Intellectual Property Survey

1. A trade secret may consist of any formula, pattern, device, or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it….

2. FACTORS:

a. Extent to which info is known outside claimant’s business

b. Extent to which info is known by employees or others involved in the business

c. Extent of measures to guard secrecy of info

d. Value of info to the business and its competitors

e. Amount of effort or money expended in developing info

f. Ease or difficulty with which info could be properly acquired or duplicated by others

b. Restatement (Third) of Unfair Competition (1994)

1. 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.

2. Sufficiently valuable

3. Sufficiently secret

ii. State statutes

a. Many modeled on Uniform Trade Secrets Act (1979) – the “UTSA”

1. (4) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that

a. (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and

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

b. E.g., Cal. Civil Code § 3426 et al.

1. Cal. Civil Code § 3426.1(d)(1): adopts UTSA except for clause “not being readily ascertainable” (CB 46 n.11)

b. Uniform Trade Secrets Act

i. Information qualifies for protection

a. Economic value

b. Not generally known

c. Not readily ascertainable by proper means

ii. Reasonable efforts to maintain secrecy

c. Trade secret claim can be broken down into three essential elements:

i. Subject matter involved must qualify for trade secret protection;

ii. The holder of the trade secret took reasonable precautions under the circumstances to prevent its disclosure;

iii. Must prove that the defendant acquired the information wrongfully.

3. Theory of Trade Secrets

a. Utilitarian

i. Protecting against the theft of proprietary information encourages investment in such information.

b. Deterrence of wrongful acts (tort theory)

B. Subject Matter

1. Defining Trade Secrets

a. Metallurgical Industries Inc. v. Fourtek, Inc.

i. FACTS: Metallurgical Industries hired a company to build a carbide reclamation furnace. The furnace did not work as well as anticipated so Metallurgical modified it to increase its performance. After the company went out of business, several ex-employees reformed under Fourtek and sold a modified version of Metallurgical’s furnace to another company. Metallurgical sued Fourtek for trade secret misappropriation.

ii. ISSUE:

iii. RULE:

iv. HOLDING:

2. Reasonable Efforts to Maintain Secrecy

a. Rockwell Graphics Systems, Inc. v. DEV Industries, Inc.

i. FACTS: When two former employee started working for a competitor and using secret drawings, Rockwell sued for misappropriation of trade secrets.

ii. ISSUE:

iii. RULE: Holders of trade secrets must take reasonable precautions to keep secrets confidential.

iv. HOLDING:

b. How can firms protect their trade secrets?

i. Confidentiality agreements

ii. Confidential relationships

iii. Physical security measures

iv. Design products to protect against reverse engineering

v. “Confidential” stamp on documents

vi. No public disclosure

3. Disclosure of Trade Secrets

a. As long as a trade secret remains a secret, it is protectable.

b. Trade secrets last for an indefinite period of time.

c. Disclosure of a once-protected trade secret:

i. A trade secret owner may publish a secret (in an academic journal or some other forum)

ii. A trade secret owner may disclose the secret by selling a commercial product that embodies the secret.

iii. Trade secrets may be publicly disclosed by someone other than the trade secret owner.

iv. Trade secrets may be disclosed inadvertently.

v. Government agencies sometimes require the disclosure of trade secrets by private parties in order to serve some other social purpose.

C. Misappropriation of Trade Secrets

1. Restatement of Torts §757 Misappropriation

a. “One who discloses or uses another’s trade secret without a privilege to do so, is liable to the other if

i. (a) he discovered the secret by improper means, or

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

iii. (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 person’s disclosure of it was a breach of his duty to the other . . .”

2. Restatement (Third) of Unfair Competition § 40 says acquisition or use of a trade secret is misappropriation if:

a. Acquisition by improper means

b. Breach of confidence

3. Uniform Trade Secrets Act §1 Misappropriation

a. “(2) ‘Misappropriation’ means

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 the disclosure or use, knew or had reason to know that his knowledge of the trade secret was

1. derived from or through a person who had utilized improper means to acquire it;

2. acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or

3. 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 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. Improper Means

a. Restatement of Torts §757, Comment f: Improper means of discovery – comment (see bottom of CB 64)

b. Restatement (Third) of Unfair Competition §43: Includes “theft, fraud, unauthorized interception of communications, inducement of or knowing participation in a breach of confidence, and other means either wrongful in themselves or wrongful under the circumstances of the case.”

c. UTSA §1: “Improper means includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means”

d. E.I. DuPont de Nemours & Co. v. Rolfe Christopher et al.

i. FACTS:

ii. ISSUE:

iii. RULE: To obtain knowledge of a process without spending the time and money to discover it independently is improper unless the holder voluntarily discloses it or fails to take reasonable precautions to ensure its secrecy.

iv. HOLDING:

5. Confidential Relationship

a. Restatement (Third) of Unfair Competition § 41 (CB 63)

i. A confidential relationship is established if:

a. (a) the person made an express promise of confidentiality prior to the disclosure of the trade secret; or

b. (b) the trade secret was disclosed to the person under circumstances in which the relationship between the parties to the disclosure or other facts surrounding the disclosure justify the conclusions that, at the time of the disclosure.

1. (1) the person knew or had reason to know that the disclosure was intended to be in confidence, and

2. (2) the other party to the disclosure was reasonable in inferring that the person consented to an obligation of confidentiality.

b. Secrets that have been properly obtained may still be misappropriated if they are improperly used or disclosed.

i. Mostly occurs when the secrets are used or disclosed in violation of a confidential relationship.

ii. Confidential relationships may also arise without any express agreement.

c. Smith v. Dravo Corp.

i. FACTS: Smith designed certain contains for use in shipping. Dravo obtained these plans during negotiations to use and purchase Smith’s business.

ii. ISSUE:

iii. RULE: A confidential relationship may be implied without any express promise of trust.

iv. HOLDING:

D. PRIVILEGES AND DEFENSES:

1. Proper means of discovery

a. Reverse engineering

b. Independent discovery

c. Observed product in public

d. Obtained info in public

2. Reverse Engineering

a. Kadant, Inc. v. Seeley Machine, Inc.

i. Trade secret protection is not appropriate where a plaintiff does not demonstrate that the defendant improperly obtained and reverse engineered its products.

3. The Special Case of Departing Employees

a. Employee Trade Secrets

i. Wexler v. Greenberg

a. An employee does not improperly appropriate trade secrets from a former employer if the employee developed the information in question.

ii. Note on the Common Law Obligation to Assign Inventions

a. Three categories

1. Employees hired to invent, which results in employer ownership of the invention;

2. Employees who invent on the employer’s time or using its resources, which results in a limited, nonexclusive “shop right” on the part of the employer to practice the invention;

3. An employee’s “independent invention,” in which case the employee owns the invention.

iii. Note on Trailer Causes

a. Generally, trailer causes are only enforceable to the extent that they are “reasonable.”

b. Noncompetition Agreements

i. Sometimes you can’t prove trade secret misappropriation or copyright infringement, but you have a noncompetition agreement which you can enforce. This depends on jurisdiction (see cb page 91-92).

ii. These agreements will be upheld as long as they are reasonable.

c. Note on the “Inevitable Disclosure” of Trade Secrets

d. Note on Nonsolicitation Agreements

E. Agreements to Keep Secrets

1. Warner-Lambert Pharmaceutical Co. v. John J. Reynolds, Inc.

a. Claimed formula for Listerine was no longer a trade secret.

b. Parties are free to contract with respect to a secret formula or trade secret in any manner.

F. Remedies

1. Generally, injunctions are available as a remedy in trade secret cases.

2. Damages for preinjunction activities may also be collected.

3. Winston Research Corp. v. 3M Corp.

a. See case book.

4. Note on Criminal Trade Secret Statutes

5. Note on Federal Criminal Liability for Trade Secret Misappropriation

a. State Criminal Trade Secret Statutes

b. E.g., Cal. Penal Code § 499c

c. Federal Law: Economic Espionage Act of 1996, 18 U.S.C. §1831 et seq.

