduly harsh and oppressive in curtailing the employeersquos legitimate efforts to earn a livelihood

3) Is the restraint contrary to sound public policy

Washington Breach of contract damages liquidated damages and lost profit are recoverable inWashington Perry v Moran 111 Wash2d 885 766 P2d 1096 (Wash 1989)California Business amp Professions Code sect 16601 creates an exception permitting lawful non-compete agreements for company owners A new section 166025 also applies to members of limited liability companies It applies when a shareholder sells their stock to another for valuable consideration (Hilb Royal amp Hamilton Ins Services v Robb (1995) 33 CalApp4th 1812 1824-1825) The typical scenario is when a shareholder sells or disposes of their stock

Assignment of Inventions Clauses-general rule if hired for that purpose belongs to employer if not hired for that purpose then belongs to the employee but the employer has a shop right

Non-Solicitation AgreementBusiness to Business no poachingBusiness to Employee no soliciting customers for employment

Holdover Trailer Clauses

Regulations Employee Handbooks

Prevention Keep Employees Happy

6

Inevitable Disclosure ndash looking at the UTSA Section 2(a)Settlement possibility looking for other places an employee could fit in the receiving company

PepsiCo Inc v Redmond (7th Circuit) ndash ldquoInevitable Disclosurerdquo All Sport Gatorade4

Held Redmond estopped from working for Quaker Oats (maker of Gatorade)Facts Former PepsiCo employee William Redmond who left that employ to go

to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledge

Reasoning Language of UTSA Section 2(a) ldquothreatrdquo of disclosure

E Proper and Improper Means of Discovery

Misappropriation means UTSA sect 1(2)(i) acquisition of a trade secret of another by a person who knows or has reason to know that the

trade secret was acquired by improper means or

(ii) disclosure or use of a trade secret of another without express or implied consent by a person who

(A) used improper means to acquire knowledge of the trade secret or

(B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was

(I) derived from or through a person who had utilized improper means to acquire it

(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use5 or

(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use or

(C) before a material change of his [or her] position knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake

4 ldquoThe principle behind this doctrine is that an employee with knowledge of a former employerrsquos trade secrets would ldquoinevitablyrdquo disclose the same to the new employer since the nature of the new job would lead to such disclosures given that the new and old employers were competitors And given the inevitability of such disclosures the former employer was not limited to sitting around and waiting until there was an actual or even threatened use of those trade secrets before the former employer could seek legal redress Under this doctrine that former employer could prevent the employee from taking that job and prevent the new employer from hiring the employee merely because the employee had such knowledge that would ldquoinevitablyrdquo be disclosed ldquoThe doctrine which has been adopted in some but not all states finds a coherent expression in a case out of the 7th Circuit PepsiCo Inc v Redmond That case involved a former PepsiCo employee William Redmond who left that employ to go to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo The case also involved other drink beverages in which the 2 companies competed Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledgerdquo httpwwwivanhoffmancominevitablehtml

5 Smith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

7

Liability for Disclosure or Use of Anothers Trade Restatement of the Law mdash Torts sect 757One who discloses or uses anothers trade secret without a privilege to do so is liable to the other if

(a) he discovered the secret by improper means or

(b) his disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to him or

(c) he learned the secret from a third person with notice of the facts that it was a secret and that the third person discovered it by improper means or that the third persons disclosure of it was otherwise a breach of his duty to the other or

(d) he learned the secret with notice of the facts that it was a secret and that its disclosure was made to him by mistake

Improper

EI Du Pont de Nemours amp Co v Christoph er (431 F2d 1012) ndash Business MoralityHeld Standard of ldquomeans which fall below the generally accepted standards of

commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939) Du Pont at 1016Flyover though not illegal was immoral and therefore improperTime Place and Circumstances

Facts Reasonable Measures taken to cover the factory during its construction but the ROOF was not covered

Reasoning ldquoThe Supreme Court of that state has declared that the undoubted tendency of the law has been to recognize and enforce higher standards of commercial morality in the business worldrdquo No productive work to gain the knowledge (really just free-riding)

f Improper means of discovery The discovery of anothers trade secret by improper means subjects the actor to liability independently of the harm to the interest in the secret Thus if one uses physical force to take a secret formula from anothers pocket or breaks into anothers office to steal the formula his conduct is wrongful and subjects him to liability apart from the rule stated in this Section Such conduct is also an improper means of procuring the secret under this rule But HN7means may be improper under this rule even though they do not cause any other harm than that to the interest in the trade secret Examples of such means are fraudulent misrepresentations to induce disclosure tapping of telephone wires eavesdropping or other espionage A complete catalogue of improper means is not possible In general they are means which fall below the generally accepted standards of commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939)

8

Breach of ConfidentialitySmith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

Held Misappropriation because circumstances in which information was revealed gave rise to an implied duty of confidentiality

Facts Smith had a great business idea but passed away (patent applications essentially inventing modern freight practices) followed by interest to buy the business expressed by Dravo Dravo does not purpose the business but then makes similar

Reasoning NDA is not the only way to establish a confidential relationship

Proper means include AKA Defenses to Misappropriation

1 Discovery by independent invention

2 Discovery by reverse engineering that is by starting with the known product and working backward to find the method by which it was developed The acquisition of the known product must of course also be by a fair and honest means such as purchase of the item on the open market for reverse engineering to be lawful

Kadant Inc v Seeley Mach Inc (244 F Supp 2d 19 (NDNY 2003))

ldquoTrade secret law does not offer protection against discovery by so-called reverse engineering However the term reverse engineering is not a talisman that may immunize the theft of trade secrets The relevant inquiry is whether the means to obtain the alleged trade secret were proper or honest as opposed to being obtained by virtue of a confidential relationship with an employer Reverse engineering a product to determine its design specifications is therefore permissible so long as the means used to get the information necessary to reverse engineer is in the public domain and not through the confidential relationship established with the maker or owner of the productrdquo HN 38

General debate around whether parties should be allowed to contract against reverse engineering Just reverse engineer in Europe

3 Discovery under a license from the owner of the trade secret

4 Observation of the item in public use or on public display

5 Obtaining the trade secret from published literature

9

F Remedies

Injunctive ReliefAn attempt to return the trade secret holder to the position they would have been in but for the misappropriation

Preliminary or PermanentTRO Until Public Knowledge

Damages - USTAActual losses (restitution) + Defendantrsquos wrongful profits (unjust enrichment) + ongoing royalty ndash any overlap =Misappropriation Damages

Punitive Damages and Attorneysrsquo FeesWillful and Malicious may justify treble damages (likely double) as well as attorneysrsquo fees

10

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 6: Intellectual Property - Notes, Outline

c) Microsoft v ATampT (US 2007)i) ldquoGolden Mastersrdquoii) In Europe they made copies of ATampTrsquos golden masteriii) HELD copying occurring in Europe not within the USrsquos reach

2) International Intellectual Propertya) World Intellectual Property Organization (WIPO)

Comparative Patent LawTHE UNITED STATESFirst to InventGrace period--Publication--Public use--Sale

Few prior user rightsNo oppositionBest mode

REST OF THE WORLDFirst to FileAbsolute Priority

More Prior User RightsPost-grant oppositionNo best mode

b) The America Invents Acti) Patent Law Reform prepare for change

2

II Trade Secrets

Information Workers Non-Disclosure Agreements (NDAs) Exit InterviewsTheoretical Basis for Trade Secrets -Property Locke sort of idea -Tort regulates through risk

of criminal and civil liability-Contract NDAs terms of employment (work for hire vs on-contract) -Unfair Competition Law anti-trust the FTC as the referee in a grand boxing match

A Defining Trade Secrets

A modicum of secrecy beyond public informationhellip

Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)Trade secret means information including a formula pattern compilation program device method technique or process that

(i) derives independent economic value1 actual or potential from not being generally known2 to and not being readily ascertainable by proper means3 by other persons who can obtain economic value from its disclosure or use and

(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy

intended to include the concept of ldquoknow-howrdquo

Torts sect 757 comment b (Restatement of the Law)1) ldquocontinuously used in onersquos businessrdquo that gives its owner (NOT single ephemeral

events)2) ldquoan opportunity to obtain an advantage over competition who do not know or use itrdquo3) so long as the information was in fact a secret

Metallurgical Industries Inc v Fourtek Inc 790 F2d 1195 ndash specs for furnace Held Zinc-recovery furnace design company who was a former employee of a

bankrupt company that initially dealt with appellants trade secrets in order to build a furnace for the appellant The court concluded that the inferences from the facts construed favorably to appellant were that appellant wished only to profit from its secrets in its business dealings not to reveal its secrets to the public

1 Indicators of Value value to plaintiffrsquos business expert testimony development costs licensing (willingness of others to pay) security costs improper acquisition (they really wanted the information) Even negative value such as the knowledge that a line of research is unfruitful counts2 The lsquogenerally knownrsquo standard refers to the subgroup of persons that would typically know such information like chemical engineers programmers and the like 3 Something is readily ascertainable is the information is available relatively easily and cheaply such as in a trade journal

3

Unfair Competition sect 39 (Restatement of the Law (Third))A trade secret is any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford an actual or potential economic advantage over others

ldquoThe definition of trade secret contains a reasonable departure from the Restatement of Torts (First) definition which required that a trade secret be continuously used in ones business The broader definition in the proposed Act extends protection to a plaintiff who has not yet had an opportunity or acquired the means to put a trade secret to use The definition includes information that has commercial value from a negative viewpoint for example the results of lengthy and expensive research which proves that a certain process will not work could be of great value to a competitor Cf Telex Corp v IBM Corp 510 F2d 894 (CA10 1975) per curiam cert dismissed 423 US 802 (1975) (liability imposed for developmental cost savings with respect to product not marketed) Because a trade secret need not be exclusive to confer a competitive advantage different independent developers can acquire rights inthe same trade secretrdquo Comments to Uniform Trade Secrets Act sect 1(4)

18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)

(a) In Generalmdash Whoever intending or knowing that the offense will benefit any foreign government foreign instrumentality or foreign agent knowinglymdash

(1) steals or without authorization appropriates takes carries away or conceals or by fraud artifice or deception obtains a trade secret

(2) without authorization copies duplicates sketches draws photographs downloads uploads alters destroys photocopies replicates transmits delivers sends mails communicates or conveys a trade secret

(3) receives buys or possesses a trade secret knowing the same to have been stolen or appropriated obtained or converted without authorization

(4) attempts to commit any offense described in any of paragraphs (1) through (3) or

(5) conspires with one or more other persons to commit any offense described in any of paragraphs (1) through (3) and one or more of such persons do any act to effect the object of the conspiracy shall except as provided in subsection (b) be fined not more than $500000 or imprisoned not more than 15 years or both

(b) Organizationsmdash Any organization that commits any offense described in subsection (a) shall be fined not more than $10000000

B Reasonable Measures

Reasonable security measures are themselves indicative of a trade secret and its value

Types of MeasuresGuidelines Trainings NDA

Passwords NDA as an element of other contractsAccess Logs Network Access

Physical Access Restrictions Cover things up (just plain cloth)ldquoneed to know basisrdquo Stamping of Documents Signage

Beware Cleaning Staff

4

Determining ReasonablenessNOT Cost Prohibitive (Posnerrsquos argument) Industry Standards

Commensurate with the Secretrsquos value Common Sense (What might actually keep the information a secret)

ldquoFacts and Circumstancesrdquo Overuse of a measure devalues its purpose

Rockwell Graphic Systems Inc v DEV (1991) ndash Summary Judgment Reasonable MeasuresHeld Summary judgment is rarely if ever appropriate for determining whether

measures were reasonableFacts Plaintiff a manufacturer of newspaper printing presses and supplier of

parts sued Defendant Corporation a competing manufacturer and defendant president a former employee of plaintiff for misappropriation of trade secrets

Reasoning the mere fact that plaintiff gave piece part drawings to vendors who made parts for plaintiff did not forfeit trade secret protection

IMAX Corp v Cinema Technologies (1998) ndash IMAX duty to protect specificationsHeld the proprietor of an IMAX movie theater had a duty to IMAX to protect

the specifications of the projector as trade secrets from a competitor who was attempting to reverse engineer the IMAX technology

C Disclosure of Trade Secrets Non-Disclosure Agreements

How Trade Secrets get out therePublishing (which destroys trade secret status) Embedded into a product on the open market (which creates the possibility of reverse

engineering) exception is computer programs because clever engineer can figure out the code (ldquodecompilingrdquo) solution is lsquoterms of agreementrsquo aka lsquoclick-wraprsquo

Independent CreationInadvertent DisclosureTo Governments for the purpose of health and safety

Warner-Lambert Pharmaceutical Co v John J Reynolds Inc (1959) ndash Royalties ListerineHeld plaintiff could not escape that obligation simply because the secret was

discovered by a third party or by the general publicFacts contract provided that inventor would receive periodic royalty payments

at specified amounts for as long as plaintiff manufactured and sold the antiseptic compound Third party leaked the information so the plaintiff wished to quit paying royalties on something that was no longer a trade secret

Reasoning the plain language of the contract defined and stipulated that the royalties would be paid independent of the contingency of disclosure

5

Residuals Clause -tactics how they are used for what purposes time lag

D Trade Secrets and Employees (Modern Mobility)

NDA and some issues-does the employee receive consideration for signing one-cannot restrict information that an employee or partner already knew

Covenants Not to Compete and some issues ReasonablenessBecause proving misappropriation can be difficult to prove Duration Geographic Scope Type of Work Restrained

1) Is the restraint no greater than necessary to protect the legitimate business interests of the employer

2) Is the restraint unduly harsh and oppressive in curtailing the employeersquos legitimate efforts to earn a livelihood

3) Is the restraint contrary to sound public policy

Washington Breach of contract damages liquidated damages and lost profit are recoverable inWashington Perry v Moran 111 Wash2d 885 766 P2d 1096 (Wash 1989)California Business amp Professions Code sect 16601 creates an exception permitting lawful non-compete agreements for company owners A new section 166025 also applies to members of limited liability companies It applies when a shareholder sells their stock to another for valuable consideration (Hilb Royal amp Hamilton Ins Services v Robb (1995) 33 CalApp4th 1812 1824-1825) The typical scenario is when a shareholder sells or disposes of their stock

Assignment of Inventions Clauses-general rule if hired for that purpose belongs to employer if not hired for that purpose then belongs to the employee but the employer has a shop right

Non-Solicitation AgreementBusiness to Business no poachingBusiness to Employee no soliciting customers for employment

Holdover Trailer Clauses

Regulations Employee Handbooks

Prevention Keep Employees Happy

6

Inevitable Disclosure ndash looking at the UTSA Section 2(a)Settlement possibility looking for other places an employee could fit in the receiving company

PepsiCo Inc v Redmond (7th Circuit) ndash ldquoInevitable Disclosurerdquo All Sport Gatorade4

Held Redmond estopped from working for Quaker Oats (maker of Gatorade)Facts Former PepsiCo employee William Redmond who left that employ to go

to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledge

Reasoning Language of UTSA Section 2(a) ldquothreatrdquo of disclosure

E Proper and Improper Means of Discovery

Misappropriation means UTSA sect 1(2)(i) acquisition of a trade secret of another by a person who knows or has reason to know that the

trade secret was acquired by improper means or

(ii) disclosure or use of a trade secret of another without express or implied consent by a person who

(A) used improper means to acquire knowledge of the trade secret or

(B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was

(I) derived from or through a person who had utilized improper means to acquire it

(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use5 or

(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use or

(C) before a material change of his [or her] position knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake

4 ldquoThe principle behind this doctrine is that an employee with knowledge of a former employerrsquos trade secrets would ldquoinevitablyrdquo disclose the same to the new employer since the nature of the new job would lead to such disclosures given that the new and old employers were competitors And given the inevitability of such disclosures the former employer was not limited to sitting around and waiting until there was an actual or even threatened use of those trade secrets before the former employer could seek legal redress Under this doctrine that former employer could prevent the employee from taking that job and prevent the new employer from hiring the employee merely because the employee had such knowledge that would ldquoinevitablyrdquo be disclosed ldquoThe doctrine which has been adopted in some but not all states finds a coherent expression in a case out of the 7th Circuit PepsiCo Inc v Redmond That case involved a former PepsiCo employee William Redmond who left that employ to go to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo The case also involved other drink beverages in which the 2 companies competed Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledgerdquo httpwwwivanhoffmancominevitablehtml

5 Smith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

7

Liability for Disclosure or Use of Anothers Trade Restatement of the Law mdash Torts sect 757One who discloses or uses anothers trade secret without a privilege to do so is liable to the other if

(a) he discovered the secret by improper means or

(b) his disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to him or

(c) he learned the secret from a third person with notice of the facts that it was a secret and that the third person discovered it by improper means or that the third persons disclosure of it was otherwise a breach of his duty to the other or

(d) he learned the secret with notice of the facts that it was a secret and that its disclosure was made to him by mistake

Improper

EI Du Pont de Nemours amp Co v Christoph er (431 F2d 1012) ndash Business MoralityHeld Standard of ldquomeans which fall below the generally accepted standards of

commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939) Du Pont at 1016Flyover though not illegal was immoral and therefore improperTime Place and Circumstances

Facts Reasonable Measures taken to cover the factory during its construction but the ROOF was not covered

Reasoning ldquoThe Supreme Court of that state has declared that the undoubted tendency of the law has been to recognize and enforce higher standards of commercial morality in the business worldrdquo No productive work to gain the knowledge (really just free-riding)

f Improper means of discovery The discovery of anothers trade secret by improper means subjects the actor to liability independently of the harm to the interest in the secret Thus if one uses physical force to take a secret formula from anothers pocket or breaks into anothers office to steal the formula his conduct is wrongful and subjects him to liability apart from the rule stated in this Section Such conduct is also an improper means of procuring the secret under this rule But HN7means may be improper under this rule even though they do not cause any other harm than that to the interest in the trade secret Examples of such means are fraudulent misrepresentations to induce disclosure tapping of telephone wires eavesdropping or other espionage A complete catalogue of improper means is not possible In general they are means which fall below the generally accepted standards of commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939)

8

Breach of ConfidentialitySmith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

Held Misappropriation because circumstances in which information was revealed gave rise to an implied duty of confidentiality

Facts Smith had a great business idea but passed away (patent applications essentially inventing modern freight practices) followed by interest to buy the business expressed by Dravo Dravo does not purpose the business but then makes similar

Reasoning NDA is not the only way to establish a confidential relationship

Proper means include AKA Defenses to Misappropriation

1 Discovery by independent invention

2 Discovery by reverse engineering that is by starting with the known product and working backward to find the method by which it was developed The acquisition of the known product must of course also be by a fair and honest means such as purchase of the item on the open market for reverse engineering to be lawful

Kadant Inc v Seeley Mach Inc (244 F Supp 2d 19 (NDNY 2003))

ldquoTrade secret law does not offer protection against discovery by so-called reverse engineering However the term reverse engineering is not a talisman that may immunize the theft of trade secrets The relevant inquiry is whether the means to obtain the alleged trade secret were proper or honest as opposed to being obtained by virtue of a confidential relationship with an employer Reverse engineering a product to determine its design specifications is therefore permissible so long as the means used to get the information necessary to reverse engineer is in the public domain and not through the confidential relationship established with the maker or owner of the productrdquo HN 38

General debate around whether parties should be allowed to contract against reverse engineering Just reverse engineer in Europe

3 Discovery under a license from the owner of the trade secret

4 Observation of the item in public use or on public display

5 Obtaining the trade secret from published literature

9

F Remedies

Injunctive ReliefAn attempt to return the trade secret holder to the position they would have been in but for the misappropriation

Preliminary or PermanentTRO Until Public Knowledge

Damages - USTAActual losses (restitution) + Defendantrsquos wrongful profits (unjust enrichment) + ongoing royalty ndash any overlap =Misappropriation Damages

Punitive Damages and Attorneysrsquo FeesWillful and Malicious may justify treble damages (likely double) as well as attorneysrsquo fees

10

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 7: Intellectual Property - Notes, Outline