II. PATENT LAW

A. Introduction

1. Historical Background

2. An Overview of the Patent Laws

a. Patentable Subject Matter (§ 101)

b. Novelty (§ 102)

c. Utility (§ 101)

d. Nonobviousness (§ 103)

e. Disclosure and Enablement (§ 112)

3. Five requirements

i. An invention fits one of the five general categories of patentable subject matter;

ii. It has not been preceded in identical form in the public prior art;

iii. It is useful;

iv. It represents a nontrivial extension of what was known;

v. It is disclosed and described by the applicant in such a way as to enable others to make and use the invention;

b. Rights Conferred by a Patent

4. Theories of Patent Law

a. Patents are public goods that are costly to make and that are difficult to control once they are released into the world.

b. As a result, absent patent protection inventors will not have sufficient incentive to invest in creating, developing, and marketing new products.

c. Utilitarian or Economic-Incentive

d. Natural rights and reward-based theories

B. The Elements of Patentability

1. Patentable Subject Matter

a. 35 U.S.C. §101;

i. Whoever 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 title.

ii. Process claims

iii. Product claims (machine, manufacture, or composition of matter)

b. Diamond v. Chakrabarty

i. “Anything under the sun that is” human-made

ii. A live, man-made microorganism is a non naturally occurring composition and thus may be patented.

c. Parke-Davis & Co. v. H.K. Mulford Co.

i. Adrenalin case.

ii. When the first person extracts a product and makes it available for any use, the product becomes a new thing commercially and therapeutically and is therefore patentable.

d. Note on Patenting “Abstract Ideas”

e. Note on Patenting Business Methods and “Printed Matter”

i. Can’t patent printed matter (such as a business form)

ii. State Street Bank & Trust Co. v. Signature Financial Group

a. Business Method Patents are OKAY.

iii. the transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calculation, because it produces 'a useful, concrete and tangible result' -- a final share price momentarily fixed for recording and reporting purposes and even accepted and relied upon by regulatory authorities and in subsequent trades.

2. Utility

a. Brenner v. Manson

i. .A process whose only demonstratable utility is to aid in research is not patentable.

b. In re Fisher

i. A patent application that discloses general, generic uses of a claimed invention, the claimed inventions of which are mere research intermediates, lacks utility and enablement.

3. Describing and Enabling the Invention

a. Process for Obtaining a Patent

b. Disclosure Doctrines: Enablement and Written Description

i. Enablement

a. 35 USC §112

1. Three distinct elements:

a. Written description requirement

i. “The specification shall contain a written description of the invention,

b. Best mode requirement

i. 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...to make and use the same,

c. Enablement requirement

i. and shall set forth the best mode contemplated by the inventor of carrying out his invention.”

b. The Incandescent Lamp Patent

1. A patent must state with specificity the composition of the materials to be mixed together to produce the result intended to be obtained and if they are not capable of such exact description, then the inventor is not entitled to a patent.

ii. The Written Description Requirement

a. §112

1. The 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…to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.

b. The Gentry Gallery, Inc. v. The Berkline Corp.

1. Must claim what you disclose!

2. Patent claims may be no broader than the supporting disclosure and, thus, a narrow disclosure will limit claim breadth.

4. Novelty and Statutory Bars

a. Novelty 35 USC §102 (a)

i. A person shall be entitled to a patent unless—

a. (a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or

b. Statutory Bars 35 USC §102(b)

i. A person shall be entitled to a patent unless—

a. The invention was patented or described in a printed publication pin this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or…

c. The Nature of Novelty

i. Rosaire v. National Lead Co.

a. An invention is not patentable if it was known or used by others in this country before the patentee’s invention.

b. Work of first inventor done openly and in the ordinary course of business.

ii. Before the invention by applicant the invention was

a. Patented anywhere

b. Described in a printed publication anywhere

c. Known in the US

d. Used in the US

iii. By others

d. Statutory Bars: Publications

i. An inventor can create a statutory bar by his or her own actions.

ii. An inventor cannot destroy the novelty of her own inventions.

iii. An inventor’s work cannot be cited against her under 102(a), but it can be cited against her under 102(b).

iv. Is there a § 102(b) statutory bar to patentability for this invention?

a. More than one year before U.S. patent application filed

1. The invention was

a. Patented anywhere

b. Described in a printed publication anywhere

c. Public use in the US

d. On sale in the US

2. By applicant or others

v. In re Hall

a. Published Thesis provided a publication under 35 USC 102 (b).

b. An application for a patent was rejected by the PTO because a dissertation on the same topic had already been published overseas.

e. Statutory Bars: Public Use

i. Egbert v. Lippmann

a. If an inventor, having made his device, gives or sells it to another, to be used by the donee or vendee, without limitation or restriction, or injunction of secrecy, and it is so used, such use is public, even though the use and knowledge of the use may be confined to one person.

f. The Experimental Use Exception

i. City of Elizabeth v. Pavement Company

a. The experimental use of an invention by the inventor himself, or by any person under his direction has never been regarded as public use.

g. Priority Rules and the First to Invent

i. 35 USC § 102 Novelty and Loss of Right

a. § 102(g)

1. Subsection (1) covers interference proceedings—formal priority contests between rival claimants to the same patentable subject matter.

2. Subsection (2) covers the use of prior inventions as a source of prior art.

a. (g)(2): only evidence of prior inventions made in the U.S. may be introduced outside the interference context.

3. Priority generally goes to the first inventor to (1) reduce an invention to practice, without (2) abandoning the invention.

b. § 102(g)(1): Person is not first to invent if “during the course of an interference…, another inventor involved therein establishes, to the extent permitted in section 104…that before such person’s invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed”

1. Interference proceedings only

2. Section 104: inventive activity in WTO member country, etc.

c. § 102(g)(2): Person is not first to invent if “before such person’s invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it.”

1. “made in this country”: conception & reduction to practice in US

d. Griffith v. Kanamaru

1. When evaluating excuses for inactivity in reduction to practice, courts may consider the reasonable everyday problems and limitations encountered by an inventor.

ii. DETERMINING PRIORITY (§102(g)(2))

a. 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.”

1. “In determining priority of invention under this subsection,

a. there shall be considered not only the respective dates of conception and reduction to practice of the invention,

2. but also the reasonable diligence of one who was first to conceive and last to reduce to practice,

3. from a time prior to conception by the other.”

b. If Alan is first to conceive (“C”) and first to reduce to practice (“RTP”), and Betty invents later in time:

c. Alan-C Alan-RTP Betty-C Betty-RTP

d. Alan has priority of invention over inventor Betty

e. If Alan is first to conceive, but last to reduce to practice:

f. Alan-C Betty-C Betty-RTP Alan-RTP

g. Alan has priority of invention over Betty under §102(g)(2) only with proof of “reasonable diligence” measured from just prior to the second conceiver’s conception date (Betty-C) to the first conceiver’s reduction to practice date (Alan-RTP)

5. Nonobviousness

a. 35 USC § 103

i. A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made.

ii. BREAKDOWN

a. if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious

b. at the time the invention was made

c. to a person having ordinary skill in the art to which said subject matter pertains . . . .”

b. Graham v. John Deere Co.

i. FACTS:

ii. ISSUE:

iii. RULE: A device which is an obvious extension of the state of the art for that type of device is not patentable. See Graham factors!!!

iv. HOLDING:

v. Graham: Factual inquiries for determining nonobviousness :

a. What is the scope and content of the prior art?

b. What are the differences between the prior art and the claimed invention?

c. What is the level of ordinary skill in the relevant art?

d. Any relevant secondary considerations?

c. Combining References

i. § 102 a single reference must anticipate all the elements of the claimed embodiment, this is NOT the case with §103.

ii. KSR International Co. v. Teleflex Inc.

a. In determining whether the subject matter of a patent claim is obvious, neither the particular motivation nor the avowed purpose of the patentee controls. What matters is the objective reach of the claim. If the claim extends to what is obvious, it is invalid under §103. One of the ways in which a patent's subject matter can be proved obvious is by noting that there existed at the time of invention a known problem for which there was an obvious solution encompassed by the patent's claims

b. The proper question to have asked was whether a pedal designer of ordinary skill, facing the wide range of needs created by developments in the field of endeavor, would have seen a benefit to upgrading [a prior art patent] with a sensor

c. The Federal Circuit erred in rigidly applying the narrow teaching/suggestion/motivation standard for obviousness under 35 U.S.C. §103, for precluding application of "obvious to try" considerations, and for too rigidly constricting the use of hindsight, in conflict with the broader obviousness evaluation established in Graham. Federal Circuit reversed and remanded.

iii. In Re Vaeck

a. Combining References -

1. Does the prior art:

a. Suggest this invention to a person of ordinary skill in the art (“POSITA”)? and

b. Reveal the POSITA would have a reasonable expectation of success?

iv. In Re Dembiczak

a. Pumpkin bag case

b. The obviousness standard must demonstrate actual evidence, which must be clear and particular, in order to be applied.

d. “Secondary” Considerations

C. Infringement

1. Claim Interpretation

a. The Proper Role of Judge and Jury in Patent Cases

i. Markman hearing.

ii. Phillips v. AWH Corporation

a. Intrinsic Evidence

1. Claim Language

2. Specification

3. Prosecution History

b. Extrinsic Evidence

1. Expert and inventor testimony

2. Dictionaries

3. Treatises

4. Encyclopedias

2. Literal Infringement

a. 35 U.S.C. § 271 gives the patentee an infringement cause of action against anyone who makes, uses, sells, offers for sale, or imports the invention described in the claims of the patent.

b. Runs from the day the patent is issued until the end of the patent term.

c. For an accused product to literally infringe a patent, EVERY element contained in the patent claim must also be present in the accused product or device.

d. 35 U.S.C. § 271

i. “(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.”

a. Except as otherwise provided in this title, whoever without authority:

1. makes, uses, offers to sell, or sells any patented invention, within the United States or

2. imports into the United States any patented invention

3. during the term of the patent therefor,

b. infringes the patent.

e. Larami Corp. v. Amron

i. Literal infringement of a patent cannot be proved if the accused product is missing even a single element of the claim.

3. The Doctrine of Equivalents

a. Basic Issues

i. Literal interpretation can result in injustice. If competitors could circumvent patents through insubstantial changes in the design of a product, then many patents would lose their value, and patent drafters would expend unreasonable efforts trying to include every possible variation.

ii. Graver Tank & Mfg. Co. v. Linde Air Prods.

a. A patentee may invoke the doctrine of equivalents if it performs “substantially the same function in substantially the same way to obtain the same result.”

b. Triple identity test.

iii. Warner-Jenkinson

a. Only change was pH

b. The adoption of the element by element approach to equivalence

c. The preservation of the rule that equivalence is measured as of the time of infringement, and not at the time of invention

d. “Does the accused product or process contain elements identical or equivalent to each claimed element of the patented invention?”

e. Does it apply in cases involving after-arising technology?

b. Prosecution History Estoppel

i. Festo Corp. v. Shoetsu Kinzoku Kogyo Kabushiki Co., Ltd.

a. A patentee is barred from seeking DOE protection for any matter it should have known it was giving up by amending its claims.

b. If a reasonable patentee could not have foreseen the limiting effect of an amendment, the DOE remains available:

c. 3 different scenarios under which the absolute bar is inappropriate:

1. unforeseeable equivalents, which would seem to be at least primarily cases of “after-arising” technologies

2. amendments made for reasons “tangential” to the equivalent in question

3. a residual category where “for some other reason” the patentee could not be expected to have described the equivalent.

d. Patentee bears the burden of overcoming the presumption that amendments relate to patentability and bar all equivalents.

ii. Threshold Issues

a. Claim amendments must surrender claim scope to trigger operation of the doctrine

b. Arguments to examiners are treated differently than actual amendments

c. Subject Matter “Disclosed but Not Claimed”

i. Johnson & Johnson Associates Inc. v. R.E. Service Co., Inc.

a. No access to information disclosed but not claimed.

d. After-Arising Technologies

4. The “Reverse” Doctrine of Equivalents

a. You would look at the claim elements and probably conclude that they did not function in the same way to accomplish the same results as the dress patterns that were described by the patent. So even though the claims might be literally infringed, there would not be actual infringement under the reverse doctrine of equivalents.

5. Equivalents for Means-Plus-Function Claims

a. Means-Plus-Function Claims 35 U.S.C. § 112 ¶ 6

i. “An 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.”

a. Which claims are means-plus-function claims?

b. Can a means-plus-function claim be infringed under the doctrine of equivalents?

6. Contributory Infringement

a. C.R. Bard, Inc. v. Advanced Cardiovascular Systems, Inc.

i. A person induces infringement under 35 U.S.C. §271 by actively and knowingly aiding and abetting another’s direct infringement.

ii. Can’t be suitable for non-infringing use.

b. 35 U.S.C. § 271(c): Contributory infringement if:

i. Contributory Act: “Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process”

ii. Material component: “constituting a material part of the invention”

iii. Knowledge of infringing behavior: “knowing the same to be especially made or especially adapted for use in an infringement of such patent”

iv. No substantial noninfringing use: “and not a staple article or commodity of commerce suitable for substantial noninfringing use”

v. “shall be liable as a contributory infringer.”

c. Must establish direct infringement by third party

d. Active Inducement to Infringe

i. 35 U.S.C. § 271(b): “Whoever actively induces infringement of a patent shall be liable as an infringer.”

a. Intent - active and knowing inducement

b. Aiding and abetting infringement by another

ii. Must establish direct infringement by third party

7. Infringement Involving Foreign Activities

a. Patent Act § 271(a): “[W]hoever 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. 35 U.S.C. § 271(f)(1):

c. “Whoever without authority

i. supplies or causes to be supplied in or from the United States

ii. all or a substantial portion of the components of a patented invention,

iii. where such components are uncombined in whole or in part,

iv. in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States,

v. shall be liable as an infringer.”

d. Microsoft Corporation v. AT & T Corp.

D. Defenses

1. The “Experimental Use” Defense

a. 35 U.S.C. § 271(e)(1) Safe Harbor

i. “It shall not be an act of infringement to make, use, offer to sell, or sell within the US or import into the US a patented invention (other than a new animal drug or veterinary biological product . . .) solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs”

2. Inequitable Conduct

a. Kingsdown Medical Consultants, Ltd. v. Hollister Inc.

i. Inequitable conduct in a patent application resides in failure to disclose material information, or submission of false material information, with an intent to deceive.

3. Patent Misuse

a. Patent misuse is a judicially created doctrine that bars patentees from enforcing their patent against infringers when they have “misused” the patent.

b. Motion Picture Patents Company v. Universal Film Manufacturing Company et al.

i. The exclusive right granted in every patent must be limited to the invention described in the claims of the patent and it is not competent for the owner to extend the scope of its patent monopoly by restricting the use of it to materials necessary in its operation that are not part of the patented invention.

c. BUT NOTE:

i. 35 U.S.C. § 271(d)

a. “No patent owner otherwise entitled to relief for infringement or contributory infringement of a patent shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of his having done one or more of the following:

b. (1) derived revenue from acts which if performed by another without his consent would constitute contributory infringement of the patent;

c. (2) licensed or authorized another to perform acts which if performed without his consent would constitute contributory infringement of the patent;

d. (3) sought to enforce his patent rights against infringement or contributory infringement;

e. (4) refused to license or use any rights to the patent; or

f. (5) conditioned the license of any rights to the patent or the sale of the patented product on the acquisition of a license to rights in another patent or purchase of a separate product, unless, in view of the circumstances, the patent owner has market power in the relevant market for the patent or patented product on which the license or sale is conditioned.”

d. Other Defenses

i. Invalidity of the patent

a. Not patentable subject matter, absence of utility, lack of novelty (anticipation), obviousness, failure to comply with section 112, etc.

ii. Noninfringement

iii. Patent exhaustion (first-sale doctrine)

iv. 35 U.S.C. § 273: Defense to infringement based on earlier inventor

v. Statute of Limitations, laches, estoppel, etc.