II Trade Secrets

Information Workers Non-Disclosure Agreements (NDAs) Exit InterviewsTheoretical Basis for Trade Secrets -Property Locke sort of idea -Tort regulates through risk

of criminal and civil liability-Contract NDAs terms of employment (work for hire vs on-contract) -Unfair Competition Law anti-trust the FTC as the referee in a grand boxing match

A Defining Trade Secrets

A modicum of secrecy beyond public informationhellip

Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)Trade secret means information including a formula pattern compilation program device method technique or process that

(i) derives independent economic value1 actual or potential from not being generally known2 to and not being readily ascertainable by proper means3 by other persons who can obtain economic value from its disclosure or use and

(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy

intended to include the concept of ldquoknow-howrdquo

Torts sect 757 comment b (Restatement of the Law)1) ldquocontinuously used in onersquos businessrdquo that gives its owner (NOT single ephemeral

events)2) ldquoan opportunity to obtain an advantage over competition who do not know or use itrdquo3) so long as the information was in fact a secret

Metallurgical Industries Inc v Fourtek Inc 790 F2d 1195 ndash specs for furnace Held Zinc-recovery furnace design company who was a former employee of a

bankrupt company that initially dealt with appellants trade secrets in order to build a furnace for the appellant The court concluded that the inferences from the facts construed favorably to appellant were that appellant wished only to profit from its secrets in its business dealings not to reveal its secrets to the public

1 Indicators of Value value to plaintiffrsquos business expert testimony development costs licensing (willingness of others to pay) security costs improper acquisition (they really wanted the information) Even negative value such as the knowledge that a line of research is unfruitful counts2 The lsquogenerally knownrsquo standard refers to the subgroup of persons that would typically know such information like chemical engineers programmers and the like 3 Something is readily ascertainable is the information is available relatively easily and cheaply such as in a trade journal

3

Unfair Competition sect 39 (Restatement of the Law (Third))A trade secret is any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford an actual or potential economic advantage over others

ldquoThe definition of trade secret contains a reasonable departure from the Restatement of Torts (First) definition which required that a trade secret be continuously used in ones business The broader definition in the proposed Act extends protection to a plaintiff who has not yet had an opportunity or acquired the means to put a trade secret to use The definition includes information that has commercial value from a negative viewpoint for example the results of lengthy and expensive research which proves that a certain process will not work could be of great value to a competitor Cf Telex Corp v IBM Corp 510 F2d 894 (CA10 1975) per curiam cert dismissed 423 US 802 (1975) (liability imposed for developmental cost savings with respect to product not marketed) Because a trade secret need not be exclusive to confer a competitive advantage different independent developers can acquire rights inthe same trade secretrdquo Comments to Uniform Trade Secrets Act sect 1(4)

18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)

(a) In Generalmdash Whoever intending or knowing that the offense will benefit any foreign government foreign instrumentality or foreign agent knowinglymdash

(1) steals or without authorization appropriates takes carries away or conceals or by fraud artifice or deception obtains a trade secret

(2) without authorization copies duplicates sketches draws photographs downloads uploads alters destroys photocopies replicates transmits delivers sends mails communicates or conveys a trade secret

(3) receives buys or possesses a trade secret knowing the same to have been stolen or appropriated obtained or converted without authorization

(4) attempts to commit any offense described in any of paragraphs (1) through (3) or

(5) conspires with one or more other persons to commit any offense described in any of paragraphs (1) through (3) and one or more of such persons do any act to effect the object of the conspiracy shall except as provided in subsection (b) be fined not more than $500000 or imprisoned not more than 15 years or both

(b) Organizationsmdash Any organization that commits any offense described in subsection (a) shall be fined not more than $10000000

B Reasonable Measures

Reasonable security measures are themselves indicative of a trade secret and its value

Types of MeasuresGuidelines Trainings NDA

Passwords NDA as an element of other contractsAccess Logs Network Access

Physical Access Restrictions Cover things up (just plain cloth)ldquoneed to know basisrdquo Stamping of Documents Signage

Beware Cleaning Staff

4

Determining ReasonablenessNOT Cost Prohibitive (Posnerrsquos argument) Industry Standards

Commensurate with the Secretrsquos value Common Sense (What might actually keep the information a secret)

ldquoFacts and Circumstancesrdquo Overuse of a measure devalues its purpose

Rockwell Graphic Systems Inc v DEV (1991) ndash Summary Judgment Reasonable MeasuresHeld Summary judgment is rarely if ever appropriate for determining whether

measures were reasonableFacts Plaintiff a manufacturer of newspaper printing presses and supplier of

parts sued Defendant Corporation a competing manufacturer and defendant president a former employee of plaintiff for misappropriation of trade secrets

Reasoning the mere fact that plaintiff gave piece part drawings to vendors who made parts for plaintiff did not forfeit trade secret protection

IMAX Corp v Cinema Technologies (1998) ndash IMAX duty to protect specificationsHeld the proprietor of an IMAX movie theater had a duty to IMAX to protect

the specifications of the projector as trade secrets from a competitor who was attempting to reverse engineer the IMAX technology

C Disclosure of Trade Secrets Non-Disclosure Agreements

How Trade Secrets get out therePublishing (which destroys trade secret status) Embedded into a product on the open market (which creates the possibility of reverse

engineering) exception is computer programs because clever engineer can figure out the code (ldquodecompilingrdquo) solution is lsquoterms of agreementrsquo aka lsquoclick-wraprsquo

Independent CreationInadvertent DisclosureTo Governments for the purpose of health and safety

Warner-Lambert Pharmaceutical Co v John J Reynolds Inc (1959) ndash Royalties ListerineHeld plaintiff could not escape that obligation simply because the secret was

discovered by a third party or by the general publicFacts contract provided that inventor would receive periodic royalty payments

at specified amounts for as long as plaintiff manufactured and sold the antiseptic compound Third party leaked the information so the plaintiff wished to quit paying royalties on something that was no longer a trade secret

Reasoning the plain language of the contract defined and stipulated that the royalties would be paid independent of the contingency of disclosure

5

Residuals Clause -tactics how they are used for what purposes time lag

D Trade Secrets and Employees (Modern Mobility)

NDA and some issues-does the employee receive consideration for signing one-cannot restrict information that an employee or partner already knew

Covenants Not to Compete and some issues ReasonablenessBecause proving misappropriation can be difficult to prove Duration Geographic Scope Type of Work Restrained

1) Is the restraint no greater than necessary to protect the legitimate business interests of the employer

2) Is the restraint unduly harsh and oppressive in curtailing the employeersquos legitimate efforts to earn a livelihood

3) Is the restraint contrary to sound public policy

Washington Breach of contract damages liquidated damages and lost profit are recoverable inWashington Perry v Moran 111 Wash2d 885 766 P2d 1096 (Wash 1989)California Business amp Professions Code sect 16601 creates an exception permitting lawful non-compete agreements for company owners A new section 166025 also applies to members of limited liability companies It applies when a shareholder sells their stock to another for valuable consideration (Hilb Royal amp Hamilton Ins Services v Robb (1995) 33 CalApp4th 1812 1824-1825) The typical scenario is when a shareholder sells or disposes of their stock

Assignment of Inventions Clauses-general rule if hired for that purpose belongs to employer if not hired for that purpose then belongs to the employee but the employer has a shop right

Non-Solicitation AgreementBusiness to Business no poachingBusiness to Employee no soliciting customers for employment

Holdover Trailer Clauses

Regulations Employee Handbooks

Prevention Keep Employees Happy

6

Inevitable Disclosure ndash looking at the UTSA Section 2(a)Settlement possibility looking for other places an employee could fit in the receiving company

PepsiCo Inc v Redmond (7th Circuit) ndash ldquoInevitable Disclosurerdquo All Sport Gatorade4

Held Redmond estopped from working for Quaker Oats (maker of Gatorade)Facts Former PepsiCo employee William Redmond who left that employ to go

to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledge

Reasoning Language of UTSA Section 2(a) ldquothreatrdquo of disclosure

E Proper and Improper Means of Discovery

Misappropriation means UTSA sect 1(2)(i) acquisition of a trade secret of another by a person who knows or has reason to know that the

trade secret was acquired by improper means or

(ii) disclosure or use of a trade secret of another without express or implied consent by a person who

(A) used improper means to acquire knowledge of the trade secret or

(B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was

(I) derived from or through a person who had utilized improper means to acquire it

(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use5 or

(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use or

(C) before a material change of his [or her] position knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake

4 ldquoThe principle behind this doctrine is that an employee with knowledge of a former employerrsquos trade secrets would ldquoinevitablyrdquo disclose the same to the new employer since the nature of the new job would lead to such disclosures given that the new and old employers were competitors And given the inevitability of such disclosures the former employer was not limited to sitting around and waiting until there was an actual or even threatened use of those trade secrets before the former employer could seek legal redress Under this doctrine that former employer could prevent the employee from taking that job and prevent the new employer from hiring the employee merely because the employee had such knowledge that would ldquoinevitablyrdquo be disclosed ldquoThe doctrine which has been adopted in some but not all states finds a coherent expression in a case out of the 7th Circuit PepsiCo Inc v Redmond That case involved a former PepsiCo employee William Redmond who left that employ to go to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo The case also involved other drink beverages in which the 2 companies competed Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledgerdquo httpwwwivanhoffmancominevitablehtml

5 Smith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

7

Liability for Disclosure or Use of Anothers Trade Restatement of the Law mdash Torts sect 757One who discloses or uses anothers trade secret without a privilege to do so is liable to the other if

(a) he discovered the secret by improper means or

(b) his disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to him or

(c) he learned the secret from a third person with notice of the facts that it was a secret and that the third person discovered it by improper means or that the third persons disclosure of it was otherwise a breach of his duty to the other or

(d) he learned the secret with notice of the facts that it was a secret and that its disclosure was made to him by mistake

Improper

EI Du Pont de Nemours amp Co v Christoph er (431 F2d 1012) ndash Business MoralityHeld Standard of ldquomeans which fall below the generally accepted standards of

commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939) Du Pont at 1016Flyover though not illegal was immoral and therefore improperTime Place and Circumstances

Facts Reasonable Measures taken to cover the factory during its construction but the ROOF was not covered

Reasoning ldquoThe Supreme Court of that state has declared that the undoubted tendency of the law has been to recognize and enforce higher standards of commercial morality in the business worldrdquo No productive work to gain the knowledge (really just free-riding)

f Improper means of discovery The discovery of anothers trade secret by improper means subjects the actor to liability independently of the harm to the interest in the secret Thus if one uses physical force to take a secret formula from anothers pocket or breaks into anothers office to steal the formula his conduct is wrongful and subjects him to liability apart from the rule stated in this Section Such conduct is also an improper means of procuring the secret under this rule But HN7means may be improper under this rule even though they do not cause any other harm than that to the interest in the trade secret Examples of such means are fraudulent misrepresentations to induce disclosure tapping of telephone wires eavesdropping or other espionage A complete catalogue of improper means is not possible In general they are means which fall below the generally accepted standards of commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939)

8

Breach of ConfidentialitySmith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

Held Misappropriation because circumstances in which information was revealed gave rise to an implied duty of confidentiality

Facts Smith had a great business idea but passed away (patent applications essentially inventing modern freight practices) followed by interest to buy the business expressed by Dravo Dravo does not purpose the business but then makes similar

Reasoning NDA is not the only way to establish a confidential relationship

Proper means include AKA Defenses to Misappropriation

1 Discovery by independent invention

2 Discovery by reverse engineering that is by starting with the known product and working backward to find the method by which it was developed The acquisition of the known product must of course also be by a fair and honest means such as purchase of the item on the open market for reverse engineering to be lawful

Kadant Inc v Seeley Mach Inc (244 F Supp 2d 19 (NDNY 2003))

ldquoTrade secret law does not offer protection against discovery by so-called reverse engineering However the term reverse engineering is not a talisman that may immunize the theft of trade secrets The relevant inquiry is whether the means to obtain the alleged trade secret were proper or honest as opposed to being obtained by virtue of a confidential relationship with an employer Reverse engineering a product to determine its design specifications is therefore permissible so long as the means used to get the information necessary to reverse engineer is in the public domain and not through the confidential relationship established with the maker or owner of the productrdquo HN 38

General debate around whether parties should be allowed to contract against reverse engineering Just reverse engineer in Europe

3 Discovery under a license from the owner of the trade secret

4 Observation of the item in public use or on public display

5 Obtaining the trade secret from published literature

9

F Remedies

Injunctive ReliefAn attempt to return the trade secret holder to the position they would have been in but for the misappropriation

Preliminary or PermanentTRO Until Public Knowledge

Damages - USTAActual losses (restitution) + Defendantrsquos wrongful profits (unjust enrichment) + ongoing royalty ndash any overlap =Misappropriation Damages

Punitive Damages and Attorneysrsquo FeesWillful and Malicious may justify treble damages (likely double) as well as attorneysrsquo fees

10

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 8: Intellectual Property - Notes, Outline

Unfair Competition sect 39 (Restatement of the Law (Third))A trade secret is any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford an actual or potential economic advantage over others

ldquoThe definition of trade secret contains a reasonable departure from the Restatement of Torts (First) definition which required that a trade secret be continuously used in ones business The broader definition in the proposed Act extends protection to a plaintiff who has not yet had an opportunity or acquired the means to put a trade secret to use The definition includes information that has commercial value from a negative viewpoint for example the results of lengthy and expensive research which proves that a certain process will not work could be of great value to a competitor Cf Telex Corp v IBM Corp 510 F2d 894 (CA10 1975) per curiam cert dismissed 423 US 802 (1975) (liability imposed for developmental cost savings with respect to product not marketed) Because a trade secret need not be exclusive to confer a competitive advantage different independent developers can acquire rights inthe same trade secretrdquo Comments to Uniform Trade Secrets Act sect 1(4)

18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)

(a) In Generalmdash Whoever intending or knowing that the offense will benefit any foreign government foreign instrumentality or foreign agent knowinglymdash

(1) steals or without authorization appropriates takes carries away or conceals or by fraud artifice or deception obtains a trade secret

(2) without authorization copies duplicates sketches draws photographs downloads uploads alters destroys photocopies replicates transmits delivers sends mails communicates or conveys a trade secret

(3) receives buys or possesses a trade secret knowing the same to have been stolen or appropriated obtained or converted without authorization

(4) attempts to commit any offense described in any of paragraphs (1) through (3) or

(5) conspires with one or more other persons to commit any offense described in any of paragraphs (1) through (3) and one or more of such persons do any act to effect the object of the conspiracy shall except as provided in subsection (b) be fined not more than $500000 or imprisoned not more than 15 years or both

(b) Organizationsmdash Any organization that commits any offense described in subsection (a) shall be fined not more than $10000000

B Reasonable Measures

Reasonable security measures are themselves indicative of a trade secret and its value

Types of MeasuresGuidelines Trainings NDA

Passwords NDA as an element of other contractsAccess Logs Network Access

Physical Access Restrictions Cover things up (just plain cloth)ldquoneed to know basisrdquo Stamping of Documents Signage

Beware Cleaning Staff

4

Determining ReasonablenessNOT Cost Prohibitive (Posnerrsquos argument) Industry Standards

Commensurate with the Secretrsquos value Common Sense (What might actually keep the information a secret)

ldquoFacts and Circumstancesrdquo Overuse of a measure devalues its purpose

Rockwell Graphic Systems Inc v DEV (1991) ndash Summary Judgment Reasonable MeasuresHeld Summary judgment is rarely if ever appropriate for determining whether

measures were reasonableFacts Plaintiff a manufacturer of newspaper printing presses and supplier of

parts sued Defendant Corporation a competing manufacturer and defendant president a former employee of plaintiff for misappropriation of trade secrets

Reasoning the mere fact that plaintiff gave piece part drawings to vendors who made parts for plaintiff did not forfeit trade secret protection

IMAX Corp v Cinema Technologies (1998) ndash IMAX duty to protect specificationsHeld the proprietor of an IMAX movie theater had a duty to IMAX to protect

the specifications of the projector as trade secrets from a competitor who was attempting to reverse engineer the IMAX technology

C Disclosure of Trade Secrets Non-Disclosure Agreements

How Trade Secrets get out therePublishing (which destroys trade secret status) Embedded into a product on the open market (which creates the possibility of reverse

engineering) exception is computer programs because clever engineer can figure out the code (ldquodecompilingrdquo) solution is lsquoterms of agreementrsquo aka lsquoclick-wraprsquo

Independent CreationInadvertent DisclosureTo Governments for the purpose of health and safety

Warner-Lambert Pharmaceutical Co v John J Reynolds Inc (1959) ndash Royalties ListerineHeld plaintiff could not escape that obligation simply because the secret was

discovered by a third party or by the general publicFacts contract provided that inventor would receive periodic royalty payments

at specified amounts for as long as plaintiff manufactured and sold the antiseptic compound Third party leaked the information so the plaintiff wished to quit paying royalties on something that was no longer a trade secret

Reasoning the plain language of the contract defined and stipulated that the royalties would be paid independent of the contingency of disclosure

5

Residuals Clause -tactics how they are used for what purposes time lag

D Trade Secrets and Employees (Modern Mobility)

NDA and some issues-does the employee receive consideration for signing one-cannot restrict information that an employee or partner already knew

Covenants Not to Compete and some issues ReasonablenessBecause proving misappropriation can be difficult to prove Duration Geographic Scope Type of Work Restrained

1) Is the restraint no greater than necessary to protect the legitimate business interests of the employer

2) Is the restraint unduly harsh and oppressive in curtailing the employeersquos legitimate efforts to earn a livelihood

3) Is the restraint contrary to sound public policy

Washington Breach of contract damages liquidated damages and lost profit are recoverable inWashington Perry v Moran 111 Wash2d 885 766 P2d 1096 (Wash 1989)California Business amp Professions Code sect 16601 creates an exception permitting lawful non-compete agreements for company owners A new section 166025 also applies to members of limited liability companies It applies when a shareholder sells their stock to another for valuable consideration (Hilb Royal amp Hamilton Ins Services v Robb (1995) 33 CalApp4th 1812 1824-1825) The typical scenario is when a shareholder sells or disposes of their stock

Assignment of Inventions Clauses-general rule if hired for that purpose belongs to employer if not hired for that purpose then belongs to the employee but the employer has a shop right

Non-Solicitation AgreementBusiness to Business no poachingBusiness to Employee no soliciting customers for employment

Holdover Trailer Clauses

Regulations Employee Handbooks

Prevention Keep Employees Happy

6

Inevitable Disclosure ndash looking at the UTSA Section 2(a)Settlement possibility looking for other places an employee could fit in the receiving company

PepsiCo Inc v Redmond (7th Circuit) ndash ldquoInevitable Disclosurerdquo All Sport Gatorade4

Held Redmond estopped from working for Quaker Oats (maker of Gatorade)Facts Former PepsiCo employee William Redmond who left that employ to go

to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledge

Reasoning Language of UTSA Section 2(a) ldquothreatrdquo of disclosure

E Proper and Improper Means of Discovery

Misappropriation means UTSA sect 1(2)(i) acquisition of a trade secret of another by a person who knows or has reason to know that the

trade secret was acquired by improper means or

(ii) disclosure or use of a trade secret of another without express or implied consent by a person who

(A) used improper means to acquire knowledge of the trade secret or

(B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was

(I) derived from or through a person who had utilized improper means to acquire it

(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use5 or

(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use or

(C) before a material change of his [or her] position knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake

4 ldquoThe principle behind this doctrine is that an employee with knowledge of a former employerrsquos trade secrets would ldquoinevitablyrdquo disclose the same to the new employer since the nature of the new job would lead to such disclosures given that the new and old employers were competitors And given the inevitability of such disclosures the former employer was not limited to sitting around and waiting until there was an actual or even threatened use of those trade secrets before the former employer could seek legal redress Under this doctrine that former employer could prevent the employee from taking that job and prevent the new employer from hiring the employee merely because the employee had such knowledge that would ldquoinevitablyrdquo be disclosed ldquoThe doctrine which has been adopted in some but not all states finds a coherent expression in a case out of the 7th Circuit PepsiCo Inc v Redmond That case involved a former PepsiCo employee William Redmond who left that employ to go to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo The case also involved other drink beverages in which the 2 companies competed Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledgerdquo httpwwwivanhoffmancominevitablehtml