E. REMEDIES

1. Injunction, not damages is the standard remedy in a patent case due to the valuation problem.

2. Injunctions

a. Injunctions

i. 35 U.S.C. § 283: “The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.”

b. PERMANENT INJUNCTION

i. The plaintiff must prove

a. Irreparable injury

b. Remedies available at law, such as monetary damages, are inadequate to compensate for that injury

c. Balance of hardships between the plaintiff and defendant warrants a remedy in equity

d. Public interest would not be disserved by a permanent injunction

e. Note the standards are different for a preliminary injunction: a preliminary injunction requires a showing of likelihood of success on the merits

c. eBay, Inc. v. MercExchange, LLC

i. A plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief:

a. "That test requires a plaintiff to demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. The decision to grant or deny such relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion. (...) Neither the District Court nor the Court of Appeals below fairly applied these principles."

3. Damages: Reasonable Royalty and Lost Profits

a. 35 U.S.C. § 284

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

b. Reasonable Royalty

i. What is a reasonable royalty?

a. Panduit: An amount “which a person, desiring to manufacture and sell a patented article, as a business proposition, would be willing to pay as a royalty and yet be able to make and sell the patented article, in the market, at a reasonable profit…”

ii. What is the “hypothetical royalty negotiation”?

a. Georgia Pacific factors for setting a reasonable royalty

c. Lost Profits Damages

i. Price Erosion

ii. The “Market Share” Rule

iii. Lost Sales of Unpatented Components or Products

iv. Post-Expiration Sales

v. PANDUIT Test:

a. Demand for the patented product

b. Absence of acceptable noninfringing substitutes

c. Patentee’s manufacturing and marketing capability to exploit the demand

d. Amount of profit patentee would have made but for infringement

4. Willful Infringement

a. 35 U.S.C. § 284

i. The court “may increase the damages up to three times the amount found or assessed….”

b. In re Seagate Technology, LLC

i. Scope of waiver of attorney-client privilege and work product protection when accused infringer asserts advice of counsel defense in response to charge of willful infringement?

III. COPYRIGHT LAW

A. Introduction

1. Brief History of Copyright Protection

2. An Overview of the Copyright Regime

3. Philosophical Perspectives on Copyright Protection

a. The predominant philosophical framework undergirding American copyright law is utilitarian…to promote the progress of science and the useful arts.”

B. Requirements

1. Original Works of Authorship

a. 17 U.S.C. § 102. Subject Matter of Copyright: In General

i. Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, no 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…

ii. Works of authorship include the following categories

a. (1) literary works;

b. (2) musical works, including any accompanying words;

c. (3) dramatic works, including any accompanying music;

d. (4) pantomimes and choreographic works;

e. (5) pictorial, graphic, and sculptural works;

f. (6) motion pictures and other audiovisual works;

g. (7) sound recordings; and

h. (8) architectural works.”

b. 3 Requirements under 17 U.S.C. § 102

i. Original

ii. Work of authorship

iii. Fixed in a tangible medium of expression

c. Feist Publications v. Rural Telephone Service

i. Originality has two distinct requirements

a. Work is independently created by the author

1. Original to the author

b. Work possesses a minimal degree of creativity

1. standard of originality is low

2. Fixation in a Tangible Medium of Expression

a. 17 U.S.C. § 101: “A work is ‘fixed’ in a tangible medium of expression

b. when its embodiment in a copy or phonorecord,

c. by or under the authority of the author,

d. is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated

e. for a period of more than transitory duration.

f. A work consisting of sounds, images, or both,

g. that are being transmitted,

h. is ‘fixed’ for purposes of this title if a fixation of the work is being made simultaneously with its transmission.”

i. COPIES:

i. “‘Copies’ are material objects, other than phonorecords,

ii. in which a work is fixed by any method now known or later developed,

iii. and from which the work can be perceived, reproduced, or otherwise communicated,

iv. either directly or with the aid of a machine or device.

v. The term ‘copies’ includes the material object, other than a phonorecord, in which the work is first fixed.”

j. CREATED

i. “A work is “created” when it is fixed in a copy or phonorecord for the first time;

ii. where a work is prepared over a period of time, the portion of it that has been fixed at any particular time constitutes the work as of that time, and

iii. where the work has been prepared in different versions, each version constitutes a separate work.”

k. PHONORECORDS

i. “‘Phonorecords’ are material objects

ii. in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed by any method now known or later developed,

iii. and from which the sounds can be perceived, reproduced, or otherwise communicated,

iv. either directly or with the aid of a machine or device.

v. The term ‘phonorecords’ includes the material object in which the sounds are first fixed.”

3. Formalities

a. Notice

b. Publication

c. Registration

d. Deposit

C. Copyrightable Subject Matter

1. Limitations on Copyrightability: Distinguishing Function and Expression

a. The Idea-Expression Dichotomy

i. 17 U.S.C. § 102. Subject Matter of Copyright: In General

a. (a) Copyright protection subsists, in accordance with this title, in original works of authorship…

b. (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.

ii. Baker v. Seldon

a. Idea/expression dichotomy: Did Baker copy unprotected ideas or protected expression?

b. The protection afforded by a copyright on a book explaining an art or system extends only to the author’s unique explanation thereof and does not preclude others from using the system or the forms necessarily incidental to such use.

iii. Morrissey v. Proctor & Gamble

a. A rule incidental to the operation of a non-copyrightable contest cannot itself be copyrighted if the information it conveys is so simple that there are only a handful of ways in which it can be expressed.

b. Merger doctrine: Where there is only one or but a few ways of expressing an idea, then courts will find that the idea behind the work merges with its expression and the work is not copyrightable.

c. Scenes a Faire: Copyright protection does not extend to the incidents, characters or settings which are as a practical matter indispensable, or at least standard, in the treatment of a given topic. To allow protection for such aspects of a work would unduly restrict subsequent authors in building their own works within general settings with which their audiences will relate.

d. Idea-Expression Dichotomy

e. Historical Facts and Research

b. The Useful Article Doctrine

i. The Useful Article Doctrine Section 101 Definitions

a. Useful article:

1. “an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information. . . .”

b. Pictorial, graphic, and sculptured works:

1. “two-dimensional and three-dimensional works of fine, graphic, and applied art, photographs, prints and art reproductions, maps, globes, charts, diagrams, models, and technical drawings, including architectural plans.

2. Such works shall include works of artistic craftsmanship insofar as their form but not their mechanical or utilitarian aspects are concerned;

3. the design of a useful article, as defined in this section, shall be considered a pictorial, graphic, or sculptural work only if, and only to the extent that,

4. such design incorporates pictorial, graphic, or sculptural features

5. that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.”

ii. Brandir International, Inc. v. Cascade Pacific Lumber Co.

a. Copyrightability ultimately depends on the extent to which the work reflects artistic expression uninhibited by functional characteristics.

c. Government Works

i. Copyright protection is not available for any work of the United States Government, but the Government is not precluded from receiving and holding copyrights transferred to it by assignment, bequest, or otherwise. Section 101.

ii. Judicial opinions, statutes, constitutions

iii. Under the Copyright Act:

a. “Copyright protection … is not available for any work of the United States Government,

b. but the United States Government is not precluded from receiving and holding copyrights transferred to it by assignment, bequest, or otherwise.” 17 U.S.C. § 105

iv. What is a work of the United States Government?

a. “a work prepared by an officer or employee of the United States Government as part of that person’s official duties.” 17 U.S.C. § 101

2. The Domain and Scope of Copyright Protection

a. 17 U.S.C. § 102. Subject Matter of Copyright: In General

i. (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:

a. (1) literary works;

b. (2) musical works, including any accompanying words;

c. (3) dramatic works, including any accompanying music;

d. (4) pantomimes and choreographic works;

e. (5) pictorial, graphic, and sculptural works;

f. (6) motion pictures and other audiovisual works;

g. (7) sound recordings; and

h. (8) architectural works.

b. Literary Works

c. Pictorial, Graphic, and Sculptural Works

d. Architectural Works

e. Musical Works and Sound Recordings

f. Dramatic, Pantomime, and Choreographic Works

g. Motion Pictures and Other Audiovisual Works

h. Derivative Works and Compilations

i. What is a derivative work?

a. “A ‘derivative work’ is a work based upon one or more preexisting works,

b. such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation,

c. or any other form in which a work may be recast, transformed, or adapted.

d. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a ‘derivative work.” 17 U.S.C. § 101

ii. Roth Greeting Cards v. United Card Company

a. The test of infringement is whether the work is recognizable by an ordinary observer as having been taken from the copyrighted source.

i. Compilation

i. What is a compilation?

ii. A compilation is a work “formed by the collection and assembling of preexisting materials or of data

iii. that are selected, coordinated, or arranged

iv. in such a way that the resulting work as a whole constitutes an original work of authorship.” 17 U.S.C. § 101

j. Are Derivative Works and Compilations Protected by Copyright?

i. Yes. Section 103 provides:

ii. “The subject matter of copyright as specified by section 102 includes compilations and derivative works,

iii. but protection for a work employing preexisting material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfully.” 17 U.S.C. § 103(a)

k. What rights does the author have in a compilation or derivative work?

i. extends only to the material contributed by the author of such work,

ii. as distinguished from the preexisting material employed in the work,

iii. and does not imply any exclusive right in the preexisting material.” 17 U.S.C. § 103(b)

D. Ownership and Duration

1. Initial Ownership of Copyrights

a. 17 U.S.C. § 201

i. Initial Ownership: “Copyright in a work . . . vests initially in the author or authors of the work” (§ 201(a))

b. Works Made for Hire

i. Community for Creative Non-Violence et al. v. Reid

a. Under common-law agency principles, one who creates an artwork at the behest of another retains copyright thereon unless he was an employee of that other.

ii. § 201(b)

a. “Works Made For Hire. – In the case of a work made for hire,

b. the employer or other person for whom the work was prepared is considered the author for purposes of this title, and,

c. unless the parties have expressly agreed otherwise, in a written instrument signed by them, owns all of the rights comprised in the copyright.”

d. “A ‘work made for hire’ is –

1. (1) a work prepared by an employee within the scope of his or her employment; or

2. (2) [independent contractor:] a work specially ordered or commissioned for use

3. as a contribution to a collective work,

4. as a part of a motion picture or other audiovisual work,

5. as a translation,

6. as a supplementary work,

7. as a compilation,

8. as an instructional text,

9. as a test, as answer material for a test,

10. or as an atlas,

e. if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire . . . .” 17 U.S.C. § 101

iii. Is Reid an employee of CCNV or independent contractor?

a. Hiring party’s right to control manner and means of production

b. Skill required

c. Source of instrumentalities and tools

d. Location of the work

e. Duration of relationship between parties

f. Hiring party’s right to assign additional projects

g. Hired party’s discretion on when and how long to work

h. Method of payment

i. Hired party’s discretion in hiring and paying assistants

j. Work part of regular business of hiring party

k. Whether hiring party is a business

l. Provision of employee benefits

m. Tax treatment

c. Joint Works

i. Aalmuhammed v. Lee

a. A person claiming to be a co-owner of a joint work must prove that both parties intended the work to be a joint work.

ii. “A ‘joint work’ is a work prepared by

a. two or more authors

b. with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.” 17 U.S.C. § 101

iii. “The authors of a joint work are co-owners of copyright in the work.” 17 U.S.C. § 201(a)

d. Collective Works

i. What is a collective work?

a. “A ‘collective work’ is a work,

b. such as a periodical issue, anthology, or encyclopedia,

c. in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole.” 17 U.S.C. § 101

ii. What are the rights of the author of the collective work and the work’s individual contributors?

iii. “(c) Contributions to Collective Works. – Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution.

iv. In the absence of an express transfer of the copyright or of any rights under it,

v. the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series.”

vi. Rights of Authors and Publishers in Electronic Compilations

2. Duration and Renewal

Date of Act	Initial Term	Renewal Term	Total Possible
1790	14 years	14 years	28 years
1831	28 years	14 years	42 years
1909	28 years	28 years	56years
1976	Individual author: life plus 50 years Anonymous or pseudonymous works, or works made for hire: the lesser of 75 years from publication or 100 years from creation	None	Same as initial term
1998	Individual author: life plus 70 years Anonymous or pseudonymous works, or works made for hire : the lesser of 95 years from publication or 120 years from creation	None	Same as initial term

3. Division, Transfer, and Reclaiming Copyrights

a. Division and Transfer of Copyright Interests Under the 1909 Act

b. Division and Transfer of Copyright Interests Under the 1976 Act

E. Traditional Rights of Copyright Owners

1. 17 U.S.C. § 106. Exclusive Rights in Copyrighted Works

a. Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

i. (1) to reproduce the copyrighted work in copies or phonorecords;

ii. (2) to prepare derivative works based upon the copyrighted work;

iii. (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

iv. (4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

v. (5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

vi. (6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

2. The Right to Make Copies

a. Copying

i. Arnstein v. Porter

a. Two elements to establish infringement

1. Copying; and

2. Improper appropriation

b. In a copyright infringement dispute, if there is evidence of access and similarities exist, then the trier of the facts must determine whether the similarities are sufficient to prove copying.

c. Copying—establishing copying by way of circumstantial evidence

1. sliding scale, no similarities then no evidence proves copying…

2. Copyright infringement?

a. Ownership of a valid copyright in the work

b. Copying of original and protectable elements of the plaintiff’s work

3. Copying

a. Improper Appropriation

b. Improper Appropriation

i. Nichols v. Universal Pictures Corporation

a. Abe’s Irish Rose case.

b. Two plays may correspond closely enough in plot for a finding of infringement.

ii. The Sliding Scale and the Virtual Identity Test

a. More similarity is required when less protectable matter is at issue.

iii. Steinberg v. Columbia Pictures Industries, Inc.

a. The court states the rule for infringement as follows: "To succeed in a copyright infringement action, a plaintiff must prove ownership of the copyright and copying by the defendant." As there was no dispute over whether Steinberg owned a valid copyright in his image, the only issue to be decided was whether the defendants had copied the image when they created the movie poster. To determine whether the defendants had copied the image, the court turned to circumstantial evidence of access and substantial similarities between the two works. The court found ample evidence of the defendants' access to the copyrighted work; indeed, the defendants admitted at trial that they had used Steinberg’s poster as inspiration for their own. As to the question of "substantial similarity" between the two works, the court asked "whether an average lay observer would recognize the alleged copy as having been appropriated from the copyrighted work."

b. Although it acknowledged that the idea of drawing a world map "from an egocentrically myopic perspective" could not be copyrighted, the court nevertheless held that the defendants had gone far beyond copying merely the idea of the Steinberg poster and had in fact copied its expression. As examples, the court cited the angle, layout, and details of the four city blocks depicted; the use of color on the horizon and sky; the distinctive lettering used in both for place names as well as the title at the top; and the overall stylistic impression of the two works. The court rejected the argument that any similarity between the works involved unprotectible scènes à faire, or standard themes common to any depiction of New York.