5 Smith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

7

Liability for Disclosure or Use of Anothers Trade Restatement of the Law mdash Torts sect 757One who discloses or uses anothers trade secret without a privilege to do so is liable to the other if

(a) he discovered the secret by improper means or

(b) his disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to him or

(c) he learned the secret from a third person with notice of the facts that it was a secret and that the third person discovered it by improper means or that the third persons disclosure of it was otherwise a breach of his duty to the other or

(d) he learned the secret with notice of the facts that it was a secret and that its disclosure was made to him by mistake

Improper

EI Du Pont de Nemours amp Co v Christoph er (431 F2d 1012) ndash Business MoralityHeld Standard of ldquomeans which fall below the generally accepted standards of

commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939) Du Pont at 1016Flyover though not illegal was immoral and therefore improperTime Place and Circumstances

Facts Reasonable Measures taken to cover the factory during its construction but the ROOF was not covered

Reasoning ldquoThe Supreme Court of that state has declared that the undoubted tendency of the law has been to recognize and enforce higher standards of commercial morality in the business worldrdquo No productive work to gain the knowledge (really just free-riding)

f Improper means of discovery The discovery of anothers trade secret by improper means subjects the actor to liability independently of the harm to the interest in the secret Thus if one uses physical force to take a secret formula from anothers pocket or breaks into anothers office to steal the formula his conduct is wrongful and subjects him to liability apart from the rule stated in this Section Such conduct is also an improper means of procuring the secret under this rule But HN7means may be improper under this rule even though they do not cause any other harm than that to the interest in the trade secret Examples of such means are fraudulent misrepresentations to induce disclosure tapping of telephone wires eavesdropping or other espionage A complete catalogue of improper means is not possible In general they are means which fall below the generally accepted standards of commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939)

8

Breach of ConfidentialitySmith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

Held Misappropriation because circumstances in which information was revealed gave rise to an implied duty of confidentiality

Facts Smith had a great business idea but passed away (patent applications essentially inventing modern freight practices) followed by interest to buy the business expressed by Dravo Dravo does not purpose the business but then makes similar

Reasoning NDA is not the only way to establish a confidential relationship

Proper means include AKA Defenses to Misappropriation

1 Discovery by independent invention

2 Discovery by reverse engineering that is by starting with the known product and working backward to find the method by which it was developed The acquisition of the known product must of course also be by a fair and honest means such as purchase of the item on the open market for reverse engineering to be lawful

Kadant Inc v Seeley Mach Inc (244 F Supp 2d 19 (NDNY 2003))

ldquoTrade secret law does not offer protection against discovery by so-called reverse engineering However the term reverse engineering is not a talisman that may immunize the theft of trade secrets The relevant inquiry is whether the means to obtain the alleged trade secret were proper or honest as opposed to being obtained by virtue of a confidential relationship with an employer Reverse engineering a product to determine its design specifications is therefore permissible so long as the means used to get the information necessary to reverse engineer is in the public domain and not through the confidential relationship established with the maker or owner of the productrdquo HN 38

General debate around whether parties should be allowed to contract against reverse engineering Just reverse engineer in Europe

3 Discovery under a license from the owner of the trade secret

4 Observation of the item in public use or on public display

5 Obtaining the trade secret from published literature

9

F Remedies

Injunctive ReliefAn attempt to return the trade secret holder to the position they would have been in but for the misappropriation

Preliminary or PermanentTRO Until Public Knowledge

Damages - USTAActual losses (restitution) + Defendantrsquos wrongful profits (unjust enrichment) + ongoing royalty ndash any overlap =Misappropriation Damages

Punitive Damages and Attorneysrsquo FeesWillful and Malicious may justify treble damages (likely double) as well as attorneysrsquo fees

10

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 9: Intellectual Property - Notes, Outline

Determining ReasonablenessNOT Cost Prohibitive (Posnerrsquos argument) Industry Standards

Commensurate with the Secretrsquos value Common Sense (What might actually keep the information a secret)

ldquoFacts and Circumstancesrdquo Overuse of a measure devalues its purpose

Rockwell Graphic Systems Inc v DEV (1991) ndash Summary Judgment Reasonable MeasuresHeld Summary judgment is rarely if ever appropriate for determining whether

measures were reasonableFacts Plaintiff a manufacturer of newspaper printing presses and supplier of

parts sued Defendant Corporation a competing manufacturer and defendant president a former employee of plaintiff for misappropriation of trade secrets

Reasoning the mere fact that plaintiff gave piece part drawings to vendors who made parts for plaintiff did not forfeit trade secret protection

IMAX Corp v Cinema Technologies (1998) ndash IMAX duty to protect specificationsHeld the proprietor of an IMAX movie theater had a duty to IMAX to protect

the specifications of the projector as trade secrets from a competitor who was attempting to reverse engineer the IMAX technology

C Disclosure of Trade Secrets Non-Disclosure Agreements

How Trade Secrets get out therePublishing (which destroys trade secret status) Embedded into a product on the open market (which creates the possibility of reverse

engineering) exception is computer programs because clever engineer can figure out the code (ldquodecompilingrdquo) solution is lsquoterms of agreementrsquo aka lsquoclick-wraprsquo

Independent CreationInadvertent DisclosureTo Governments for the purpose of health and safety

Warner-Lambert Pharmaceutical Co v John J Reynolds Inc (1959) ndash Royalties ListerineHeld plaintiff could not escape that obligation simply because the secret was

discovered by a third party or by the general publicFacts contract provided that inventor would receive periodic royalty payments

at specified amounts for as long as plaintiff manufactured and sold the antiseptic compound Third party leaked the information so the plaintiff wished to quit paying royalties on something that was no longer a trade secret

Reasoning the plain language of the contract defined and stipulated that the royalties would be paid independent of the contingency of disclosure

5

Residuals Clause -tactics how they are used for what purposes time lag

D Trade Secrets and Employees (Modern Mobility)

NDA and some issues-does the employee receive consideration for signing one-cannot restrict information that an employee or partner already knew

Covenants Not to Compete and some issues ReasonablenessBecause proving misappropriation can be difficult to prove Duration Geographic Scope Type of Work Restrained

1) Is the restraint no greater than necessary to protect the legitimate business interests of the employer

2) Is the restraint unduly harsh and oppressive in curtailing the employeersquos legitimate efforts to earn a livelihood

3) Is the restraint contrary to sound public policy

Washington Breach of contract damages liquidated damages and lost profit are recoverable inWashington Perry v Moran 111 Wash2d 885 766 P2d 1096 (Wash 1989)California Business amp Professions Code sect 16601 creates an exception permitting lawful non-compete agreements for company owners A new section 166025 also applies to members of limited liability companies It applies when a shareholder sells their stock to another for valuable consideration (Hilb Royal amp Hamilton Ins Services v Robb (1995) 33 CalApp4th 1812 1824-1825) The typical scenario is when a shareholder sells or disposes of their stock

Assignment of Inventions Clauses-general rule if hired for that purpose belongs to employer if not hired for that purpose then belongs to the employee but the employer has a shop right

Non-Solicitation AgreementBusiness to Business no poachingBusiness to Employee no soliciting customers for employment

Holdover Trailer Clauses

Regulations Employee Handbooks

Prevention Keep Employees Happy

6

Inevitable Disclosure ndash looking at the UTSA Section 2(a)Settlement possibility looking for other places an employee could fit in the receiving company

PepsiCo Inc v Redmond (7th Circuit) ndash ldquoInevitable Disclosurerdquo All Sport Gatorade4

Held Redmond estopped from working for Quaker Oats (maker of Gatorade)Facts Former PepsiCo employee William Redmond who left that employ to go

to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledge

Reasoning Language of UTSA Section 2(a) ldquothreatrdquo of disclosure

E Proper and Improper Means of Discovery

Misappropriation means UTSA sect 1(2)(i) acquisition of a trade secret of another by a person who knows or has reason to know that the

trade secret was acquired by improper means or

(ii) disclosure or use of a trade secret of another without express or implied consent by a person who

(A) used improper means to acquire knowledge of the trade secret or

(B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was

(I) derived from or through a person who had utilized improper means to acquire it

(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use5 or

(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use or

(C) before a material change of his [or her] position knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake

4 ldquoThe principle behind this doctrine is that an employee with knowledge of a former employerrsquos trade secrets would ldquoinevitablyrdquo disclose the same to the new employer since the nature of the new job would lead to such disclosures given that the new and old employers were competitors And given the inevitability of such disclosures the former employer was not limited to sitting around and waiting until there was an actual or even threatened use of those trade secrets before the former employer could seek legal redress Under this doctrine that former employer could prevent the employee from taking that job and prevent the new employer from hiring the employee merely because the employee had such knowledge that would ldquoinevitablyrdquo be disclosed ldquoThe doctrine which has been adopted in some but not all states finds a coherent expression in a case out of the 7th Circuit PepsiCo Inc v Redmond That case involved a former PepsiCo employee William Redmond who left that employ to go to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo The case also involved other drink beverages in which the 2 companies competed Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledgerdquo httpwwwivanhoffmancominevitablehtml

5 Smith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

7

Liability for Disclosure or Use of Anothers Trade Restatement of the Law mdash Torts sect 757One who discloses or uses anothers trade secret without a privilege to do so is liable to the other if

(a) he discovered the secret by improper means or

(b) his disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to him or

(c) he learned the secret from a third person with notice of the facts that it was a secret and that the third person discovered it by improper means or that the third persons disclosure of it was otherwise a breach of his duty to the other or

(d) he learned the secret with notice of the facts that it was a secret and that its disclosure was made to him by mistake

Improper

EI Du Pont de Nemours amp Co v Christoph er (431 F2d 1012) ndash Business MoralityHeld Standard of ldquomeans which fall below the generally accepted standards of

commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939) Du Pont at 1016Flyover though not illegal was immoral and therefore improperTime Place and Circumstances

Facts Reasonable Measures taken to cover the factory during its construction but the ROOF was not covered

Reasoning ldquoThe Supreme Court of that state has declared that the undoubted tendency of the law has been to recognize and enforce higher standards of commercial morality in the business worldrdquo No productive work to gain the knowledge (really just free-riding)

f Improper means of discovery The discovery of anothers trade secret by improper means subjects the actor to liability independently of the harm to the interest in the secret Thus if one uses physical force to take a secret formula from anothers pocket or breaks into anothers office to steal the formula his conduct is wrongful and subjects him to liability apart from the rule stated in this Section Such conduct is also an improper means of procuring the secret under this rule But HN7means may be improper under this rule even though they do not cause any other harm than that to the interest in the trade secret Examples of such means are fraudulent misrepresentations to induce disclosure tapping of telephone wires eavesdropping or other espionage A complete catalogue of improper means is not possible In general they are means which fall below the generally accepted standards of commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939)

8

Breach of ConfidentialitySmith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

Held Misappropriation because circumstances in which information was revealed gave rise to an implied duty of confidentiality

Facts Smith had a great business idea but passed away (patent applications essentially inventing modern freight practices) followed by interest to buy the business expressed by Dravo Dravo does not purpose the business but then makes similar

Reasoning NDA is not the only way to establish a confidential relationship

Proper means include AKA Defenses to Misappropriation

1 Discovery by independent invention

2 Discovery by reverse engineering that is by starting with the known product and working backward to find the method by which it was developed The acquisition of the known product must of course also be by a fair and honest means such as purchase of the item on the open market for reverse engineering to be lawful

Kadant Inc v Seeley Mach Inc (244 F Supp 2d 19 (NDNY 2003))

ldquoTrade secret law does not offer protection against discovery by so-called reverse engineering However the term reverse engineering is not a talisman that may immunize the theft of trade secrets The relevant inquiry is whether the means to obtain the alleged trade secret were proper or honest as opposed to being obtained by virtue of a confidential relationship with an employer Reverse engineering a product to determine its design specifications is therefore permissible so long as the means used to get the information necessary to reverse engineer is in the public domain and not through the confidential relationship established with the maker or owner of the productrdquo HN 38

General debate around whether parties should be allowed to contract against reverse engineering Just reverse engineer in Europe

3 Discovery under a license from the owner of the trade secret

4 Observation of the item in public use or on public display

5 Obtaining the trade secret from published literature

9

F Remedies

Injunctive ReliefAn attempt to return the trade secret holder to the position they would have been in but for the misappropriation

Preliminary or PermanentTRO Until Public Knowledge

Damages - USTAActual losses (restitution) + Defendantrsquos wrongful profits (unjust enrichment) + ongoing royalty ndash any overlap =Misappropriation Damages

Punitive Damages and Attorneysrsquo FeesWillful and Malicious may justify treble damages (likely double) as well as attorneysrsquo fees

10

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 10: Intellectual Property - Notes, Outline

Residuals Clause -tactics how they are used for what purposes time lag

D Trade Secrets and Employees (Modern Mobility)

NDA and some issues-does the employee receive consideration for signing one-cannot restrict information that an employee or partner already knew

Covenants Not to Compete and some issues ReasonablenessBecause proving misappropriation can be difficult to prove Duration Geographic Scope Type of Work Restrained

1) Is the restraint no greater than necessary to protect the legitimate business interests of the employer

2) Is the restraint unduly harsh and oppressive in curtailing the employeersquos legitimate efforts to earn a livelihood

3) Is the restraint contrary to sound public policy

Washington Breach of contract damages liquidated damages and lost profit are recoverable inWashington Perry v Moran 111 Wash2d 885 766 P2d 1096 (Wash 1989)California Business amp Professions Code sect 16601 creates an exception permitting lawful non-compete agreements for company owners A new section 166025 also applies to members of limited liability companies It applies when a shareholder sells their stock to another for valuable consideration (Hilb Royal amp Hamilton Ins Services v Robb (1995) 33 CalApp4th 1812 1824-1825) The typical scenario is when a shareholder sells or disposes of their stock

Assignment of Inventions Clauses-general rule if hired for that purpose belongs to employer if not hired for that purpose then belongs to the employee but the employer has a shop right

Non-Solicitation AgreementBusiness to Business no poachingBusiness to Employee no soliciting customers for employment

Holdover Trailer Clauses

Regulations Employee Handbooks

Prevention Keep Employees Happy

6

Inevitable Disclosure ndash looking at the UTSA Section 2(a)Settlement possibility looking for other places an employee could fit in the receiving company

PepsiCo Inc v Redmond (7th Circuit) ndash ldquoInevitable Disclosurerdquo All Sport Gatorade4

Held Redmond estopped from working for Quaker Oats (maker of Gatorade)Facts Former PepsiCo employee William Redmond who left that employ to go

to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledge

Reasoning Language of UTSA Section 2(a) ldquothreatrdquo of disclosure

E Proper and Improper Means of Discovery

Misappropriation means UTSA sect 1(2)(i) acquisition of a trade secret of another by a person who knows or has reason to know that the

trade secret was acquired by improper means or

(ii) disclosure or use of a trade secret of another without express or implied consent by a person who

(A) used improper means to acquire knowledge of the trade secret or

(B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was

(I) derived from or through a person who had utilized improper means to acquire it

(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use5 or

(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use or

(C) before a material change of his [or her] position knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake

4 ldquoThe principle behind this doctrine is that an employee with knowledge of a former employerrsquos trade secrets would ldquoinevitablyrdquo disclose the same to the new employer since the nature of the new job would lead to such disclosures given that the new and old employers were competitors And given the inevitability of such disclosures the former employer was not limited to sitting around and waiting until there was an actual or even threatened use of those trade secrets before the former employer could seek legal redress Under this doctrine that former employer could prevent the employee from taking that job and prevent the new employer from hiring the employee merely because the employee had such knowledge that would ldquoinevitablyrdquo be disclosed ldquoThe doctrine which has been adopted in some but not all states finds a coherent expression in a case out of the 7th Circuit PepsiCo Inc v Redmond That case involved a former PepsiCo employee William Redmond who left that employ to go to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo The case also involved other drink beverages in which the 2 companies competed Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledgerdquo httpwwwivanhoffmancominevitablehtml

5 Smith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

7

Liability for Disclosure or Use of Anothers Trade Restatement of the Law mdash Torts sect 757One who discloses or uses anothers trade secret without a privilege to do so is liable to the other if

(a) he discovered the secret by improper means or

(b) his disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to him or

(c) he learned the secret from a third person with notice of the facts that it was a secret and that the third person discovered it by improper means or that the third persons disclosure of it was otherwise a breach of his duty to the other or

(d) he learned the secret with notice of the facts that it was a secret and that its disclosure was made to him by mistake

Improper

EI Du Pont de Nemours amp Co v Christoph er (431 F2d 1012) ndash Business MoralityHeld Standard of ldquomeans which fall below the generally accepted standards of

commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939) Du Pont at 1016Flyover though not illegal was immoral and therefore improperTime Place and Circumstances

Facts Reasonable Measures taken to cover the factory during its construction but the ROOF was not covered

Reasoning ldquoThe Supreme Court of that state has declared that the undoubted tendency of the law has been to recognize and enforce higher standards of commercial morality in the business worldrdquo No productive work to gain the knowledge (really just free-riding)

f Improper means of discovery The discovery of anothers trade secret by improper means subjects the actor to liability independently of the harm to the interest in the secret Thus if one uses physical force to take a secret formula from anothers pocket or breaks into anothers office to steal the formula his conduct is wrongful and subjects him to liability apart from the rule stated in this Section Such conduct is also an improper means of procuring the secret under this rule But HN7means may be improper under this rule even though they do not cause any other harm than that to the interest in the trade secret Examples of such means are fraudulent misrepresentations to induce disclosure tapping of telephone wires eavesdropping or other espionage A complete catalogue of improper means is not possible In general they are means which fall below the generally accepted standards of commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939)

8

Breach of ConfidentialitySmith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

Held Misappropriation because circumstances in which information was revealed gave rise to an implied duty of confidentiality

Facts Smith had a great business idea but passed away (patent applications essentially inventing modern freight practices) followed by interest to buy the business expressed by Dravo Dravo does not purpose the business but then makes similar

Reasoning NDA is not the only way to establish a confidential relationship

Proper means include AKA Defenses to Misappropriation

1 Discovery by independent invention

2 Discovery by reverse engineering that is by starting with the known product and working backward to find the method by which it was developed The acquisition of the known product must of course also be by a fair and honest means such as purchase of the item on the open market for reverse engineering to be lawful

Kadant Inc v Seeley Mach Inc (244 F Supp 2d 19 (NDNY 2003))

ldquoTrade secret law does not offer protection against discovery by so-called reverse engineering However the term reverse engineering is not a talisman that may immunize the theft of trade secrets The relevant inquiry is whether the means to obtain the alleged trade secret were proper or honest as opposed to being obtained by virtue of a confidential relationship with an employer Reverse engineering a product to determine its design specifications is therefore permissible so long as the means used to get the information necessary to reverse engineer is in the public domain and not through the confidential relationship established with the maker or owner of the productrdquo HN 38

General debate around whether parties should be allowed to contract against reverse engineering Just reverse engineer in Europe

3 Discovery under a license from the owner of the trade secret

4 Observation of the item in public use or on public display

5 Obtaining the trade secret from published literature

9

F Remedies

Injunctive ReliefAn attempt to return the trade secret holder to the position they would have been in but for the misappropriation

Preliminary or PermanentTRO Until Public Knowledge

Damages - USTAActual losses (restitution) + Defendantrsquos wrongful profits (unjust enrichment) + ongoing royalty ndash any overlap =Misappropriation Damages

Punitive Damages and Attorneysrsquo FeesWillful and Malicious may justify treble damages (likely double) as well as attorneysrsquo fees

10

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 11: Intellectual Property - Notes, Outline

Inevitable Disclosure ndash looking at the UTSA Section 2(a)Settlement possibility looking for other places an employee could fit in the receiving company

PepsiCo Inc v Redmond (7th Circuit) ndash ldquoInevitable Disclosurerdquo All Sport Gatorade4

Held Redmond estopped from working for Quaker Oats (maker of Gatorade)Facts Former PepsiCo employee William Redmond who left that employ to go

to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledge

Reasoning Language of UTSA Section 2(a) ldquothreatrdquo of disclosure

E Proper and Improper Means of Discovery

Misappropriation means UTSA sect 1(2)(i) acquisition of a trade secret of another by a person who knows or has reason to know that the

trade secret was acquired by improper means or

(ii) disclosure or use of a trade secret of another without express or implied consent by a person who