c. The court held that the Moscow on the Hudson poster was not a parody because it was not meant to satirize the Steinberg image itself, but merely satirized the same concept of the parochial New Yorker that was parodied by Steinberg's work. Because the copyrighted work was not an object of the parody, the appropriation of the image was not fair use.

iv. Limitations on the Exclusive Right to Copy

a. Fair use (§§107)

b. Archival copies for public libraries (§108)

c. Ephemeral copies by broadcasters (§112 & §118(d))

d. Cover license (§ 115)

e. Non-commercial copies of musical compositions and sound recordings (§ 1008)

3. The Right to Prepare Derivative Works

a. Anderson v. Stallone

i. It was strikingly clear to the Court that Anderson's work was a derivate work; that under 17 U.S.C. section 106(2) derivate works are the exclusive privilege of the copyright holder (Stallone, in this case); and that since Anderson's work is unauthorized, no part of it can be given protection.

ii. Anderson attempted to argue that Congressional history of 17 U.S.C. section 103(a) indicates that Congress intended non-infringing portions of derivate works to be protected. The Court disagreed, citing legal scholarship (Professors Melville Nimmer and David Nimmer) and case law interpretations of 103(a).

4. The Distribution Right

a. § 106(3) grants copyright owners the right to distribute, through sale or other means, either the original or subsequent copies of a copyrighted work.

b. Thus, copying and selling a copyright owner’s work without authorization violates both the right to copy and the right to distribute.

c. Limitations on exclusive right to distribute?

i. First Sale Doctrine§ 109

a. Does the first sale doctrine apply to pictures mounted on ceramic tiles and then sold to the public?

ii. Importation Right

a. Can others import copyrighted works acquired abroad into the US?

5. Public Performance and Display Rights

a. Copyright owners possess the exclusive right to perform or display their works publicly. 17 U.S.C. § 106(4), (5).

b. Section 106(4): “in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, [the exclusive right] to perform the copyrighted work publicly”

c. Section 106(5): “in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, [the exclusive right] to display the copyrighted work publicly”

d. Section 106(6): “in the case of sound recordings, [the exclusive right] to perform the copyrighted work publicly by means of a digital audio transmission.”

e. What is a public performance or display? (Section 101)

i. to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or

ii. to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or different times.”

6. MORAL RIGHTS

a. What are the rights provided to authors in the Visual Artists Rights Act – Section 106A?

i. Section 106A: “Rights of Certain Authors to Attribution and Integrity” provides the author of a work of visual art has right to:

a. Claim authorship of work

b. Prevent use of name on works not created by author

c. Prevent use of name on works distorted, mutilated, or otherwise modified if prejudicial to honor or reputation

d. Prevent intentional distortion, mutilation, or modification of work if prejudicial to honor or reputation

F. DEFENSES

1. Fair Use

a. 17 U.S.C. § 107 Exclusive Rights: Fair Use

i. “Notwithstanding the provisions of sections 106 and 106A the fair use of a copyrighted work,

a. including such use by reproduction in copies or phonorecords or by any other means specified by [sections 106 and 106A],

b. for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research,

c. is not an infringement of copyright.

ii. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include-

a. (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

b. (2) the nature of the copyrighted work;

c. (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

d. (4) the effect of the use upon the potential market for or value of the copyrighted work.

iii. The fact that a work is unpublished shall not by itself bar a finding of fair use if such finding is made upon consideration of all the above factors.”

b. Harper & Row, Publishers, Inc., et al. v. Nation Enterprises et al.

i. 12 Monkeys Chair Thing

ii. Publication of portions of a work soon to be published does not qualify as fair use.

c. Videotaping

i. Sony Corporation of America v. Universal City

a. Manufacturers of home video recording machines could not be liable for contributory copyright infringement for the potential uses by its purchasers, because the devices were sold for legitimate purposes and had substantial non-infringing uses. Personal use of the machines to record broadcast television programs for later viewing constituted fair use. Ninth Circuit Court of Appeals reversed.

b. (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

c. (2) the nature of the copyrighted work;

d. (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

e. (4) the effect of the use upon the potential market for or value of the copyrighted work

d. Photocopying

i. American Geophysical Union, et al. v. Texaco Inc.

a. Photocopying of copyrighted material converting scholarly articles into a useful format is not a transformative use of the material and therefore not a fair use.

b. Not sufficiently transformative.

e. Parodies

i. Campbell v. Acuff-Rose Music, Inc.

a. The commercial nature of a parody does not render it a presumptively unfair use of copyrighted material. Rather, a parody's commercial character is only one element that should be weighed in a fair use inquiry.

b. The commercial purpose of a work is only one element of the inquiry into the work’s purpose and character for fair use purposes.

ii. Leibovitz v. Paramount Pictures, 37 F.3d 109 (2d Cir. 1998)

a. Examining the four fair use factors, the court found that although Paramount's photographer drew heavily from Leibovitz' composition, in light of Paramount's parodic purpose and absence of market harm the use of the photograph was a fair use. While Leibovitz had argued that she was entitled to licensing revenue from the photograph, the court found that parodies were likely to generate little or no licensing revenue.

2. Other Defenses

a. Independent Creation

b. Consent/License

c. Inequitable Conduct

d. Copyright Misuse

e. First Amendment

f. Immoral/Illegal/Obscene Works.

i. Modern trend rejects such a defense

g. Statute of Limitations

i. 3 years after the claim accrued.

G. Indirect Liability

1. Respondeat Superior

2. Vicarious Liability

3. Contributory Liability

4. Sony Corporation of America v. Universal City Studios, Inc.

a. Page 575 of CB

b. If vicarious liability is to be iimposed on petitioners in this case, it must rest on the fact that they have sold equipment with constructive knowledge of the fact that their consumers may use that equipment to make unauthorized copies of copyrighted material—there is no precedent in the law of copyright for the imposition of vicarious liability on such a theory.

c. The sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses.

H. Digital Copyright Law

1. Digital Copyright Legislation

a. Prohibition on Commercial Record and Software Rental

b. Digital Audio Tape Devices

c. Webcasting

d. Criminal Enforcement

e. Anticircumvention Prohibitions

f. Online Service Provider Safe Harbors

i. Title II: Online Service Provider Safe Harbors (§ 512)

a. Insulates OSP from liability for transmitting, routing, storing, caching, or linking to unauthorized content if meet specific conditions set forth in section 512 and threshold conditions

b. Threshold conditions:

1. Adopt, implement, and inform subscribers of policy for providing for termination of users who are repeat copyright infringers

2. Adopt standard technical measures used by copyright owners to identify and protect copyrighted works

3. Designate an agent to receive notification of claimed infringement from copyright owners and register than agent with the Copyright Office

2. DIGITAL MILLENIUM COPYRIGHT ACT

a. Title I: Anti-circumvention & Anti-trafficking Provisions (17 U.S.C. §1201)

b. (a) For technological measures controlling access to copyrighted work

i. (1) Prohibits acts to circumvent measures controlling access to the work

ii. (2) Prohibits manufacture, import, trafficking in, or marketing of technology, products, or services that

a. (A) are “primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a [protected] work”;

b. (B) have “only limited commercially significant purpose or use other than to circumvent” such technological protection measures; or

c. (C) are “marketed . . . with that person’s knowledge for use in circumventing” such technological protection measures

c. (b) For technological measures regulating use of work

i. Prohibits manufacture, import, trafficking in, or marketing of technology, products, or services that meet criteria (A), (B), or (C) above

ii. Does not prohibit acts of circumvention of use controls once access granted

3. Thus, the DMCA prohibits

a. Circumvention of technological measures that control access to copyrighted works (§1201(a)(1))

b. Trafficking in technology, products, or services that circumvent technological measures that

i. (a) control access to copyrighted works (§1201(a)(2)) or

ii. (b) regulate use of work once access is granted (§1201(b)(1))

4. Enforcement

a. Digital Hardware Devices

b. Search Engines, Services, and Software

i. MGM Studios Inc. v. Grokster, Ltd.

a. ISSUE: Under what circumstances is the distributor of a product capable of both lawful and unlawful use liable for acts of copyright infringement by a third parties using the product.

b. Court held 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.

ii. Perfect 10 v. Google

iii. Perfect 10 v. Amazon.com, Inc. 487 F.3d 701 (9th Cir. 2007) Supp. 11

a. Google’s use of thumbnails is fair use. Substantial public value and Google has put the thumbnails to a substantially different use than intended by perfect 10.

b. Could be held to be contributorily liable if Google had knowledge that infringing perfect 10 images were available using its search engine, and it could take simple measures to prevent further damage to perfect 10’s copyrighted works, and Google failed to take such steps.

I. Enforcement and Remedies

1. Sheldon et al. v. Metro-Goldwyn Pictures Corp. et al.

a. There is no basis to award someone who has had his copyright infringed upon any amount of profits made by the infringer above that which cannot be attributed to infringement itself.

b. Injunctive Relief

i. Injunctions (§ 502)

a. Impounding and Disposition of Infringing Articles (§ 503)

ii. Damages (§ 504)

a. Actual damages and any additional profits of the infringer or

b. Statutory damages

c. Section 504(c)(1): “the copyright owner may elect…to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable…in a sum not less than $750 or more than $30,000 as the court considers just”

d. Section 504(c)(2): if willful infringement, the court may increase award “to a sum of not more than $150,000”

c. REMEDIES

i. Injunctions (§ 502)

ii. Impounding and Disposition of Infringing Articles (§ 503)

iii. Damages (§ 504)

iv. Attorney’s Fees and Costs (§ 505)

v. Criminal Prosecution

IV. TRADEMARK LAW

A. Introduction

1. Protected under Federal and State Law

a. Federal Law – focus in this class

b. Protected under the Commerce clause, not the Patent and Copyright clause, of the U.S. Constitution

c. Lanham Act, §§ 1 et seq. (15 U.S.C. §§ 1051 et seq.)

2. State Law

3. E.g. California Business and Professions Code, §§ 14200 et seq.

4. Background

5. Brief Overview of Trademark Theory

6. The Basic Economics of Trademarks and Advertising

B. What Can Be Protected as a Trademark?

1. Trademarks, Trade Names, and Service Marks

2. The term ‘trademark’ includes any word, name, symbol, or device, or any combination thereof –

a. (1) used by a person, or

b. (2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this Act,

c. to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.”

3. A trademark is a symbol used by a person to identify and distinguish her goods from those manufactured or sold by others and to indicate the source of the goods. 15 U.S.C. § 1127.

a. Service marks identify a source of services.

b. What is a Service Mark? (15 U.S.C. § 1127)

i. “The term ‘service mark’ includes any word, name, symbol, or device, or any combination thereof –

a. (1) used by a person, or

b. (2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this Act,

ii. to identify and distinguish the services of one person, including a unique service, from the services of others and to indicate the source of the services, even if that source is unknown . . . .

iii. Can trade names be registered as a mark?

iv. “The terms ‘trade name’ and ‘commercial name’ mean any name used by a person to identify his or her business or vocation.” (15 U.S.C. § 1127)

4. Color, Fragrance, and Sounds

a. Qualitex Co. v. Jacobson Products Co., Inc.

i. Color alone can be registered as a trademark. IT carries secondary meaning, no functional aspect, and not limited.

b. “The term ‘trademark’ includes any word, name, symbol, or device, or any combination thereof – [used] to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods….” (15 U.S.C. § 1127)

5. Certification and Collective Marks

a. A certification mark is a symbol used by a person other than its owner to certify regional or other origin, material, mode of manufacture, quality, accuracy, or other characteristics of such person’s goods or services or that the work or labor on the goods or services was performed by members of a union or other organization.

b. “The term ‘certification mark’ means any word, name, symbol, or device, or any combination thereof - (1) used by a person other than its owner, or (2) which its owner has a bona fide intention to permit a person other than the owner to use in commerce and files an application to register on the principal register established by this chapter, to certify regional or other origin, material, mode of manufacture, quality, accuracy, or other characteristics of such person's goods or services or that the work or labor on the goods or services was performed by members of a union or other organization.” (15 U.S.C. § 1127)

c. Collective mark is a trademark or service mark used by the members of a group or organization.

i. “The term ‘collective mark’ means a trademark or service mark – (1) used by the members of a cooperative, an association, or other collective group or organization, or (2) which such cooperative, association, or other collective group or organization has a bona fide intention to use in commerce and applies to register on the principal register established by this chapter, and includes marks indicating membership in a union, an association, or other organization.” (15 U.S.C. § 1127)

6. Trade Dress and Product Configurations

a. The design and packaging of materials, and even the design and shape of a product itself, if the packaging or the product configuration serve the same source-identifying function as trademarks.

b. Lanham Act § 43(a)(1) & 15 U.S.C. § 1125(a)(1)

i. “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 misrepresentation of fact, which –

a. (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 or services, or commercial activities by another person, or

b. (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities,

ii. 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.”

C. Establishment of Trademark Rights

1. Distinctiveness

Less Distinctive = Less Protection

More Distinctive = Most Protection

Generic

Denotes common

name for

class of products

No protection

Shredded Wheat,

Aspirin, Thermos,

Cellophane

Descriptive

Describes some

quality or

characteristic

Protection if

secondary meaning

Suggestive

Suggests some

quality or

characteristic

Automatic

Protection

Arbitrary or Fanciful

No relationship or connection to product

Automatic

Protection

a. Classification of Marks and Requirements for Protection

i. For trademarks not deemed inherently distinctive, the Lanham Act requires proof of secondary meaning.

ii. Marks requiring secondary meaning:

a. Descriptive mark: is defined as a word, picture, or other symbol that directly describes something about the goods or services in connection with which it is used as a mark.

b. Geographic marks: e.x. Nantucket Brew

c. Personal name marks: e.x. O’Mally’s Beer.

d. Secondary meaning does not mean that buyers need to know the identity of the source, only that the product or service comes from a single source.

iii. Zatarain’s, Inc. v. Oak Grove Smokehouse, Inc.

a. Descriptive terms are not protected by trademark absent a showing of secondary meaning in the minds of the public.

iv. What is secondary meaning?

a. In the minds of the consuming public, the primary significance of the term is not the product but the producer – the source of the product

v. Secondary meaning is required for: descriptive marks, geographic marks, personal names, colors, product designs (product configurations), and non-inherently distinctive product packaging and other trade dress

vi. Secondary Meaning Factors:

a. (1) association in minds of consumers between the mark and a single source,

b. (2) advertising under the mark,

c. (3) length of use of the mark,

d. (4) exclusive use of the mark,

e. (5) sales of the product under the mark,

f. (6) size or prominence of the business,

g. (7) an established place in the market,

h. (8) the number of customers,

i. (9) proof of deliberate copying of the mark by others,

j. (10) actual consumer confusion caused by unauthorized use of mark,

k. (11) use of the mark in the media and trade journals

b. Distinctiveness of Trade Dress and Product Configuration

i. Two Pesos, Inc. v. Taco Cabana, Inc.

a. Trade dress can include features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques.

b. Inherently distinctive trade dress may be subject to trademark protection even if it has not acquired a secondary meaning.

ii. Wal-Mart Stores, Inc. v. Samara Brothers, Inc.

a. An unregistered trade dress design under § 43(a) of the Lanham Act, absent a showing of secondary meaning, is not distinctive and, therefore, not protected from infringement.