(A) used improper means to acquire knowledge of the trade secret or

(B) at the time of disclosure or use knew or had reason to know that his knowledge of the trade secret was

(I) derived from or through a person who had utilized improper means to acquire it

(II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use5 or

(III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use or

(C) before a material change of his [or her] position knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake

4 ldquoThe principle behind this doctrine is that an employee with knowledge of a former employerrsquos trade secrets would ldquoinevitablyrdquo disclose the same to the new employer since the nature of the new job would lead to such disclosures given that the new and old employers were competitors And given the inevitability of such disclosures the former employer was not limited to sitting around and waiting until there was an actual or even threatened use of those trade secrets before the former employer could seek legal redress Under this doctrine that former employer could prevent the employee from taking that job and prevent the new employer from hiring the employee merely because the employee had such knowledge that would ldquoinevitablyrdquo be disclosed ldquoThe doctrine which has been adopted in some but not all states finds a coherent expression in a case out of the 7th Circuit PepsiCo Inc v Redmond That case involved a former PepsiCo employee William Redmond who left that employ to go to work for the Quaker Oats Company (also sued) manufacturer of Gatorade a competitor to Pepsirsquos ldquoAll Sportrdquo The case also involved other drink beverages in which the 2 companies competed Redmond in his employ with PepsiCo had access to many company trade secrets and confidential information There was no allegation however that he or Quaker used or intended to use that knowledgerdquo httpwwwivanhoffmancominevitablehtml

5 Smith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

7

Liability for Disclosure or Use of Anothers Trade Restatement of the Law mdash Torts sect 757One who discloses or uses anothers trade secret without a privilege to do so is liable to the other if

(a) he discovered the secret by improper means or

(b) his disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to him or

(c) he learned the secret from a third person with notice of the facts that it was a secret and that the third person discovered it by improper means or that the third persons disclosure of it was otherwise a breach of his duty to the other or

(d) he learned the secret with notice of the facts that it was a secret and that its disclosure was made to him by mistake

Improper

EI Du Pont de Nemours amp Co v Christoph er (431 F2d 1012) ndash Business MoralityHeld Standard of ldquomeans which fall below the generally accepted standards of

commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939) Du Pont at 1016Flyover though not illegal was immoral and therefore improperTime Place and Circumstances

Facts Reasonable Measures taken to cover the factory during its construction but the ROOF was not covered

Reasoning ldquoThe Supreme Court of that state has declared that the undoubted tendency of the law has been to recognize and enforce higher standards of commercial morality in the business worldrdquo No productive work to gain the knowledge (really just free-riding)

f Improper means of discovery The discovery of anothers trade secret by improper means subjects the actor to liability independently of the harm to the interest in the secret Thus if one uses physical force to take a secret formula from anothers pocket or breaks into anothers office to steal the formula his conduct is wrongful and subjects him to liability apart from the rule stated in this Section Such conduct is also an improper means of procuring the secret under this rule But HN7means may be improper under this rule even though they do not cause any other harm than that to the interest in the trade secret Examples of such means are fraudulent misrepresentations to induce disclosure tapping of telephone wires eavesdropping or other espionage A complete catalogue of improper means is not possible In general they are means which fall below the generally accepted standards of commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939)

8

Breach of ConfidentialitySmith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

Held Misappropriation because circumstances in which information was revealed gave rise to an implied duty of confidentiality

Facts Smith had a great business idea but passed away (patent applications essentially inventing modern freight practices) followed by interest to buy the business expressed by Dravo Dravo does not purpose the business but then makes similar

Reasoning NDA is not the only way to establish a confidential relationship

Proper means include AKA Defenses to Misappropriation

1 Discovery by independent invention

2 Discovery by reverse engineering that is by starting with the known product and working backward to find the method by which it was developed The acquisition of the known product must of course also be by a fair and honest means such as purchase of the item on the open market for reverse engineering to be lawful

Kadant Inc v Seeley Mach Inc (244 F Supp 2d 19 (NDNY 2003))

ldquoTrade secret law does not offer protection against discovery by so-called reverse engineering However the term reverse engineering is not a talisman that may immunize the theft of trade secrets The relevant inquiry is whether the means to obtain the alleged trade secret were proper or honest as opposed to being obtained by virtue of a confidential relationship with an employer Reverse engineering a product to determine its design specifications is therefore permissible so long as the means used to get the information necessary to reverse engineer is in the public domain and not through the confidential relationship established with the maker or owner of the productrdquo HN 38

General debate around whether parties should be allowed to contract against reverse engineering Just reverse engineer in Europe

3 Discovery under a license from the owner of the trade secret

4 Observation of the item in public use or on public display

5 Obtaining the trade secret from published literature

9

F Remedies

Injunctive ReliefAn attempt to return the trade secret holder to the position they would have been in but for the misappropriation

Preliminary or PermanentTRO Until Public Knowledge

Damages - USTAActual losses (restitution) + Defendantrsquos wrongful profits (unjust enrichment) + ongoing royalty ndash any overlap =Misappropriation Damages

Punitive Damages and Attorneysrsquo FeesWillful and Malicious may justify treble damages (likely double) as well as attorneysrsquo fees

10

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 12: Intellectual Property - Notes, Outline

Liability for Disclosure or Use of Anothers Trade Restatement of the Law mdash Torts sect 757One who discloses or uses anothers trade secret without a privilege to do so is liable to the other if

(a) he discovered the secret by improper means or

(b) his disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to him or

(c) he learned the secret from a third person with notice of the facts that it was a secret and that the third person discovered it by improper means or that the third persons disclosure of it was otherwise a breach of his duty to the other or

(d) he learned the secret with notice of the facts that it was a secret and that its disclosure was made to him by mistake

Improper

EI Du Pont de Nemours amp Co v Christoph er (431 F2d 1012) ndash Business MoralityHeld Standard of ldquomeans which fall below the generally accepted standards of

commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939) Du Pont at 1016Flyover though not illegal was immoral and therefore improperTime Place and Circumstances

Facts Reasonable Measures taken to cover the factory during its construction but the ROOF was not covered

Reasoning ldquoThe Supreme Court of that state has declared that the undoubted tendency of the law has been to recognize and enforce higher standards of commercial morality in the business worldrdquo No productive work to gain the knowledge (really just free-riding)

f Improper means of discovery The discovery of anothers trade secret by improper means subjects the actor to liability independently of the harm to the interest in the secret Thus if one uses physical force to take a secret formula from anothers pocket or breaks into anothers office to steal the formula his conduct is wrongful and subjects him to liability apart from the rule stated in this Section Such conduct is also an improper means of procuring the secret under this rule But HN7means may be improper under this rule even though they do not cause any other harm than that to the interest in the trade secret Examples of such means are fraudulent misrepresentations to induce disclosure tapping of telephone wires eavesdropping or other espionage A complete catalogue of improper means is not possible In general they are means which fall below the generally accepted standards of commercial morality and reasonable conduct Restatement of Torts sect 757 comment f at 10 (1939)

8

Breach of ConfidentialitySmith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

Held Misappropriation because circumstances in which information was revealed gave rise to an implied duty of confidentiality

Facts Smith had a great business idea but passed away (patent applications essentially inventing modern freight practices) followed by interest to buy the business expressed by Dravo Dravo does not purpose the business but then makes similar

Reasoning NDA is not the only way to establish a confidential relationship

Proper means include AKA Defenses to Misappropriation

1 Discovery by independent invention

2 Discovery by reverse engineering that is by starting with the known product and working backward to find the method by which it was developed The acquisition of the known product must of course also be by a fair and honest means such as purchase of the item on the open market for reverse engineering to be lawful

Kadant Inc v Seeley Mach Inc (244 F Supp 2d 19 (NDNY 2003))

ldquoTrade secret law does not offer protection against discovery by so-called reverse engineering However the term reverse engineering is not a talisman that may immunize the theft of trade secrets The relevant inquiry is whether the means to obtain the alleged trade secret were proper or honest as opposed to being obtained by virtue of a confidential relationship with an employer Reverse engineering a product to determine its design specifications is therefore permissible so long as the means used to get the information necessary to reverse engineer is in the public domain and not through the confidential relationship established with the maker or owner of the productrdquo HN 38

General debate around whether parties should be allowed to contract against reverse engineering Just reverse engineer in Europe

3 Discovery under a license from the owner of the trade secret

4 Observation of the item in public use or on public display

5 Obtaining the trade secret from published literature

9

F Remedies

Injunctive ReliefAn attempt to return the trade secret holder to the position they would have been in but for the misappropriation

Preliminary or PermanentTRO Until Public Knowledge

Damages - USTAActual losses (restitution) + Defendantrsquos wrongful profits (unjust enrichment) + ongoing royalty ndash any overlap =Misappropriation Damages

Punitive Damages and Attorneysrsquo FeesWillful and Malicious may justify treble damages (likely double) as well as attorneysrsquo fees

10

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 13: Intellectual Property - Notes, Outline

Breach of ConfidentialitySmith v Dravo (1953) ndash Business up for Sale No Purchase but Trade Secrets used

Held Misappropriation because circumstances in which information was revealed gave rise to an implied duty of confidentiality

Facts Smith had a great business idea but passed away (patent applications essentially inventing modern freight practices) followed by interest to buy the business expressed by Dravo Dravo does not purpose the business but then makes similar

Reasoning NDA is not the only way to establish a confidential relationship

Proper means include AKA Defenses to Misappropriation

1 Discovery by independent invention

2 Discovery by reverse engineering that is by starting with the known product and working backward to find the method by which it was developed The acquisition of the known product must of course also be by a fair and honest means such as purchase of the item on the open market for reverse engineering to be lawful

Kadant Inc v Seeley Mach Inc (244 F Supp 2d 19 (NDNY 2003))

ldquoTrade secret law does not offer protection against discovery by so-called reverse engineering However the term reverse engineering is not a talisman that may immunize the theft of trade secrets The relevant inquiry is whether the means to obtain the alleged trade secret were proper or honest as opposed to being obtained by virtue of a confidential relationship with an employer Reverse engineering a product to determine its design specifications is therefore permissible so long as the means used to get the information necessary to reverse engineer is in the public domain and not through the confidential relationship established with the maker or owner of the productrdquo HN 38

General debate around whether parties should be allowed to contract against reverse engineering Just reverse engineer in Europe

3 Discovery under a license from the owner of the trade secret

4 Observation of the item in public use or on public display

5 Obtaining the trade secret from published literature

9

F Remedies

Injunctive ReliefAn attempt to return the trade secret holder to the position they would have been in but for the misappropriation

Preliminary or PermanentTRO Until Public Knowledge

Damages - USTAActual losses (restitution) + Defendantrsquos wrongful profits (unjust enrichment) + ongoing royalty ndash any overlap =Misappropriation Damages

Punitive Damages and Attorneysrsquo FeesWillful and Malicious may justify treble damages (likely double) as well as attorneysrsquo fees

10

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 14: Intellectual Property - Notes, Outline

F Remedies

Injunctive ReliefAn attempt to return the trade secret holder to the position they would have been in but for the misappropriation

Preliminary or PermanentTRO Until Public Knowledge

Damages - USTAActual losses (restitution) + Defendantrsquos wrongful profits (unjust enrichment) + ongoing royalty ndash any overlap =Misappropriation Damages

Punitive Damages and Attorneysrsquo FeesWillful and Malicious may justify treble damages (likely double) as well as attorneysrsquo fees

10

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 15: Intellectual Property - Notes, Outline

III Patents

MAKE USE

Patents are the opposite of trade secrets in that disclosure for the public good gives the discloser monopoly rights for a limited time

Research by Solow-most economic growth is driven by (1) RampD and (2) education

Research by Romer-investments in RampD do not decrease their returns to scale (not subject to diminishing

returns)

Aristotle rejected the patent system because he believed it would cause change

ldquoThe Congress shall have the powerhellip 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 Discoveriesrdquo Art I section 8

A Patentable Subject Matter

Patentable35 USC 101 Inventions patentable

ldquoWhoever invents or discovers any new and useful process machine manufacture or composition of matter or any new and useful improvement thereof may obtain a patent therefor subject to the conditions and requirements of this titlerdquo

Process (covers methods) ldquouserdquo patent sequence of steps may be crucial product-by-processProduct (cover tangibles) machine manufacture composition of matter isolations or

purifications product-by-process living organisms (eg cancer mouse)

PlantDesign (non-functional)

Un-patentableLaws of Nature Physical Phenomena Discoveries Abstract Ideas Printed Matter Inventions useful solely in connection with atomic weapons violations of ordre publique (the public conscious) ldquoImmoralrdquo inventions (Lowell v Lewis (CCD Mass 1817 Judge Story)) Inventions involving or taking place within the human body

Diamond v Chakrabarty (US 1980) ndash bacteria which metabolizes crude oilHeld Statutory subject matter is ldquoanything under the sun that is made by manrdquo

fall within the category of lsquocomposition of matterrsquoFacts Recombined various parts of bacteriaReasoning If Congress could predict all that would be invented and then patented

then we would not need the patent office

11

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 16: Intellectual Property - Notes, Outline

Funk Brothers v Kalo (US 1948) ndash Held Combining bacteria ldquois no more than the discovery of some of the

handiwork of nature and hence it is not patentablerdquoFacts Mixed bacteria for the purpose of cultures

Parke-Davis v Mulford (1911 Judge Learned Hand) ndash purified adrenaline has new usesHeld After removal and purification adrenalin ldquobecame for every practical

purpose a new thing commercially and therapeutically That was a good ground for a patentrdquo

Facts Removing adrenalin completely from tissues Reasoning does new things once completely isolated

State Street v Signature ndash business methods patentableFacts Numbers in Numbers out but the process had practical utility

Bilski v Kappos (2010) ndash method for hedge-fundingHeld Not patentablehellipMachine Transformation test is not the ONLY test Reasoning because (1) represents machine (2) no transformation of matter

One or the other in order to patentable but the SCOTUS said this isnrsquot the only test

LabCorp v Metabolite (US 2005) ndash checking blood compared against a chartHeld Refused to answer called certiorari premature

Mayo v Prometheus (2010) ndash forthcoming To answer this blood methodology issue

B Novelty and Statutory Bars

sect101 ldquonew and usefulrdquo sect103 and sect102 languageJudged by date of invention until the America Invents ActAnticipation sect102(a)(e) was already in public use (including secret use for commercial

purposes) or had been publishedReference Beware Publication (ANYWHERE) Presentation Unpatentable even if

unaware of the reference Public access sufficient to constitute a bar no need to be widespread Includes undisclosed patents pending review by USPTO

Prior Art ldquothe inherency doctrinerdquo new process for making old product is patentable but new uses of an old product do not elude the prior art preclusion

Anticipates every element of the proposed patent must be in a single previous patent in order to anticipate

Critical Date Is the patent anticipated as of the the date of invention

12

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 17: Intellectual Property - Notes, Outline

Priority sect102(g) another inventor had priority could be lost for lack of reasonable diligence in prosecuting the patent

Derivation sect102(f) learned of the invention from someone else Not entitled to a patent if a fully operable conception of the invention is communicated to the applicant

Loss of Right sect102(b)6 once an invention becomes public use or on sale (in US) the inventor has year to file her application

Abandonment sect102(c)Concealment sect102(g) conceal suppress or hide precludes patentabilityForeign sect102(d) must file in the US within one year of filing elsewhere

Experiment is protected but public use tends to be broad

ConceptionThe conception of a species counts as conception of an entire genus

Reduces to Practice (RTP) = Physical embodiment or performance Complete embodimentRTP of one species counts as conception of an entire genus

DiligenceActual activity or a legitimate excuse during the entire relevant period

Priority based on date of invention Xc Yc Yrtp Xrtp was the diligence continuous through Y

Griffith v Kanamaru (CAFC 1987) ndash Griffith took a break diligence brokenHeld Kanamaru gets the patent because the Griffith took a break (because he

was waiting for grant money and help from the right post-doctoral fellow)

Facts for a patent on an aminocarnitine compound

6 Other nationsrsquo patent regimes are less forgiving on this point than the US

13

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 18: Intellectual Property - Notes, Outline

In re Hall ndash Dissertation is Prior Art

AIASection 102(g) will be eliminated

(g)(1) during the course of an interference conducted under section 135 or section 291 another inventor involved therein establishes to the extent permitted in section 104 that before such persons invention thereof the invention was made by such other inventor and not abandoned suppressed or concealed or (2) before such persons invention thereof the invention was made in this country by another inventor who had not abandoned suppressed or concealed it In determining priority of invention under this subsection there shall be considered not only the respective dates of conception and reduction to practice of the invention but also the reasonable diligence of one who was first to conceive and last to reduce to practice from a time prior to conception by the other

C Utility

General ldquoUtility means more than a mere curiosity a scientific process exciting wonder yet not producing physical results or a frivolous or trifling article not aiding in the progress nor increasing the possession of the human racerdquo -Prof William Robinson

Specific an invention must actually perform its intended function

Beneficial or Moral Lowell v Lewis (CCD Mass 1817 Judge Story)

Held Patents lack utility if used to ldquopoison people or to promote debauchery or to facilitate private assassinationrdquo

14

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 19: Intellectual Property - Notes, Outline

Juicy Whip v Orange Bang (CAFC 1999) ndash Swirly Juice MachineHeld Patentable Patent office does not consider issues of morality Facts The machine shows this swirling juice above a fountain that is actually

florescent poison while the machine serves juice from a box belowReasoning Argument against (not holding) is that this is deceptive Moral Immoral

is for Congress to decide and as of yet they have not made morality an element of patentability Improvement over the prior art

Brenner v Manson (SCOTUS 1966) ndash A Protein without a Purpose (that is USE)Held The Utility being patented must be KNOWN Facts Basically Manson came up with the process to make the steroid but didnt

have the foggiest idea what the steroid could possibly be used for Therefore his invention wasnt useful

Reasoning Goes to the underlying policy for requiring utility progress of society incentivizing research

In re Fisher (CAFC 2005) ndash Fragment of a gene which can find the Whole geneHeld EST (fragment gene) not patentable itrsquos just a hunting license which

would hurt downstream research Dissent The line is more towards knowing what something does

2001 PTO Utility Examination GuidelinesInventions must have

1 Specific Utility the utility is related to the claimed inventive aspects2 Substantial Utility (no throw-away utility)3 Credible Utility an operable function

Inspired by worries of the ldquotragedy of the anti-commonsrdquo

One Use to get the patent to Exclude Every UsePatent Utility does not equal FDA UtilityDifferent standard for Utility for different technologies yes no why howPatents are kept away from the Human Body

15

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 20: Intellectual Property - Notes, Outline

D Non-obviousness

Measured by the PHOSITA who has encyclopedic knowledge of all prior art

This sectionrsquos headings come from the case Graham v Hohn Deere Co 383 US 1 (1966) ndash Spring loaded shank for plow

Held Quantum of difference to warrant patentability Balance the headings Held that was obvious

Facts Previous patent patented improvements but ultimately his own previous patents shot him in the foot

1 Prior Art scope and content (different from Novelty a bit)Obviousness is judged from the point of view from a PHOSIA against prior art that is ldquoreasonably pertinentrdquo based on whether the reference falls ldquowithin the field of the inventorrsquos endeavorrdquo In re Paulsen (30 F 3d 1475 1481 (2004))

In the inventing process what are similar endeavors (as in toothbrushes and hairbrushes probably face similar issues)

If inventors work together or companyrsquos collaborate the prior art of the involved member will not prejudice patentability

In re Kubin ndash Obvious-to-try

To be clear Kubin does not hold that an invention that was obvious to try was necessarily obvious under

Section 103(a) Going forward however the question in this long-running debate will be when is an

invention that was obvious to try nevertheless nonobvious (quoting In re OrsquoFarrell 853 F2d 894 (Fed Cir

1988) Kubin revives the OFarrell analysis of obvious to try and carves-out two factual situations where

obvious-to-try analysis should not apply

(1) Throwing darts versus a finite number of Identified predictable known options

In such circumstances where a defendant merely throws metaphorical darts at a board filled with

combinatorial prior art possibilities courts should not succumb to hindsight claims of obviousness The

inverse of this proposition is succinctly encapsulated by the Supreme Courtrsquos statement in KSR that where a

skilled artisan merely pursues ldquoknown optionsrdquo from a ldquofinite number of identified predictable solutionsrdquo

obviousness under sect 103 arises 550 US at 421

(2) Exploring new technology versus improving known and predictable technology

[An] impermissible ldquoobvious to tryrdquo situations occurs where what was ldquoobvious to tryrdquo was to explore a new

technology or general approach that seemed to be a promising field of experimentation where the prior art

gave only general guidance as to the particular form of the claimed invention or how to achieve it

(Quoting OFarrell)

Again KSR affirmed the logical inverse of this statement by stating that sect 103 bars patentability unless ldquothe

improvement is more than the predictable use of prior art elements according to their established functionsrdquo

16

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 21: Intellectual Property - Notes, Outline

Application In this case the court finds that neither of the OFarrell exceptions apply The invention is old-school

biotech isolating and sequencing a human gene that encodes for a protein People do this in high school now and

the application explicitly states that the DNA and Protein sequence may be obtained through conventional

methodologies known to one of skill in the art Likewise the protein in question had already been identified and the

prior art suggested that the protein plays an role in human immune response

In re Dembiczak -

2 Differences between the Prior Art and the Claims at IssueOption 1 There is a new element to the Patent not in the prior art

Would the missing element have been obvious to a PHOSIA

Option 2 All elements are somewhere in the prior art (not any one patent) which is more likelyIs the combination of the elements obvious to a PHOSIA

3 PHOS in the pertinent ArtFactors to consider in who this person is

1 Types of problems encountered in the art2 Prior art solution to those problems3 Rapidity with which innovations are made4 Sophistication of the technology5 Educational level of active workers in the field

17

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 22: Intellectual Property - Notes, Outline

Obvious or NotTechnical Economic and Motivational perspectives Again PHOSITA

Secondary factors courts have looked at1 Commercial Success (or was it just marketing)2 Long-felt but unresolved need (eg trade journal suggests it)3 Failure of others4 Industry Acquiescence 5 Copying (others are copying the patent in question)6 Unexpected results or properties of claimed invention 7 Skepticism of experts

KSR v Teleflex (US 2007) ndash Computerized PedalHeld TSM is just one of many tests Obvious development Facts Teaching Suggestions Motivations

E Disclosure proof of possession

Specification must includeWritten description of the invention sufficient to Prove that the inventor had possession of the claimed invention as of priority dateEnable a PHOSITA to carry out the claims without resort to undue experimentation

35 USC 112 paragraph 1ldquoThe specification shall contain a written description of the invention and of the manner and process of making and using it in such full clear concise and exact terms as to enable any person skilled in the art to which it pertains or with which it is most nearly connected to make and use the same and shall set forth the best mode (enablement) contemplated by the inventor of carrying out his inventionrdquo

Written DescriptionActual reduction (constructive reduction) to practice description of invention in possession symbolic representations or deposit of the invention (which happens with biological patents which are beyond current understanding in a sense)Gentry Gallery v Berkline (CAFC 1998)

ldquo[claims] may be no broader than the supporting disclosurehelliprdquo

Ariad v Eli Lilly (CAFC 2010 en benc) ndash SPECIFIC written description1 ldquoSince its inception this court has consistently held that sect 112 first paragraph

contains a written description requirement separate from enablementhellipwhich we now affirmrdquo

2 ldquoSpecifically the description must ldquoclearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimedrdquordquo

3 No categorical claims only specifics

18

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 23: Intellectual Property - Notes, Outline

EnablementMust describe the to the public how to use and make the inventionJudged with respect to a PHOSITAEach and every claimed embodiment must be enabled The Incandescent Lamp Patent (US 1895)Some failure rate is acceptableWithout undue experimentation by a PHOSITA

quantity of experimentation amount of direction presented nature of invention state or prior art hellip OTHERS get creative litigator

Best Mode statutory requirement doesnrsquot have to be only doesnrsquot have to be explicit (AIA still requires Best Mode but failure no longer triggers invalidity)Judged not by PHOSITA but by the subjective belief of the patent submitterIf element makes for the best mode it must be disclosedlsquobest modersquo itself doesnrsquot apply to each element if there is another source for the element

F Patent Rights and Claim Interpretation

35 USC 271 Infringement of patent(a) Except as otherwise provided in this title whoever without authority makes uses offers to

sell or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor infringes the patent

(b) Induces infringement(c) contributory infringement(d) activities by patent owner that do not limit infringement(e) apply for FDA approval of a generic version of patented drug(f) exportation of components to make infringement (g) importation of product produced elsewhere

Claim Writing 1 Preamble2 Transition Phrase

a Open comprising including containing mixtureb Closed consisting ofc Ambiguous consisting essentially of having is

3 Body (list of elements)

Standard cannons of interpretation are used by the court to interpret a patent which in turn determines its scope and decides whether there is literal infringement

The meaning of a word within in a patent should be driven largely by its use in the patent

19

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 24: Intellectual Property - Notes, Outline

Claim InterpretationPhillips v AWH Corp (CAFC 2005)(en benc)Interpretive Sources

Intrinsic Evidence claim language ordinary meaning other claims claims in related patents

Patent Specification can point away from ordinary or dictionary meaningProsecution History Patenteersquos negotiation with PTO over claim nmeaning bindingExtrinsic Evidence Permissible if intrinsic evidence not dispositive sources can be

dictionaries encyclopedias treatises experts

Cannons of Claim Interpretation1 -Where intrinsic evidence unambiguously sets out claim scope it controls2 -There is a heavy presumption in favor of the ordinary meaning of claim language3 -General and technical dictionaries can be used to determine ordinary meaning4 -A claim term may be read with reference to the specification but a limitationexpansion

from the specification should not be read into the claim5 -If possible a claim should be construed to encompass a disclosed embodiment of the

invention6 -Claims should be construed to uphold their validity unless their clear language shows

otherwise7 -Where a claim is susceptible to a broad and narrow construction the narrow should be

adopted8 -The presumption of claim differentiation may be overcome by intrinsic and relevant

extrinsic evidence

G Non-Utility Patents

Section 112 paragraph 6Means plus Function ClaimsAn element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure material or acts in support thereof and such claim shall be construed to cover the corresponding structure material or acts described in the specification and equivalents thereof

H Infringement Doctrine of Equivalents

Literal InfringementEquivalent in both the lsquotreesrsquo and the lsquoforestrsquo Literal Infringement Explicit or inherent infringement of each element

Larami Corp v Amron 27 USPQ2d 1280 ndash DETACHABLE V THEREIN SupersoakerHeld (deciding the countersuit)

Does the SUPERSOAKER infringe Claim 1 of the Esposito patent No To infringe a claim of a patent the product in question must infringe all elements of the claim Here the SUPERSOAKERs water chamber is

20

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 25: Intellectual Property - Notes, Outline

external which does not meet the chamber therein element of Claim 1

Does the SUPERSOAKER infringe Claim 10 of the Esposito patent No The SUPERSOAKER with its external reservoir cannot be said to contain an arrangement along the same axis

Facts Plaintiff Larami manufactured a line of patented SUPERSOAKER water guns that stored water under pressure in an external detachable reservoir and shot water by releasing a valve Larami sued defendants Alan Amron and Talk To Me Products Inc and defendants counter-sued for infringement of a patent assigned to them by Gary Esposito Most of the claims of Espositos patent described using electricity to produce lights and sounds in a water gun but Claim 1 described a toy with an elongated housing [case] having a chamber therein for a liquid [tank] a pumphellipfor building up an appreciable amount of pressure in said chamber for ejecting a stream of liquid therefrom an appreciable distance substantially forwardly of said toyhellip The Esposito patent also included Claim 10 describing an arrangement of a tank air pump and outlet nozzle along the same axis

Doctrine of Equivalents

In the United States the doctrine of equivalents analysis is applied to individual claim limitations not to the invention as a whole[1] The legal test articulated in Warner-Jenkinson Co v Hilton Davis Chem Co (1997) is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is insubstantial

One way of determining whether a difference is insubstantial or not is called the triple identity test Under the triple-identity test the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be insubstantial if the limitation in the accused device

1 It performs substantially the same function2 In substantially the same way3 To yield substantially the same result4 as the limitation literally recited in the patent claim See Graver Tank amp Manufacturing

Co v Linde Air Products Co (1950)

In the United States the doctrine of equivalents is limited by prosecution history estoppel Under prosecution history estoppel if the patentee abandoned through an amendment to the patent application certain literal claim coverage (eg by narrowing the literal scope of the patent claim) then the patentee is estopped from later arguing that the surrendered coverage is insubstantially different from the literally claimed limitation[2] Other more arcane limitations such as the ensnarement defense tend to be more difficult to apply[3]

The United States also has a statutory equivalents doctrine that is codified in 35 USC sect 112 para 6 which extends to structural equivalents However while the doctrine of equivalents for para 6

21

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 26: Intellectual Property - Notes, Outline

extends to technological equivalents developed after the issuance of a claim the structural equivalents of para 6 only extends to equivalents available at issuance and disclosed in the application[4]

Winans v Denmead (US 1853) ndash Historical BeginningHeld ___Facts ___

Graver Tank v Linde Air (US 1950) ndash Held Look at literal infringement first

Triple Identity Test Function Way ResultFacts ___

Warner-Jenkinson v Hilton Davis (US 1977) ndash Held All elements rule

Apply the Triple Identity Test ELEMENT BY ELEMENT

Prosecution History EstoppelIf an amendment is made to an application during prosecution to narrow a claim in order to preserve patentability then the patentee is estopped from claiming infringement on the un-amended patent

Festo v Shoketsu (US 2002) ndash Prosecution history estoppel ndash Foreseeability criterionHeld Does modification because of patentability concerns during the patent

process provide a complete bar to the patentee against claiming infringement through equivalents because of procedural history estoppel No Although a patentee by modifying a patent in response to patentability concerns explicitly gives up claims of equivalents in the modified material the estoppel bar is flexible rather than rigid

After amendment as before language remains an imperfect fit for invention The burden is still on the patentee to show that the equivalents are not excluded by estoppel in the modification The patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent Rehabilitates doctrine of equivalents

Unforeseeable At the moment of application there are some things about the area of technology that are unimaginable and therefore beyond patent drafting expectations Unforeseeable protected by the Doctrine of Equivalents

Facts Petitioner Festo Corporation patented magnetic rod-less cylinders for moving objects in a conveying system devices now used in machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney

22

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 27: Intellectual Property - Notes, Outline

World During the patent process Festo modified the patents in response to the PTOs objections regarding patentability and prior art adding a limitation that the inventions contain a pair of sealing rings with a lip on each side KF Respondents SMC later began using a similar device with a two-way lip on the cylinder putting it outside the literal claim of the Festo patents

Johnson amp Johnson Associates Inc v RES ndash Aluminum substrates Foreseeable Steel Johnson amp Johnson applied for a patent on method for printing circuit boards

o The specification said that a number of materials could be used as the substrate but the claims only talked about using aluminum for a substrate

RES began manufacturing very similar circuit boards that used steel as a substrate Johnson amp Johnson sued for infringement

o Johnson amp Johnson argued that the differences between steel and aluminum were very minor and so it was infringing via the Doctrine of Equivalents

The Doctrine of Equivalents says that a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is an equivalence between the elements of the accused product or process and the claimed elements of the patented invention

o RES argued that when Johnson amp Johnson willfully limited their patent to aluminum they dedicated any unclaimed substrates (like copper) to the public

Thats known as the Dedication Doctrine which basically says that anything disclosed in the specification but not claimed must be meant to be dedicated to the public

See Maxwell v J Baker Inc (86 F3d 1098 (1996)) and YBM Magnex Inc v Intl Trade Commn (145 F3d 1317 (1998))

The Trial Court found for Johnson amp Johnson RES appealedo The Trial Court found that the Doctrine of Equivalents applied

The Appellate Court reversedo The Appellate Court found that the Dedication Doctrine was good law and that it

was mean to discourage patent applicants from presenting a broad disclosure in the specification and then filing narrow claims to stop the USPTO from examining the broad claims that could have been claimed by the broad specification

o The Court found that in order for the Dedication Doctrine to apply there has to be multiple distinct embodiments in the specification where only one is claimed not a single broad embodiment with a narrower claim

So follow Maxwell where there were two different ways to tie shoes together but Maxwell only claimed one dont follow Magnex where there was a broad range of a chemical disclosed in the specification but only a narrow range claimed

o The Court noted that if an inventor makes a broad claim that gets struck down and they are forced to settle for a narrow claim things in the denied claim are not considered dedicatedlike the things they didnt claim at all

See Graver Tank v Linde Air Products Co (339 US 605 (1950)

23

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 28: Intellectual Property - Notes, Outline

o The Court looked at the wording of Johnson amp Johnson specification which explicitly said that steel and nickel could be used as a substrate Since Johnson amp Johnson had disclosed those materials but never claimed them they must have meant to dedicate them to the public

Therefore the Dedication Doctrine applies and Johnson amp Johnson cannot assert the Doctrine of Equivalents against RES

In a concurrence it was argued that the Dedication Doctrine is really nothing more than a foreseeability argument Clearly Johnson amp Johnson foresaw the use of steel since they talked about it Since the Doctrine of Equivalents is mostly limited to unforeseeable differences Johnson amp Johnson shouldnt be allowed to apply it against RES

Reverse Doctrine of EquivalentsNever been upheld by the CAFC Equitable doctrine invented by courts to avoid finding infringement

Indirect Infringement1 Active Inducer inducing another to infringe2 Contributory Infringement purchasing and then using to-order parts which infringe

Bard v Advance Cardiovascular (US 1990) ndash sell of catheter for method patent (intent)Held section 271(b) ldquoactively and knowingly aiding and abetting anotherrsquos

direct infringementrdquoSummary If there is sufficient evidence of non-infringing uses than summary judgment is not appropriate in contributory infringement actionFactual issue is whether the catheter could be used for more than just coronary angioplasty making summary judgment inappropriate

Water Technologies v Calco (US 1988) ndash Held ldquoWhile proof of intent is necessary direct evidence is not requiredrdquo

Global-Tech v SEB (US 2011) ndash Held Willful Blindness vs Actual Knowledge

I Defenses

35 USC sect287(c) Protection for ldquomedical practitionersrdquo for ldquomedical activitiesrdquo

InvalidityAttack the underlying validity of the original claim especially in looking for new references

Experimental UseldquoTruly Narrowrdquo ExceptionThe Federal Circuit held that experimental use protects only actions performed ldquofor amusement to satisfy idle curiosity or for strictly philosophical inquiryrdquo

24

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 29: Intellectual Property - Notes, Outline

Interesting point here about user innovations For example think of the app market with smart phones It can truly be beneficial to all parties to allow experimentation on a patented product Example of when NOT to enforce a patent

Inequitable ConductDuty of CandorInequitable conduct renders the entire patent either invalid unenforceable or both

Kingsdown Medical Consultants v Hollister (Fed Cir 1988) Summary Gross negligence in and of itself is not enough for a finding intent to deceive during the patent prosecution process

Exhaustion of Patent RightsImplied license and First SaleOnce an item has been sold involving the patented technology the owner of the physical product is allowed to make repairs Itrsquos a matter of repair in contrast to reconstruction These concepts also limit post-sale control of the article or product

Quanta Computers Inc v LG Electronics Inc (US 1990) ndash Held Because the doctrine of patent exhaustion applies to method patents and

because the License Agreement authorizes the sale of components that substantially embody the patents in suit the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products

Patent MisuseMotion Picture Patents Co V Universal Film Manufacturing Company Et Al

Held Cannot tie other products to licensing a patentCongress softened this holding with 271 (d) section 4 allowing non-staples to be tied to a license

Other Patent MisusesLicensing refusal to license making a license conditional (to acquisition of another

patent purchase of another product) non-metered license grant-back clause field-of-use restrictions

Patent SuppressionPatent Misuse versus Antitrust they are different one not implying the other

Not patent misuse to refuse to license a patentConsiderations of market power

25

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 30: Intellectual Property - Notes, Outline

J Remedies

Injunctive Relief1) Patent as Property rule

a) caveat ebay v MercExchange (US 2006) to get an injunction it used to be automatic for patent law but now is subject to this analysis

(1) Irreparable injury(2) Inadequacy of damages(3) Balancing the hardship of injunction on either party(4) Public Interests

2) Policya) Polaroid v Kodak (D Mass 1985)

i) ldquothe public policy (cue prong 4) at issue in patent cases is the lsquoprotection of rights secured by valid patentsrsquordquo

b) Vitamin v WARF (9th Cir 1944)i) Health related Patent

3) Preliminary Injunctiona) Z4 Technologies v Microsoft (ED Tex 2006)

i) Injunction factors

4) Permanent Injunctiona) Foster v American (2nd Cir 1974)

i) Compulsory License(1) Liability Rule

Damages1) Patent as liability rule2) Polaroid v Eastman (D Mass 1990)

a) ldquo[The] law requires a careful assessment of all market influences when determining lost profit or reasonable royaltyrdquo

3) Reasonable Royalty (the floor for Patent damages)a) Panduit v Stahlin (6th Cir 1978)

i) Hypothetical negotiationb) Georgia Pacific v US Plywood (SDNY 1970)

4) Lost Profits (hard to prove)a) Panduit v Stahlin (6th Cir 1978)

i) Four-factor test for lost profits(1) Royalties received

ii) Lost profits available if there are ldquono adequate substitutesrdquob) Price Erosion

i) Grain Processing v American Maize CAFC 1999)c) ldquoMarket Sharerdquo rule

26

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 31: Intellectual Property - Notes, Outline

i) State v Mor-Flo (CAFC 1995)d) Lost sales of unpatented components or productse) Post-expiration sales

Willful Infringement1) Pre-Knorr-Bremse

a) Upon notice of infringement alleged infringer had an obligation to seek a patent opinionb) Willful infringement triggers treble damagesc) Upon judgment of infringement willfulness implied by

i) Negative patent opinion letterii) No patent opinion letteriii) Withholding patent opinion letter under attorney-client privilege

2) Knorr-Bremse v Dana (CAFC 2004)3) In re Seagate Technology (CAFC 2007)

27

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 32: Intellectual Property - Notes, Outline

IV Trademarks

1) Valid Mark a) Protectable Subject Matterb) Distinctive

i) Classification(1) Inherently Distinctive (Suggestive Arbitrary Fanciful)(2) Secondary Meaning (Descriptive)(3) Generic

c) Usei) Actual Useii) ldquoIntent-to-Userdquoiii) Registration

d) Famous Mark2) Infringement OR

a) False Designation of Origin OR b) Dilution

3) Defense a) Fraudulent Registrationb) Abandonmentc) Use of the Mark to Misrepresent the Sourced) Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)e) Rights of a Junior User of a mark subsequently registered by a Senior Userf) Violations of Antitrust Lawsg) Mark is Functionalh) Equity including Laches Estoppel Acquiescencei) Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)j) Parody (only in some courts)

First PrinciplesINDICATION OF SOURCE ndash IMPROVED TRANSACTION COSTS ndash GOOD WILL ndash

COMPETITION ndash SURVEYS MEASURE ldquoUSErdquo

28

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 33: Intellectual Property - Notes, Outline

A Protectable Subject Matter

A mark must be a ldquoword name symbol or device or any combination thereofrdquo 15 USC sect 1127

Types of Trademarks Service Marks Trade Dress Collective Marks Certification Marks

CasesQualitex v Jacobson (1995) ndash Color

Held The Lanham Act permits the registration of a trademark that consists purely and simply of a color - provided that it has acquired secondary meaning in the market

Facts Petitioner Qualitex Company has for years colored the dry cleaning press pads it manufactures with a special shade of green-gold After respondent Jacobson Products (a Qualitex rival) began to use a similar shade on its own press pads Qualitex registered its color as a trademark and added a trademark infringement count to the suit it had previously filed challenging Jacobsons use of the green-gold color Qualitex won in the District Court but the Ninth Circuit set aside the judgment on the infringement claim because in its view the Lanham Trademark Act of 1946 does not permit registration of color alone as a trademark

Why is trade mark protection better than just trade dressTrademark law helps the holder of a mark in many ways that trade dress protection does not See 15 USC 1124 (ability to prevent importation of confusingly similar goods) 1072 (constructive notice of ownership) 1065 (incontestible status) 1057(b) (prima facie evidence of validity and ownership) Thus one can easily find reasons why the law might provide trademark protection in addition to trade dress protection

Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri Held Plaintiff Zatarains has a trademark for Fish-Fri but not Chick-Fri

batters Oak Grove began marketing fish fry and chicken fry batters so Zatarains sued for trademark infringement Fish-Fri had developed secondary meaning based on sales advertising and length and manner of use whereas the Chick-Fri was a newer product

Proof of secondary meaning is an issue only with respect to descriptive marks suggestive and arbitrary or fanciful marks are automatically protected upon registration and generic terms are unprotectable even if they have acquired secondary meaning

Is the Mark descriptive1 Using the dictionary meaning test Fish-Fri means frying fish 2 Under the imagination test [i]t simply does not require an exercise of the

imagination to deduce that Fish-Fri is used to fry fish

29

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 34: Intellectual Property - Notes, Outline

3 Other manufacturers (competitorrsquos need test) would likely use the name to describe fish-frying batters have actually used the term for some time

ldquoIn assessing a claim of secondary meaning the major inquiry is the consumers attitude toward the mark The mark must denote to the consumer a single thing coming from a single source Coca-Cola Co v Koke Co 254 US 143 146 41 SCt 113 114 65 LEd 189 (1920) Aloe Creme Laboratories 423 F2d at 849 to support a finding of secondary meaning Both direct and circumstantial evidence may be relevant and persuasive on the issuerdquo Surveys and proof of Marketing Efforts

Does Oak Grove have a fair use right to use the trademark Held Yes Although the trademark is valid by virtue of having acquired a secondary meaning only that penumbra or fringe of secondary meaning is given legal protection Zatarains has no legal claim to an exclusive right in the original descriptive sense of the term therefore Oak Grove and Viskos are still free to use the words fish fry in their ordinary descriptive sense so long as such use will not tend to confuse customers as to the source of the goods

Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000 Held We hold that in an action for infringement of unregistered trade dress

under sect 43(a) of the Lanham Act a products design is distinctive and therefore protectible only upon a showing of secondary meaning The judgment of the Second Circuit is reversed and the case is remanded for further proceedings consistent with this opinion

Source Identifying Function-A symbol does not have to identify the exact source but rather must distinguish a source from other sources in the market -Must create a ldquoseparate and distinct commercial impressionrdquo as an indicator of source for consumers in order to be a mark

Trade DressTrade dress was defined in the Taco Cabana Inc v Two Pesos Inc case (1991) as ldquothe total image of the businessrdquo

Types of Product Design (assumed NOT inherently distinctive requires secondary meaning) Product Packaging (assumed inherently distinctive) Tertium Quid (no effing idea)

Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLy TOTALITY The totality of functional elements to create something non-functional ldquoup to the juryrdquo

1 Functionality rather non-functionality is the test must be also be a combinationa Since the Court would not protect individual functional elements Two Pesos was free to copy a

few functional elements However Two Pesos was barred from duplicating the entire combination of the elements that creates Taco Cabanaprimes overall image

30

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 35: Intellectual Property - Notes, Outline

2 Distinctiveness ldquocapable of identifying products or services as coming from a specific sourcerdquo

a The court ruled Taco Cabanaprimes trade dress did contain descriptive elements The totality of the dress was not merely descriptive but also inherently distinctive

3 Secondary meaning It exists when the public recognizes the source of the product or image rather than the product itself (cannot overcome functionality aspects)

a Two Pesos argued that the holder of a protected trade dress that did not have secondary meaning had an unfair advantage The Court disagreed and concluded that no statutory reason existed to place a time-limit on acquiring secondary meaning

b This ruling is important because it represents enhanced protection by increasing the likelihood of a new business obtaining protection of its image

4 Likelihood of confusion similarity between the trade dresses exists the products are similar and the products in question are sold to the same market through similar media channels

a Ownership overall image functionality distinctiveness identifying infringements

Distinctiveness Categories of MarksldquoIn evaluating the distinctiveness of a mark under sect 2 (and therefore by analogy under sect 43(a)) courts have held that a mark can be distinctive in one of two ways First a mark is inherently distinctive if [its] intrinsic nature serves to identify a particular source Ibid In the context of word marks courts have applied the now-classic test originally formulated by Judge Friendly in which word marks that are arbitrary (Camel cigarettes) fanciful (Kodak film) or suggestive (Tide laundry detergent) are held to be inherently 211211 distinctive SeeAbercrombie amp Fitch Co v Hunting World Inc 537 F 2d 4 10-11 (CA2 1976) Second a mark has acquired distinctiveness even if it is not inherently distinctive if it has developed secondary meaning which 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 Inwood Laboratories Inc v Ives Laboratories Inc 456 U S 844 851 n 11 (1982) []rdquo Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000

The Consumer Reaction Test would the reasonable consumer look at the mark and know the product or service Abstraction Better Protection Was something in the mark part of what the consumer was seeking in purchasing the product or service

GENERIC TERM is the name of a particular genus or class of which an individual article or service is but a member Vision Center 596 F2d at 115 Abercrombie amp Fitch Co v Hunting World Inc 537 F2d 4 9 (2d Cir1976) A generic term connotes the basic nature of articles or services rather than the more individualized characteristics of a particular product American Heritage 494 F2d at 11 Generic terms can never attain trademark protection William R Warner amp Co v Eli Lilly amp Co 265 US 526 528 44 SCt 615 616 68 LEd 1161 (1924) Soweco 617 F2d at 1183 Vision Center 596 F2d at 115 Furthermore if at any time a registered trademark becomes generic as to a particular product or service the marks registration is subject to cancellation Lanham Act sect 14 15 USC sect 1064(c) (1976) Such terms as aspirin and cellophane have been held generic and therefore unprotectable as trademarks See Bayer Co v United Drug Co 272 F 505 (SDNY1921) (aspirin) DuPont Cellophane Co v Waxed Products Co 85 F2d 75 (2d Cir1936) (cellophane)

31

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 36: Intellectual Property - Notes, Outline

DESCRIPTIVE TERM identifies a characteristic or quality of an article or service Vision Center 596 F2d at 115 such as its color odor function dimensions or ingredients American Heritage 494 F2d at 11 Descriptive terms ordinarily are not protectable as trademarks Lanham Act sect 2(e)(1) 15 USC sect 1052(e)(1) (1976) they may become valid marks however by acquiring a secondary meaning in the minds of the consuming public See id sect 2(f) 15 USC sect 1052(f) Examples of descriptive marks would include Alo with reference to products containing gel of the aloe vera plant Aloe Creme Laboratories Inc v Milsan Inc 423 F2d 845 (5th Cir1970) and Vision Center in reference to a business offering optical goods and services Vision Center 596 F2d at 117 As this court has often noted the distinction between descriptive and generic terms is one of degree Soweco 617 F2d at 1184 Vision Center 596 F2d at 115 n 11 (citing 3 R Callman The Law of Unfair Competition Trademarks and Monopolies sect 704 (3d ed 1969)) American Heritage 494 F2d at 11 The distinction has important practical consequences 791791 however while a descriptive term may be elevated to trademark status with proof of secondary meaning a generic term may never achieve trademark protection Vision Center 596 F2d at 115 n11

SUGGESTIVE TERM suggests rather than describes some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services Soweco 617 F2d at 1184 Vision Center 596 F2d at 115- 16 A suggestive mark is protected without the necessity for proof of secondary meaning The term Coppertone has been held suggestive in regard to sun tanning products See Douglas Laboratories Inc v Copper Tan Inc 210 F2d 453 (2d Cir1954)

ARBITRARY OR FANCIFUL TERMS bear no relationship to the products or services to which they are applied Like suggestive terms arbitrary and fanciful marks are protectable without proof of secondary meaning The term Kodak is properly classified as a fanciful term for photographic supplies see Eastman Kodak Co v Weil 137 Misc 506 243 NYS 319 (1930) (Kodak) Ivory is an arbitrary term as applied to soap Abercrombie amp Fitch 537 F2d at 9 n6

Unprotectable Symbolshellipuntil they acquire secondary meaning Surnames Geographic References

Deceptively Mis-descriptive Marks Likely to Cause Confusion with an Existing MarkFunctional Matter essential to the use or purpose of the device affects the cost or quality of

the device or exclusive use by one seller would put competitors at a significant nonreputation-related disadvantage

Primarily Geographically Deceptively Mis-descriptive Marks materially deceptive to consumers

Suggesting False ConnectionImmoral or Scandalous Matter

32

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 37: Intellectual Property - Notes, Outline

Disparaging Marks litigation is ongoing on whether WASHINGTON REDSKINS falls into this category

Government SymbolsNames or Likenesses of Individuals is the person well known enough that consumers would

interpret the name or likeness as an endorsement

B Establishing Trademark Rights

UseGOODS must have the trademark on goods which are sold or transportedSERVICE must be displayed or in advertisements

Prior use of the mark does not count against the owner but reduced use can be a consideration in the infringement analysis

The use must be ldquobona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in a markrdquo 15 USC 1127

IN COMMERCE defined as ldquoall commerce which may lawfully be regulated by CongressrdquoDemonstrate a continuing effort to establish the ark as a source identifier

RegistrationSupplemental vs Primary Register

Benefits of filing constitutes constructive use nationwide in effect ldquoprima facia evidence of the validity of the registered mark and of registration o the markrdquo 15 USC 1111 Greater remedies Necessary for incontestability Yields constructive notice of ownership Broader protection against unauthorized importation Owner may use reg (which was already the case with unregistered mark) It will show up in searches by others

Intent-to-use application bona fide intent to use cannot just sit to retain the option of use only establishes a priority date (only bona fide use allows an owner to enforce a mark)

The application requirements 15 USC 1051 applicantrsquos domicile and citizenship date of first use date of first use in commerce the goods or services connected to the mark drawing of the mark verified statement to truth of applicationrsquos contents that applicant is the actual owner of the mark and that no other person has a right to use such mark in commerce Then the process and back-and-forth with the examining attorney of the USPTO begins including disclaimers by the applicant for generic elements of the mark

Incontestability essentially after five years the registrant does not need to show secondary meaning

33

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 38: Intellectual Property - Notes, Outline

C Ownership

15 USC 1055 OWNERSHIP FOLLOWS CONTROL OF USE

Priority Actual Use is the use required to support registration The priority date will still be the date of

use as opposed to any subsequent date of filing Registration is not however necessary to establish priority

Descriptive Marks have the priority date of when the mark attained secondary meaning

Constructive Use is established by the date of an ldquointent-to-userdquo application 15 USC sect 1051 (b)(1) ldquoA person who has a bona fide intention under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the [PTO]rdquo

Analogous Use advertising trade publications or other marketing

Zazu Designs v LOreal SA (7th Cir 1992) Held Do ZHDs sale of hair products under the ZAZU name before LOreals

registration give it national trademark rights Held No Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated hellip But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration The Lanham Act allows only trademarks used in commerce to be registered 15 USC sect1051(a) Here selling a few products to friends in other states was not enough to provide national trademark protection absent registrationDoes LOreals knowledge of ZHDs intention to create hair products prevent it from using the ZAZU name Held No to hold otherwise would penalize entities for gathering knowledge and ignorance would be rewarded Intent establishes no right to a mark only use does Because the mark was not registered for use in conjunction with hair products any knowledge LOreal may have had of ZHDs plans is irrelevant

Facts Comair a United States licensee of LOreal in France wanted to market hair coloring products LOreal hired Wordmark to come up with a name and it suggested ZAZU LOreal searched and found that Riviera Slacks Inc held a federal trademark registration for the name for clothing LOreal paid Riviera Slacks $125000 for a covenant not to sue if LOreal used the name LOreal also found Zazu Hair Designs (here ZHD) a hair salon in Hinsdale Illinois which had registered the trade name as a service name in Illinois LOreal repeatedly called and visited to see if the salon

34

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 39: Intellectual Property - Notes, Outline

sold hair products ZHD stated that it did not but intended to do so LOreal applied for a federal registration on June 12 1986 after having shipped some of its ZAZU product across state lines to be able to make the federal application Unbeknownst to LOreal ZHD had started selling some hair products to its customers in the store and had shipped some samples to friends in Texas and Florida

Reasoning ldquoIn finding that ZHDS few sales secured rights against the world the district court relied on which hold that a single sale combined with proof of intent to go on selling permit the vendor to register the mark But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registrationrdquo

Dissent (fails to distinguish de minimus use and de minimus intent) Cudahay By ordering lots of bottles and making sales to customers many of whom came from out of state ZHD had more than de minimis use LOreal knew of ZHDs intent so it acted out of bad faithmdashit paid Riviera Slacks to preclude its acting on its intention after all and clothing is a lot farther from hair products than is a hair salon A service mark can be infringed by its use on a closely related product

AssignmentMust be in a signed writing Will the transferee deliver substantially the same product to

consumers such that use of the mark by the transferee will not mislead consumersCourts in finding an assignment invalid may enjoin the transferee from enforcing the mark or

consider the mark abandoned

Loss of RightINTENT TO ABANDON

Use Discontinued with Intent Not to Resume Use vague conditional plans to resume using a mark are insufficient to overcome the assumption of lsquointent not to resumersquo

Loss of Rights Through Mark Becoming Generic public perception of a category rather than good When marketing efforts are TOO effective

Other Ways to Lose Significance as a Mark loss of significance (if licensing mark for use by another you need to make sure that the licensee will meet the standards for which the mark has stood) Permitting widespread infringement (especially if some are licensees and others are not) can constitute abandonment

35

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 40: Intellectual Property - Notes, Outline

D Standard Infringement

1 Ownership of a Valid MarkValid Mark Incontestable status Section A of Trademarks pretty much covers this

2 In CommerceAs broad as Congressrsquo power to regulate interstate commerce even advertising has counted

3 The Alleged Infringer UseThis sense of the word lsquousersquo is broader than the one required to establish Trademark rights but still must somehow be used to indicate source

4 The Mark or a Similar SymbolMust actually use the mark circular yes but just imagine that the relevant consumer would also get puns and references

5 In Connection with selling or marketing of Goods or Services ANDThe goods or services need to be materially similar to those of the allegedly infringed mark

6 Likelihood of Confusion Mistake or Deception (gets an injunction)A probability (not mere possibility) of confusion LOOKS AT BOTH MARKSA Necessary Showing of Confusion

1 Implied Endorsement 2 Initial Interest Confusion (using anotherrsquos mark as a foot-in-the-door technique) 3 Post-Sale Confusion (like impressing your friends with a fake rolex) 4 Reverse Confusion (making the first product seem like a knock-off of the second to

market) B Factors for Determining Likelihood Confusion

1 Strength of Plaintiffrsquos Mark2 Degree of Similarity between the Marks SIGHT SOUND MEANING3 Proximity of the products in the marketplace4 Likelihood that the prior owner will bridge the gap expand the product brand5 Actual Confusion (GETS YOU DAMAGES)6 Defendantrsquos good faith in adopting its own mark7 Quality of Defendantrsquos product8 Care and Sophistication of the Relevant Consumers

AMF INC v Sleekcraft Boats (9th Cir 1979) ndash Slickcraft and Sleekcraft Likelihood ConfusionHeld 1954 Slickcraft is using this name until 1969 Sleekcraft was new starting

in late 1968 Appellate court overturned the federal court looking the above 8 factors

What about intent As a matter of infringement itrsquos usually just strict liability Matters in

36

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 41: Intellectual Property - Notes, Outline

determining remedies Remedy here is to begin labeling more clearly

Limited RemedyCourt jury-rigs a limited remedy Sleekcraft was required to use its logo on all advertising design and products

E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip

Lanham Act Section 43(a) ndash Protects registered and unregistered marks(1) Any person who on or in connection with any goods or services or any container for goods

uses in commerce any word term name symbol or device or any combination thereof or any false designation of origin false or misleading description of fact or false or misleading representation of fact which--

(A) is likely to cause confusion or to cause mistake or to deceive as to the affiliation connection or association of such person with another person or as to the origin sponsorship or approval of his or her goods services or commercial activities by another person or

(B) in commercial advertising or promotion misrepresents the nature characteristics qualities or geographic origin of his or her or another persons goods services or commercial activities shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act

False Advertising

Cybersquatting

F Dilution

Starts with the Famous Mark and looks to what elements of it are being diluted

Subject to the principles of equity the owner of a famous mark shall be entitled to an injunction against another person who commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark regardless of the presence or absence of actual or likely confusion of competition or of actual economic injury

hellipdilution protection law aims to protect sufficiently strong trademarks from losing their singular association in the public mind with a particular producthellip --Wikipedia

37

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 42: Intellectual Property - Notes, Outline

THE CLAIM(1) plaintiff owns a famous mark that is distinctive(2) defendant has commenced using a mark in commerce that allegedly is diluting the

famous mark(3) similarity between the defendantrsquos mark and the famous mark gives rise to an

association between the marks and(4) association is likely to impair the distinctiveness of the famous mark OR likely to

harm the reputation of the famous mark

Definition of ElementsFAMOUS MARKS ONLY ldquoA mark is famous when it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the markrsquos owner

dilution by blurring as the association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Id sect 1125(c)(2)(B)

dilution by tarnishment as the association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark Id sect 1125(c)(2)(C)

Exclusions Defenses

(A) Any fair use including a nominative or descriptive fair use or facilitation of such fair use of a famous mark by another person other than as a designation of source (aka a parody cannot be TMed itself) for the personrsquos own goods or services including use in connection withmdash

(i) advertising or promotion that permits consumers to compare goods or services or

(ii) identifying and parodying criticizing or commenting upon the famous mark owner or the goods or services of the famous mark owner

(B) All forms of news reporting and news commentary(C) Any noncommercial use of a mark

G Defenses

1 Fraudulent Registration2 Abandonment3 Use of the Mark to Misrepresent the Source4 Fair Use as an individualrsquos name or descriptive term (eg fish-fry penumbra)5 Rights of a Junior User of a mark subsequently registered by a Senior User6 Violations of Antitrust Laws7 Mark is Functional8 Equity including Laches Estoppel Acquiescence9 Nominative Use (product canrsquot be identified without the mark eg Boston Marathon)10 Parody (only in some courts)

38

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 43: Intellectual Property - Notes, Outline

Playmate of the Year could refer to herself as such based on Fair Use

Parody

Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION Held just enough of the original design to allow the consumer to appreciate the

point of parody but stop well short of appropriating the entire marks that LVM claims Through a detailed analysis of likelihood of confusion factors the court emphasized differences in the parties marks and marketing to support its affirmation of the lower-court decision

GenericideA generic term is one for which the primary significance to the relevant consuming public is to identify Poor Xerox

Evidence third-party generic use of the term dictionaries media use

Murphy Bed v Interior Sleep Systems - GENERICIDE Held necessary to refer to the product

Functionality

TrafFix v Marketing Displays ndash Necessary Element Patent Trademark Held 1) Essential to the functioning of the product

2) Effect on cost or quality3) put competitors at a disadvantagethose two springs are necessary to make the spring-up sign for a purchaser to have faith that the product will do what it is supposed to

Naked Licensing

Don Donuts v Held hellip

Fair UseCould be 1st amendment can be right to DESCRIBE

Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go PartyrdquoHeld TITLE titles are not usually indicative of a source but rather what the

subject matter of the art ARTISTIC RELEVANCE allows fair use DILUTION It is dilutive but fair use exception Protected as a NONCOMMERCIAL SPEECH it is the artistic speech which is then being sold Barbie Girl is protected as a parody under the trademark

39

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 44: Intellectual Property - Notes, Outline

doctrine of nominative use and under the First Amendment to the US ConstitutionNB Parody must be of the mark being played on A Dr Suess style poem cannot be used to make fun of airplane food because otherwise itrsquos just being used to ldquoinitial interestrdquo

KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysisNB Plaintiffrsquos burden is to show likelihood of confusion

Held The Court ruled that a defendant in a trademark infringement action raising the affirmative defense of fair use has no independent burden to negate the likelihood of consumer confusion

FACTS Both respondent Lasting Impression I Inc (Lasting) and petitioner KP Permanent Make-Up Inc (KP) have used the phrase micro color or its variants in marketing their products Lasting registered with the US Patent and Trademark Office the trademark Micro Colors in white letters within a black square

After KP produced advertising with the term microcolor in a large stylized typeface Lasting demanded that KP stop using the term claiming it infringed its trademark KP sued Lasting in the US District Court for the Central District of California seeking a declaratory judgment that its language did not infringe the mark and Lasting counterclaimed claiming KP had infringed it

The District Court finding that KP had used the mark only descriptively and had employed the term before KP registered the mark concluded that KP had made out the affirmative defense of fair use of the mark and without considering the issue of the likelihood of consumer confusion entered summary judgment in favor of KP on Lastings counterclaim The US Court of Appeals for the Ninth Circuit reversed holding that the District Court erred in granting summary judgment on the fair use defense without considering the issue of consumer confusion The Supreme Court granted KPs petition for certiorari to resolve a disagreement among the courts of appeals on the significance of the issue of consumer confusion to the defense of fair use

40

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 45: Intellectual Property - Notes, Outline

H Remedies

General Rule in most circuits now is that lost profits do not require willful infringement (intent)

Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysisISSUE Is Bic infringing Lindyrsquos Auditor mark

Held ldquoWe remand the case to the district court with instructions to enter an order enjoining Bic from using the word Auditors on or in connection with its pens We additionally instruct the district court to order an accounting and to award damages and other relief as appropriaterdquo

ldquoEven if a customer realized at the time of delivery that the pens delivered were not the pens supposedly ordered the customer might decide not to bother to return and exchange the pens at that late stagerdquo INITIAL INTEREST CONFUSION

CITE See Park N Fly 782 F2d at 1509 (where marks are virtually identical services provided are identical and marketing channels are convergent there is a likelihood of confusion despite no evidence of actual confusion weak mark and no intent to capitalize)

Big O Trie Dealers Inc v Goodyear ndash analysis

Finally Goodyear challenges the jurys verdict awarding Big O $28 million in compensatory damages and $168 million in punitive damages Goodyear contends Big O failed to prove either the fact or the amount of damages Big O asserts the evidence supporting the fact of damages falls into two categories (1) Goodyears enormous effort to adopt use and absorb Big Os trademark virtually destroyed Big Os ability to make any effective use of its Big Foot trademark and (2) Goodyears false statements that Bigfoot was available only from Goodyear created the appearance of dishonesty and wrongful conduct by Big O thereby harming its reputation within the trade and with the public We agree with the district court that there is sufficient evidence to support the jurys finding of the fact of damages

COST OF FIXING INFRINGEMENTBig O also asserts the evidence provided the jury with a reasonable basis for determining the amount of damages Big O claims the only way it can be restored to the position it was in before Goodyear infringed its trademark is to conduct a corrective advertising campaign Big O insists it should be compensated for the advertising expenses necessary to dispel the public confusion caused by Goodyears infringement Goodyear spent approximately $10 million on its Bigfoot advertising campaign[1] Thus

41

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 46: Intellectual Property - Notes, Outline

Big O advances two rationales in support of the $28 million award (1) there were Big O Tire Dealers in 28 percent of the states (14 of 50) and 28 percent of $10 million equals the amount of the award and (2) the Federal Trade Commission generally orders businesses who engage in misleading advertising to spend approximately 25 percent of their advertising budget on corrective advertising and this award is roughly 25 percent of the amount Goodyear spent infringing on Big Os trademark

42

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 47: Intellectual Property - Notes, Outline

V Copyright

A Copyrightable Subject Matter

17 USC sect 102 (a) - PROTECTABLE

(a) Copyright protection subsists in accordance with this title in original works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived reproduced or otherwise communicated either directly or with the aid of a machine or device Works of authorship include the following categories

Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book Held ldquocopyrighthellipextend[s] only to those components that are original to the

authorrdquo NOT infringement to snag a list of names and numbers simply arranged alphabetically

ORIGINAL WORK HURDLE1) Independently created by the author AND2) demonstrate a modicum of creativity7

DERIVATIVE WORK HURDLE1) Transformative

Authorship scope is very broad but does exclude everyday conversation and behavior purely mechanical works words and short phrases a personrsquos identity and works with no human author

Fixed Medium the moment of attachment of copyright protection AUTHORIZED FIXATION

(1) literary works (2) musical works including any accompanying words(3) dramatic works including any accompanying music(4) pantomimes and choreographic works(5) pictorial graphic and sculptural works(6) motion pictures and other audiovisual works(7) sound recordings and(8) architectural works

7 Beyond slavish copying

43

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 48: Intellectual Property - Notes, Outline

17 USC sect 102 (b) ndash NOT PROTECTABLE

(b) In no case does copyright protection for an original work of authorship extend to any idea procedure process system method of operation concept principle or discovery regardless of the form in which it is described explained illustrated or embodied in such work

Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY Held this was the first US Supreme Court case to fully explain this doctrine

holding that exclusive rights to the useful art (in this case bookkeeping) described in a book was only available by patent the description itself was protectable by copyright In Harper amp Row Publishers Inc v Nation Enters 471 US 539 556 (1985) the Supreme Court stated that copyrights ideaexpression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an authors expression

No Disclosure No Examination (by the PTO)

ldquoThe object of the one is explanation the object of the other is userdquo

Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION FACTS Borland released a spreadsheet product Quattro Pro that had a

compatibility mode in which its menu imitated that of Lotus 1-2-3 a competing product None of the source code or machine code that generated the menus was copied but the names of the commands and the organization of those commands into a hierarchy were virtually identical

Quattro Pro also contained a feature called Key Reader which allowed it to execute Lotus 1-2-3 keyboard macros In order to support this feature Quattro Pros code contained a copy of Lotuss menu hierarchy in which each command was represented by its first letter instead of its entire name

PROC The First Circuit reversed the district courts decision agreeing with Borlands legal theory that considered the menu hierarchy a method of operation The court agreed with the district court that an alternative menu hierarchy could be devised but argued that despite this the menu hierarchy is an un-copyrightable method of operation

HELD Lotus petitioned the United States Supreme Court for a writ of certiorari The Supreme Court affirmed the circuit courts opinion in a 4-4 anonymous tie vote with Justice Stevens recusing Lotuss petition for a rehearing by the full court was denied By the time the lawsuit ended Borland had sold Quattro Pro to Novell and Microsofts Excel spreadsheet had emerged as the main challenger to Lotus 1-2-3

44

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 49: Intellectual Property - Notes, Outline

The Lotus decision establishes a distinction in copyright law between the interface of a software product and its implementation The implementation is subject to copyright The public interface may also be subject to copyright to the extent that it contains expression (for example the appearance of an icon) However the set of available operations and the mechanics of how they are activated are not copyrightable This standard allows software developers to create original clones of copyrighted software products without infringing the copyright

Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONSHELD Plaintiff Morrissey created a set of rules for a promotional sweepstakes

contest and defendant Procter amp Gamble took those rules changed a few words and used them in their own sweepstakes Are sweepstakes rules copyrightable subject matter Held Aldrich No Although in general the exact expression of an idea is copyrightable a subject can be so narrow that it necessarily requires one of a small number of forumlations to express The expressions of such narrow subjects are not copyrightable as they would effectively allow cornering the market on those subjects We cannot recognize copyright as a game of chess in which the public can be checkmated Here sweepstakes rules can only be be described in a limited number of expressions as is therefore not protectable by copyright

Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACKCONCEPTUAL SEPARABILITY CANNOT copy FUNTIONAL ASPECTSUSEFUL ARTICLE

Story Sculpturehellipwhen a friend G Duff Bailey a bicycle buff and author of numerous articles about urban cycling was at Levines home and informed him that the sculptures would make excellent bicycle racks

Held Brandir designed a sleek new metal bike rack The racks were featured in design magazines and won an award from the Industrial Designers Society Cascade began copying the bike racks Brandir sued for copyright infringement Cascade argued that Brandir could not copyright the bike racks because they werent works of art they were utilitarian and utilitarian items (aka useful articles) are not copyrightable

The Trial Court found for Cascade Brandir appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and found that works with utilitarian features are only copyrightable to the extent that the design features can be identified separately from and are capable of existing independently of the utilitarian aspects of the articleThis separablity can be either physical or conceptual The Court interpreted sect101 to mean that if design elements reflect a merger of aesthetic and functional considerations the artist aspects of a work cannot be said to be conceptually separable from the utilitarian elements Conversely where design elements can be identified as reflecting the

45

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 50: Intellectual Property - Notes, Outline

designers artistic judgment exercised independently of functional influences conceptual separability exists

Basically the courts must look at the features of a work and decide if the creator chose those features for design reasons or aesthetic reasons

17 USC sect 103 (a) ndash Infringing Works Not Protectableldquoprotection for a work employing pre-existing material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfullyrdquo

17 USC sect 105 ndash Government Works NOT protectableLegal document Necessary to follow the law Would the work exist if money couldnrsquot be recouped

B Copyright Ownership

Term of Copyright

Who is the original Author1) Individual Works

a) copyright vests with fixationb) Who was in charge That Titanic example

2) Made for Hirea) Prepared in scope of employment OR

i) Sub-question Employment employee or independent contractor(1) Hiring partyrsquos right and actual control over means and methods of production(2) Source of instruments and tools(3) Location of production(4) Duration of relationship(5) Whether Hiring party can assign or delegate additional tasks(6) Hiring partyrsquos say over when and how long to work(7) Method of payment(8) Hiring partyrsquos role is hiring and paying assistants(9) Whether work is a regular part of Hiring partyrsquos business(10) Whether Hiring party is a business(11) Provision of employee benefits(12) The tax treatment of the hired party

ii) Sub-question Scope a little bit of Agency law(1) Whether the work is of the type that lsquoEE is employed to perform(2) Work occurs substantially within authorized work hours AND(3) Workrsquos purpose at least in part is to serve the employer

46

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 51: Intellectual Property - Notes, Outline

Community for Creative Non-Violence v Reid490 US 730 (1989)

Held CCNV wanted a sculpture to illustrate the plight of the homeless They contracted with a sculptor named Reid to make the sculpture CCNV paid for the materials but Reid donated his time CCNV provided input on what the sculpture was to entail but Reid retained significant creative control Eventually the sculpture was finished and CCNV paid $15k However when they announced plans to take the sculpture on a multi-city tour Reid refused to give up possession of it and filed a certificate of copyright registration Reid argued that he was a co-author of the sculpture CCNV argued that they paid for the sculpture and were the ones who directed its creation Therefore Reids contribution did not make him a co-author since it was just work for hire

Procedure Trial Court found for Reid CCNV appealed The Trial Court found that the sculpture was a work for hire under 17 USC sect101(1) because CCNV was the motivating force behind the sculptures production The Appellate Court reversed CCNV appealed The Appellate Court found that Reid was not an employee of CCNV but instead was an independent contractor Therefore it did not meet the definition of a work for hire under sect101(1) (works prepared by an employee) Note that Reid could not have been covered by sect101(2) (works prepared by an independent contractor) because under that clause the parties must expressly agree in a written instrument signed by them that the work shall be considered a work made for hire

The US Supreme Court affirmed

b) The Work isi) Specially ordered or commissioned ANDii) Falls into one of the nine categories ANDiii) The parties sign an agreement designating it to be a work made for hireiv) NB at a minimum a party is likely entitled to an implied license

3) Joint Authors ndashThomas v Larson about the musical RENTa) Each author contributed copyrightable expression ANDb) Each author intended to be a joint author when the work was created

Aalmuhammed v Lee202 F3d 1227 (9th Cir 1999)

Aalmuhammed was an expert on Malcolm X He was hired by Lee to be a consultant for a movie about Malcolm X Aalmuhammed suggested script revisions offered direction to some actors and helped with editing When the movie was released the credits listed Aalmuhammed as a technical consultant He wanted to be considered a co-author so he sued

47

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 52: Intellectual Property - Notes, Outline

Aalmuhammed argued that his contributions to the film were significant enough to make the work a joint work

The Trial Court found for Lee Aalmuhammed appealed The Appellate Court affirmed The Appellate Court looked to 17 USC sect101 and noted that in order to be a co-author of a joint work a person must make an independently copyrightable contribution to the whole work The Court found that Aalmuhammeds contributions to the work were enough to be independently copyrightable However the Court found that Aalmuhammed was not an author

The Court looked to Burrow-Giles Lithographic Co v Sarony (111 US 53 (1884)) which held that an author (of a photograph) is the person who has superintended the arrangement who has actually formed the picture by putting the person in position and arranging the place where the people are to be - the man who is the effective cause of that The Court found that Aalmuhammed was not superintending anything He was working for Lee the movies director Lee controlled all aspects of the movie In addition there was never an intent on the part of Lee or the movies producers to make Aalmuhammed a co-author It was strictly work for hire The Court noted that even Lee was under contract with the movie studio in a work for fire arrangement and so was not even an author himself It would be absurd to find that Aalmuhammed was author when Lee was not

The Court found that it was good public policy to restrict the definition of author Otherwise people like Lee would never consult others because theyd be worried about losing control of the rights That would make the arts less accurate and interesting

4) Collective Worksa) look to definition in 17 USC sect101b) rights in collective work limited to that work and revision

i) What constitutes a revision is a likely point of litigation

Ownership of a copy of the copyright is not ownership of the copyright

Transfers1) Selling the Copyright

a) Transfer defined broadly in 17 USC sect101b) Requires writing 17 USC sect204(a)c) Recordation with US Copyright Office 17 USC sect301(d) First to File system

2) Exclusive Licensesa) Requires writing

3) Nonexclusive Licenses4) Open Source Licenses and Creative Commons

48

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 53: Intellectual Property - Notes, Outline

a) General Public License (GPL)i) ldquohellipbecause permission to use the code is conditioned on compliance with the

licenserdquo Jacobsen v Katzerb) Creative Commons Restrictions

i) Non-Commercial Useii) No Derivative Worksiii) Share Alike ndash any new work carries with it the licensing terms of the first

Termination Right17 USC sect203 letrsquos reconsider things after 35 yearshellip

C Exclusive Rights

To establish infringement plaintiff must show1) Ownership of a valid copyright 2) Copying of constituent elements of the work that are original balancing of

a) ACCESS to the allegedly infringed workb) SUBSTANTIALLY SIMILAR to the allegedly infringed work

i) Objectively element by element expert testimony et ceteraii) Subjectively ldquohunchrdquo overall artistic slant hellip8

3) Was the copying improper

Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY154 F2d 464 (2d Cir 1946)

Arnstein was a songwriter who had published a number of popular songs He claimed that another songwriter named Porter had plagiarized some of his songs He sued for copyright infringement Arnstein argued that Porter had stooges fooling Arnstein around and had even ransacked his apartment and stole some of his unpublished songs Porter argued that he had never heard any of Arnsteins songs and that he came up with his songs himself (aka independent creation)

The Trial Court found for Porter in summary judgment Arnstein appealed The Trial Court found that Porters songs were not substantially similar The Court relied on the testimony of expert witnesses about the similarity of the songs The Appellate Court reversed and remanded The Appellate Court found that generally there are two elements to establishing infringement There must be evidence that the defendant had access to the copyrighted work There must be evidence that the works are substantially similar The Court found that whether two songs were substantially similar enough to constitute copyright infringement was a matter of fact for a jury to decide

So they remanded the case for a jury trial

8 Different circuits balance this differently but the objective and subjective overlay is fairly common

49

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 54: Intellectual Property - Notes, Outline

Nichols v Universal Pictures CorporationJudge Learned Hand writing for the Court noted that protection of literature cannot be limited to the exact text or else an infringer could get away with copying by making trivial changes The question then is whether the part taken was substantial However it is impossible to set a firm boundary demarcating the line between work and ideas he said stating her copyright did not cover everything that might be drawn from her play its content went to some extent into the public domain In this case there was no infringement as the ideas that are copied are really universal concepts and stock characters

Characters not protectableldquoIf Twelfth Night were copyrighted it is quite possible that a second comer might so closely imitate Sir Toby Belch or Malvolio as to infringe but it would not be enough that for one of his characters he cast a riotous knight who kept wassail to the discomfort of the household or a vain and foppish steward who became amorous of his mistress These would be no more than Shakespeares ideas in the play as little capable of monopoly as Einsteins Doctrine of Relativity or Darwins theory of the Origin of Species It follows that the less developed the characters the less they can be copyrighted that is the penalty an author must bear for marking them too indistinctlyrdquo

Abstraction Test But when the plagiarist does not take out a block in situ but an abstract of the whole decision is more troublesome Upon any work and especially upon a play a great number of patterns of increasing generality will fit equally well as more and more of the incident is left out The last may perhaps be no more than the most general statement of what the play is about and at times might consist only of its title but there is a point in this series of abstractions where they are no longer protected since otherwise the playwright could prevent the use of his ideas to which apart from their expression his property is never extendedrdquo (emphasis added)hellipIf the defendant took so much from the plaintiff it may well have been because her amazing success seemed to prove that this was a subject of enduring popularity Even so granting that the plaintiffs play was wholly original and assuming that novelty is not essential to a copyright there is no monopoly in such a background Though the plaintiff discovered the vein she could not keep it to herself so defined the theme was too generalized an abstraction from what she wrote It was only a part of her ideas

50

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 55: Intellectual Property - Notes, Outline

Reproduction Rights

Sony and GroksterBad Facts Making money from advertisement Luring consumers from Napster Attempting to sell ads to copyright holders themselves

Unlike Sony Groksterrsquos money is dependent on use of the program for infringement as opposed to purchase of the program itself

Leading to the induced

Adaption RightDerivative Works Sequels Spin-offs Same work in a new medium

Anderson v Stallone ndash unprotect-able bc derivative work of other copyright NOT TRANSFORMATIVE

Facts Δ Stallone is a famous actor who starred in and wrote the scripts for Rocky I II amp III In 1982 Δ informed the press that he intended to write a fourth movie and was thinking about making it based off of world events the Cold War and maybe having it involve a United States fighter going to Russia to fight the Russian Red In June 1982 after viewing Rocky III π who had no connection to the previous movies or the Δ wrote a treatment entitled Rocky IV The treatment incorporated the characters that Δ created in the previous movies Π (who is an attorney and was accompanied by an attorney) met with MGM executives to discuss the possibility of his treatment being used as the basis for the Rocky IV script The studio executives suggested that he sign a release to relieve MGM from liability stemming form use of the treatment In April 1984 π requested compensation for the alleged use of his treatment in the forthcoming Rocky IV movie In July 1984 Δ discussed his script on the Today Show Π felt that Δ was discussing the story that he had written Δ completed the Rocky IV script in October 1984 and the film was released in November 1985

Issue Was the Δ script and eventual movie a copyright infringement on the π treatment that he had written before Δ wrote the script

Rule In order for a π to win a copyright infringement claim π must prove that he owns the copyright and that the Δ copied the πrsquos copyrighted work

Holding No The court concluded that the Δrsquos script and movie did not infringe any copyright protection of the π Rocky IV treatment Thus the court granted the Δrsquos motion for summary judgment

51

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 56: Intellectual Property - Notes, Outline

Reasoning The court granted the Δ motion for summary judgment based on two separate grounds First the court said that the π treatment is an infringing work that is not entitled to copyright protection Second the court said that Rocky IV is not substantially similar to π treatment and no reasonable jury could find that Rocky IV is a picturization of π script The court reasoned that the characters in the Rocky movies are some of the most recognizable and one of the most highly delineated groups of characters in modern American cinema Also the court said that the interrelationships between the characters are the central parts of all of the movies The court thus concluded that the Rocky characters are delineated so extensively that they are protected from bodily appropriation when taken as a group and transposed into a sequel by another author The court also stated that π did not put forth any evidence to rebut the Δrsquos showing that Rocky characters are so highly delineated that they warrant copyright protection Next the court found that the characters were so highly developed and central to the movie that they constituted the ldquostory being toldrdquo The court came to this conclusion because the movies revolve around the characters their development and their relationships and does not revolve around intricate plots or story lines The court said that the same evidence which supports the findings of delineation of the characters supports the findings that the characters are the ldquostory being toldrdquo The court concluded that since Δ owns the copyrights for the first three Rocky movies he has the exclusive right to prepare derivative works and that Δ treatment is an unauthorized derivative work and that π actually infringed Δ copyright

Distribution RightImportation Right The Grey Goods Problem

Performance RightVery broad

Display Right

D Fair Use Other Limitations on Exclusive Rights

Fair Use

sect107 Limitations on exclusive rights Fair useldquoNotwithstanding the provisions of sections 106 and 106A [17 USC sect sect106 and 106A] the fair use of a copyrighted work including such use by reproduction in copies or phonorecords or by any other means specified by that section for purposes such as criticism comment news reporting teaching (including multiple copies for classroom use) scholarship or research is not an infringement of copyright In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

52

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 57: Intellectual Property - Notes, Outline

1 purpose and character of the use including whether such use is of a commercial nature or is for nonprofit educational purposes

2 nature of the copyrighted work3 amount and substantiality of the portion used in relation to the copyrighted work as a

whole AND4 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 factorsrdquo

Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)Facts The Nation Magazine got a copy of President Gerald Fordrsquos

autobiography just prior to its publication date The Nation then included a verbatim quotation of President Fordrsquos thoughts at the time of pardoning Nixon 300 of 200000 words but the crux of the work

Reasoning Unpublished key factor against fair use | News is favored fair use but was also commercial use | The Nation could reported and copied unprotected facts but chose to use protected expression | The portion taken was ldquothe heart of the workrdquo | Specific harm was shown with Timersquos cancellation of its prepublication excerpts

Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReallyThe weird argument why didnrsquot you choose this other song Only Allusion not parody

Facts The members of the rap music group 2 Live CrewmdashLuther Campbell Fresh Kid Ice Mr Mixx and Brother Marquismdashcomposed a song called Pretty Woman a parody based on Roy Orbisons rock ballad Oh Pretty Woman The groups manager asked Acuff-Rose Music if they could license Roy Orbisons tune for the ballad to be used as a parody Acuff-Rose Music refused to grant the band a license but 2 Live Crew nonetheless produced and released the parody

The lower court rejected fair use and the Supreme Court reversed and remanded demanding a more nuanced analysis (ouch) Is the parody more likely to be fair use than a parody that simply took material to free-ride on the efforts of others

Reasoning Parody must borrow from the original | Parody was transformative | Criticism and comment is highly protected fair use

The Court on remand wanted a finding of whether there was a showing of market harm did the rap version decrease the potential licensing value of the original

53

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 58: Intellectual Property - Notes, Outline

Procedure Almost a year later after nearly a quarter of a million copies of the recording had been sold Acuff-Rose sued 2 Live Crew and its record company Luke Skyywalker Records for copyright infringement The District Court granted summary judgment for 2 Live Crew holding that its song was a parody that made fair use of the original song under sect 107 of the Copyright Act of 1976 (17 USC sect 107) The Court of Appeals reversed and remanded holding that the commercial nature of the parody rendered it presumptively unfair under the first of four factors relevant under sect 107 that by taking the heart of the original and making it the heart of a new work 2 Live Crew had taken too much under the third sect 107 factor and that market harm for purposes of the fourth sect107 factor had been established by a presumption attaching to commercial uses

1) SONY ldquoWhen looking at the purpose and character of 2 Live Crews use the Court found that the more transformative the new work the less will be the significance of the other three factors The court found that in any event a works commercial nature is only one element of the first factor enquiry into its purpose and character quoting Sony Corp of America v Universal City Studios Inc 464 US 417 The Supreme Court found the Court of Appeals analysis as running counter to this propositionrdquo

2) Justice Souter then moved onto the second sect 107 factor the nature of the copyrighted work finding it has little merit in resolving this and other parody cases since the artistic value of parodies is often found in their ability to invariably copy popular works of the past

3) The Court did find the third factor integral to the analysis finding that the Court of Appeals erred in holding that as a matter of law 2 Live Crew copied excessively from the Orbison original Souter reasoned that the amount and substantiality of the portion used by 2 Live Crew was reasonable in relation to the bands purpose in creating a parody of Oh Pretty Woman The majority reasoned even if 2 Live Crews copying of the originals first line of lyrics and characteristic opening bass riff may be said to go to the originals heart that heart is what most readily conjures up the song for parody and it is the heart at which parody takes aim The Supreme Court then looked to the new work as a whole finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics producing otherwise distinctive music

4) Looking at the final factor the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm (such as there had been in Sony) Parodies in general the Court said will rarely substitute for the original work since the two works serve different market functions While Acuff-Rose found evidence of a potential derivative rap market in the very fact that 2 Live Crew recorded a rap parody of Oh Pretty Woman and another rap group sought a license to

54

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 59: Intellectual Property - Notes, Outline

record a rap derivative the Court found no evidence that a potential rap market was harmed in any way by 2 Live Crews parodic rap version In fact the Court found that it was unlikely that any artist would find parody a lucrative derivative market noting that artists ask for criticism but only want praise

Blanch v KoonsIssue ldquo[t]he question is whether Koons had a genuine creative rationale for

borrowing Blanchrsquos image rather than using it merely to get attention or to avoid the drudgery in working up something freshrdquo

Facts Jeff Koons an ldquoappropriation artistldquo created a collage entitled ldquoNiagarardquo which depicts four pairs of womenrsquos legs with the feet pointing downwards superimposed over images of ldquoconfections hellip with a grassy field and Niagara Falls in the backgroundrdquo In his collage one of the sets of legs in the painting was originally part of a photograph taken by a professional fashion and portrait photographer and published in Allure magazine in 2000 Koons described his work as using popular images for commentary on the ldquosocial and aesthetic consequences of mass mediardquo The work was commissioned by Deutsche Bank and the Guggenheim Museum

Reasoning Courts will not ldquofind a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original workrdquo However in this case ldquoNiagarardquo passes the transformative test ldquoalmost perfectlyrdquo because Koons changed the original copyrighted picturersquos ldquocolors the background against which it is portrayed the medium the size of the objects pictured their detailsrdquo Also and ldquocruciallyrdquo Koonsrsquos painting had an ldquoentirely different purpose and meaning ndash as part of a massive painting commissioned for exhibition in a German art-gallery spacerdquo

Dicta parody v satire ldquoparody needs to mimic an original to make its point and so has some claim to use the creation of its victimrsquos hellip imagination whereas satire can stand on its own two feet and so requires justification for the very act of borrowingrdquo

First Sale17 USC sect 109ldquohellipthe owner of a particular copy or phonorecord lawfully made under this title or any person authorized by such owner is entitled without the authority of the copyright owner to sell or otherwise dispose of the possession of that copy or phonorecordrdquo

Limits regarding Sound Recordings

55

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 60: Intellectual Property - Notes, Outline

Limits regarding Computer SoftwareImportation

Compulsory License for Nondramatic Musical Works

Limitations on Computer Programs

Other Limits on Exclusive Rights

Defenses Other1 Independent Creation and Expression at the same time 2 License andor Consent3 Inequitable Conduct fraud in the course of registration4 First Amendment used to say that there never was infringement but doesnrsquot protect

infringing expression Might be effective toward fair use5 Immoral Illegal Obscene not really that big of a deal because lsquowho caresrsquo

E Contributory Infringement and Vicarious Liability

Sony v Universal City Studios Inc ldquoThe question is thus whether the Betamax is capable of commercially significant noninfringing uses In order to resolve that question we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement Rather we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing Moreover in order to resolve this case we need not give precise content to the question of how much use is commercially significant For one potential use of the Betamax plainly satisfies this standard however it is understood private noncommercial time-shifting in the home It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs and (B) because the District Courts factual findings reveal that even the unauthorized home time-shifting of respondents programs is legitimate fair userdquo

Authorized Time-Shifting

Unauthorized Time-Shifting

Grokster v MGMldquoFor the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule the inducement rule too is a sensible one for copyright We adopt it here holding that one who distributes a device with the object of promoting its use to infringe copyright as shown by clear expression or other affirmative steps taken to foster infringement is liable for the resulting acts of infringement by third parties We are of course mindful of the need to keep from trenching on regular commerce or discouraging

56

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 61: Intellectual Property - Notes, Outline

the development of technologies with lawful and unlawful potential Accordingly just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe 464 U S at 439 n 19 mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability Nor would ordinary acts incident to product distribution such as offering customers technical support or product updates support liability in themselves The inducement rule instead premises liability on purposeful culpable expression and conduct and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promiserdquo

Three features of this evidence of intent are particularly notable First each company showed itself to be aiming to satisfy a known source of demand for copyright infringement the market comprising former Napster users StreamCasts internal documents made constant reference to Napster it initially distributed its Morpheus software through an OpenNap program compatible with Napster it advertised its OpenNap program to Napster users and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files including copyrighted movies and software programs Groksters name is apparently derived from Napster it too initially offered an OpenNap program its softwares function is likewise comparable to Napsters and it attempted to divert queries for Napster onto its own Web site Grokster and StreamCasts efforts to supply services to former Napster users deprived of a mechanism to copy and distribute what were overwhelmingly infringing files indicate a principal if not exclusive intent on the part of each to bring about infringement

Second this evidence of unlawful objective is given added significance by MGMs showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software While the Ninth Circuit treated the defendants failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users activity we think this evidence underscores Groksters and StreamCasts intentional facilitation of their users infringement[12]

Third there is a further complement to the direct evidence of unlawful objective It is useful to recall that StreamCast 940940 and Grokster make money by selling advertising space by directing ads to the screens of computers employing their software As the record shows the more the software is used the more ads are sent out and the greater the advertising revenue becomes Since the extent of the softwares use determines the gain to the distributors the commercial sense of their enterprise turns on high-volume use which the record shows is infringing[13] This evidence alone would not justify an inference of unlawful intent but viewed in the context of the entire record its import is clear

The unlawful objective is unmistakablerdquo

57

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability
Page 62: Intellectual Property - Notes, Outline

F Remedies

Chapter 5Copyright Infringement and Remedies

501 Infringement of copyright 502 Remedies for infringement Injunctions 503 Remedies for infringement Impounding and disposition of infringing articles 504 Remedies for infringement Damages and profits 505 Remedies for infringement Costs and attorneys fees 506 Criminal offenses 507 Limitations on actions 508 Notification of filing and determination of actions 509 Repealed 1 510 Remedies for alteration of programming by cable systems 511 Liability of States instrumentalities of States and State officials for infringement of

copyright 512 Limitations on liability relating to material online 513 Determination of reasonable license fees for individual proprietors 2

Property Likea Injunctive reliefb Infringing goods seized and impounded

Liabilityc Compulsory licensingd (lack of moral rights)e $$$$$$$$$

i MIN $200 for an innocent infringerii MIN $750 for non-innocent infringer

iii MAX $30000 for non-innocent infringeriv MAX $150000 for willful infringer

58

  • I Introduction
    • A Philosophical Basis for Intellectual Property
    • B Overview of US and international Intellectual Property Legal Systems
      • II Trade Secrets
        • A Defining Trade Secrets
          • Uniform Trade Secret Act - sect 1(4) (RCW 19108 in Washington)
          • Torts sect 757 comment b (Restatement of the Law)
          • Unfair Competition sect 39 (Restatement of the Law (Third))
          • 18 USC sect 1831 ECONOMIC ESPIONAGE (on behalf of a foreign entity)
            • B Reasonable Measures
            • C Disclosure of Trade Secrets Non-Disclosure Agreements
              • How Trade Secrets get out there
              • Residuals Clause
                • D Trade Secrets and Employees (Modern Mobility)
                  • NDA and some issues
                  • Covenants Not to Compete and some issues Reasonableness
                  • Assignment of Inventions Clauses
                  • Non-Solicitation Agreement
                  • Inevitable Disclosure ndash looking at the UTSA Section 2(a)
                    • E Proper and Improper Means of Discovery
                      • Misappropriation means UTSA sect 1(2)
                      • Liability for Disclosure or Use of Anothers Trade
                      • Improper
                      • Breach of Confidentiality
                      • Proper means include AKA Defenses to Misappropriation
                        • F Remedies
                          • Injunctive Relief
                          • Damages - USTA
                          • Punitive Damages and Attorneysrsquo Fees
                              • III Patents
                                • A Patentable Subject Matter
                                • B Novelty and Statutory Bars
                                  • Conception
                                  • Reduces to Practice (RTP) =
                                  • Diligence
                                  • AIA
                                    • C Utility
                                    • D Non-obviousness
                                      • 1 Prior Art scope and content (different from Novelty a bit)
                                      • 2 Differences between the Prior Art and the Claims at Issue
                                      • 3 PHOS in the pertinent Art
                                      • Obvious or Not
                                        • E Disclosure proof of possession
                                          • 35 USC 112 paragraph 1
                                          • Written Description
                                          • Enablement
                                          • Best Mode
                                            • F Patent Rights and Claim Interpretation
                                              • 35 USC 271 Infringement of patent
                                              • Claim Writing
                                              • Claim Interpretation
                                              • Cannons of Claim Interpretation
                                                • G Non-Utility Patents
                                                  • Section 112 paragraph 6
                                                    • H Infringement Doctrine of Equivalents
                                                      • Literal Infringement
                                                      • Doctrine of Equivalents
                                                      • Prosecution History Estoppel
                                                      • Reverse Doctrine of Equivalents
                                                      • Indirect Infringement
                                                        • I Defenses
                                                          • Invalidity
                                                          • Experimental Use
                                                          • Inequitable Conduct
                                                          • Exhaustion of Patent Rights
                                                          • Patent Misuse
                                                            • J Remedies
                                                              • Injunctive Relief
                                                              • Damages
                                                              • Willful Infringement
                                                                  • IV Trademarks
                                                                    • A Protectable Subject Matter
                                                                      • Cases
                                                                        • Qualitex v Jacobson (1995) ndash Color
                                                                        • Zatarains Inc v Oak Grove Smokehouse Inc (5th Cir 1983) ndash Descriptive Fish-Fri
                                                                        • Wal-Mart Stores Inc v Samara Brothers Inc 529 US 205 - Supreme Court 2000
                                                                          • Source Identifying Function
                                                                          • Trade Dress
                                                                            • Taco Cabana v Two Pesos Inc (1991) ndash inherently distinctive REaLLyTOTALITY
                                                                              • Distinctiveness Categories of Marks
                                                                                • GENERIC TERM
                                                                                • DESCRIPTIVE TERM
                                                                                • SUGGESTIVE TERM
                                                                                • ARBITRARY OR FANCIFUL TERMS
                                                                                  • Unprotectable Symbols
                                                                                    • B Establishing Trademark Rights
                                                                                      • Use
                                                                                      • Registration
                                                                                        • C Ownership
                                                                                          • Priority
                                                                                            • Zazu Designs v LOreal SA(7th Cir 1992)
                                                                                              • Assignment
                                                                                              • Loss of Right
                                                                                                • D Standard Infringement
                                                                                                  • 1 Ownership of a Valid Mark
                                                                                                  • 2 In Commerce
                                                                                                  • 3 The Alleged Infringer Use
                                                                                                  • 4 The Mark or a Similar Symbol
                                                                                                  • 5 In Connection with selling or marketing of Goods or Services AND
                                                                                                  • 6 Likelihood of Confusion Mistake or Deception (gets an injunction)
                                                                                                    • A Necessary Showing of Confusion
                                                                                                    • B Factors for Determining Likelihood Confusion
                                                                                                        • E ldquoFalse Designation of Origin and False Descriptions Forbiddenrdquo sect43(a) ndash and other forms of infringementhellip
                                                                                                          • False Advertising
                                                                                                          • Cybersquatting
                                                                                                            • F Dilution
                                                                                                              • THE CLAIM
                                                                                                              • Definition of Elements
                                                                                                              • Exclusions Defenses
                                                                                                                • G Defenses
                                                                                                                  • Parody
                                                                                                                    • Louis Vuitton Malletier SA v Haute Diggity Dog ndash Chewy Vuitton Parody and DILUTION
                                                                                                                      • Genericide
                                                                                                                        • Murphy Bed v Interior Sleep Systems - GENERICIDE
                                                                                                                          • Functionality
                                                                                                                            • TrafFix v Marketing Displays ndash Necessary Element Patent Trademark
                                                                                                                              • Naked Licensing
                                                                                                                                • Don Donuts v
                                                                                                                                  • Fair Use
                                                                                                                                    • Mattel v MCA Records ndash ldquoCome on Barbie Letrsquos Go Partyrdquo
                                                                                                                                    • KP Permanent Make-Up Inc v Lasting ndash Fair Use does not require Confusion analysis
                                                                                                                                        • H Remedies
                                                                                                                                          • Lindy Pen Co v Bic ndash Fair Use does not require Confusion analysis
                                                                                                                                          • Big O Trie Dealers Inc v Goodyear ndash analysis
                                                                                                                                              • V Copyright
                                                                                                                                                • A Copyrightable Subject Matter
                                                                                                                                                  • 17 USC sect 102 (a) - PROTECTABLE
                                                                                                                                                    • Feist Publications v Rural Telephone Service Co Inc (1991) The ORIGINAL Phone Book
                                                                                                                                                      • 17 USC sect 102 (b) ndash NOT PROTECTABLE
                                                                                                                                                        • Baker v Selden (1879)- Bigger Better Bookkeeping IDEA-EXPRESSION DICHOTOMY
                                                                                                                                                        • Lotus Dev Corp v Borland Intrsquol Inc (US 1996)- Software METHOD OF OPERATION
                                                                                                                                                        • Morrissey v Procter amp Gamble (1st Cir 1967) ndash LIMITED NUMBER OF EXPRESSIONS
                                                                                                                                                        • Brandir International Inc v Cascade Pacific Lumber Co(2d Cir 1987) ndash BIKE RACK
                                                                                                                                                          • 17 USC sect 103 (a) ndash Infringing Works Not Protectable
                                                                                                                                                          • 17 USC sect 105 ndash Government Works NOT protectable
                                                                                                                                                            • B Copyright Ownership
                                                                                                                                                              • Term of Copyright
                                                                                                                                                              • Who is the original Author
                                                                                                                                                                • Community for Creative Non-Violence v Reid
                                                                                                                                                                • Aalmuhammed v Lee
                                                                                                                                                                  • Transfers
                                                                                                                                                                  • Termination Right
                                                                                                                                                                    • C Exclusive Rights
                                                                                                                                                                      • Arnstein v Porter ndash Is there infringement Access Substantial Similarity TO the JURY
                                                                                                                                                                      • Nichols v Universal Pictures Corporation
                                                                                                                                                                      • Reproduction Rights
                                                                                                                                                                        • Sony and Grokster
                                                                                                                                                                          • Adaption Right
                                                                                                                                                                            • Anderson v Stallone ndash
                                                                                                                                                                              • Distribution Right
                                                                                                                                                                              • Performance Right
                                                                                                                                                                              • Display Right
                                                                                                                                                                                • D Fair Use Other Limitations on Exclusive Rights
                                                                                                                                                                                  • Fair Use
                                                                                                                                                                                    • Harper amp Row Publishers v Nation Enterprises 471 US 539 (1985)
                                                                                                                                                                                    • Campbell v Acuff-Rose Music 510 US 569 (1994) ndash Satire Bad Parody GoodhellipReally
                                                                                                                                                                                    • Blanch v Koons
                                                                                                                                                                                      • First Sale
                                                                                                                                                                                      • Compulsory License for Nondramatic Musical Works
                                                                                                                                                                                      • Limitations on Computer Programs
                                                                                                                                                                                      • Other Limits on Exclusive Rights
                                                                                                                                                                                      • Defenses Other
                                                                                                                                                                                        • E Contributory Infringement and Vicarious Liability
                                                                                                                                                                                          • Sony v Universal City Studios Inc
                                                                                                                                                                                          • Grokster v MGM
                                                                                                                                                                                            • F Remedies
                                                                                                                                                                                              • Copyright Infringement and Remedies
                                                                                                                                                                                              • Property Like
                                                                                                                                                                                              • Liability