2. Priority

a. Zazu Designs v. L’Oreal, S.A.

i. Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated.

b. Is use in commerce currently required for a trademark application?

i. Trademark Law Revision Act of 1989 – now can apply to register a mark based solely on intent to use the mark in commerce

c. Geographic Limitations on Trademark Use – what is the geographic scope of your trademark rights if:

i. Trademark registered on federal register?

ii. Common law (unregistered) trademark?

d. Secondary Meaning in the Making – how does a firm establish priority in a descriptive mark? First firm to use the mark or first firm to establish secondary meaning?

3. Trademark Office Procedures

a. Principle vs. Supplemental Register

b. Grounds for Refusing Registration Lanham Act § 2, 15 U.S.C. § 1052

i. “No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it consists of

a. (a) Immoral, deceptive, scandalous matter; disparages or falsely suggests certain connections; certain false geographical indications for wine and spirits

b. (b) Flag, coat of arms, or other insignia of U.S., state, city, or foreign nation

c. (c) Name, portrait, signature of living individual or deceased President while widow alive

d. (d) Mark likely to cause confusion with another mark

e. (e)(1) merely descriptive or deceptively misdescriptive marks

f. (e)(2) primarily geographically descriptive marks

g. (e)(3) primarily geographically deceptively misdescriptive marks

h. (e)(4) marks that are primarily merely a surname

i. (e)(5) matter that is functional

c. But Certain Marks That “Become Distinctive” Can Be Registered

i. Lanham Act § 2(f), 15 U.S.C. § 1052(f): “Except as expressly excluded in paragraphs (a), (b), (c), (d), (e)(3) and (e)(5) of this section, nothing in this chapter shall prevent the registration of a mark used by the applicant which has become distinctive of the applicant’s goods in commerce…”

ii. Thus, cannot register the following even with proof of secondary meaning:

iii. (a) Immoral, deceptive, or scandalous matter, etc.

iv. (b) Flag, coat of arms, or other insignia of U.S., state, city, or foreign nation

v. (c) Name, portrait, signature of living individual or deceased President while widow alive

vi. (d) Mark likely to cause confusion with another mark

vii. (e)(3) primarily geographically deceptively misdescriptive marks

viii.(e)(5) comprises matter that is functional

d. But can register the following marks with proof of secondary meaning:

i. (e)(1) merely descriptive or deceptively misdescriptive marks

ii. (e)(2) primarily geographically descriptive marks

iii. (e)(4) marks that are primarily merely a surname

e. Immoral or Scandalous Marks

i. “No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it

ii. (a) Consists of or comprises immoral, deceptive, or scandalous matter…

f. Geographic Marks

i. “No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it

a. (e) Consists of a mark which . . .

1. (2) when used on or in connection with the goods of the applicant is primarily geographically descriptive of them . . .

2. (3) when used on or in connection with the goods of the applicant is primarily geographically deceptively misdescriptive of them…”

ii. In re Nantucket, Inc.

a. For a mark to be geographically deceptively misdescrpitive, there must be a reasonable basis for believing that purchasers are likely to be deceived.

iii. Marks Which Are “Primarily Merely a Surname”

a. Lanham Act § 2(e)(4), 15 U.S.C. § 1052(e)(4)

1. “No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it

a. (e) Consists of a mark which . . .

i. (4) is primarily merely a surname

g. Opposition

i. § 13(a) of the Lanham Act

a. If you feel you would be damages by the registration of a mark, one may file an opposition in the PTO.

h. Cancellation

i. The Lanham Act allows one who believes that he is or will be damaged by registration to petition for cancellation of marks on either the Principal of Supplemental register.

ii. Even after cancellation of the registration, a mark may still enjoy common law rights.

i. Concurrent Registration

i. Most important condition for approval of concurrent use registration is that such registration cannot be likely to cause confusion of buyers or others.

4. Incontestability

a. Lanham Act § 15, 15 U.S.C. § 1065

i. “Except on a ground for which application to cancel may be filed at any time under paragraphs (3) and (5) of section 1064 of this title, and except to the extent, if any, to which the use of a mark registered on the principal register infringes a valid right acquired under the law of any State or Territory by use of a mark or trade name continuing from a date prior to the date of registration under this chapter of such registered mark, the right of the registrant to use such registered mark in commerce for the goods or services on or in connection with which such registered mark has been in continuous use for five consecutive years subsequent to the date of such registration and is still in use in commerce, shall be incontestable…

b. Park’N Fly, Inc. v. Dollar Park and Fly, Inc.

i. An incontestable mark cannot be challenged on the grounds that it is merely descriptive.

ii. Congress provides that §§ 33(b) and 15 of the Lanham Act provide grounds which to challenge an incontestable mark.

D. Infringement

1. Elements of a federal trademark infringement claim

a. Plaintiff must prove all of these elements:

i. Plaintiff has a valid mark entitled to protection under the Lanham Act

ii. Defendant “used” the mark

iii. Defendant used the mark “in commerce”

iv. Defendant used the mark “in connection with the sale…or advertising of any goods or services”

v. Without the plaintiff’s consent

vi. Defendant’s use of the mark is likely to cause consumer confusion

2. Infringement of Registered Marks Lanham Act § 32(1)(a), 15 U.S.C. § 1114(1)(a)

a. “Any person who shall, without the consent of the registrant –

i. (a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive….

b. shall be liable in a civil action by the registrant for the remedies hereinafter provided. . . .”

3. The Requirement of Trademark Use

a. 1-800 Contacts, Inc. v. WhenU.com

i. An Internet marketer does not use another’s trademark within the meaning of the Lanham Act when the marketer causes a “pop-up” ad for the trademark holder’s competitors to appear on a computer user’s desktop when the user accesses the trademark holder’s website.

4. Likelihood of Consumer Confusion

a. AMF Incorporated v. Sleekcraft Boats

i. In determining whether confusion between related goods is likely, several factors must be considered including strength and similarity of the marks, type and proximity of the goods, and marketing channels used.

b. Likelihood of Confusion Factors

i. Strength of the mark

ii. Proximity of the goods

iii. Similarity of the marks

iv. Evidence of actual confusion

v. Marketing channels used

vi. Type of goods and degree of purchaser care

vii. Defendant’s intent in selecting the mark

viii.Likelihood of expansion of product lines

ix. Other factors? This list is nonexclusive.

c. Other Types of Confusion (see page 732)

i. Confusion as to Source

ii. Confusion as to Sponsorship

iii. Initial Interest Confusion

iv. Post-Sale Confusion

v. Reverse Confusion

5. Definition of “use in commerce” Lanham Act § 45, 15 U.S.C. § 1127

a. In the construction of this chapter, unless the contrary is plainly apparent from the context –

b. The term “use in commerce” means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. For purposes of this chapter, a mark shall be deemed to be in use in commerce—

i. (1) on goods when—

a. (A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and

b. (B) the goods are sold or transported in commerce, and

c. (2) on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services.

6. Dilution

a. Elements of a federal trademark dilution claim

i. The plaintiff must prove all of these elements:

a. Plaintiff owns a famous mark that is distinctive

b. Defendant has commenced using a mark in commerce that allegedly is diluting the famous mark

c. A similarity between the defendant’s mark and the famous mark gives rise to an association between the marks

d. The association is

1. likely to impair the distinctiveness of the famous mark [dilution by blurring] or

2. likely to harm the reputation of the famous mark [dilution by tarnishment]

b. Federal Trademark Dilution Lanham Act § 43(c)(1), 15 U.S.C. § 1125(c)(1)

i. (c) Dilution by blurring; dilution by tarnishment

ii. (1) Injunctive relief Subject to the principles of equity, the owner of a famous mark that is distinctive, inherently or through acquired distinctiveness, shall be entitled to an injunction against another person who, at any time after the owner’s mark has become famous, 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.

c. Is the Mark Famous? Lanham Act § 43(c)(2), 15 U.S.C. § 1125(c)(2)

i. (2) Definitions

ii. (A) For purposes of paragraph (1), a mark is famous if 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 mark’s owner. In determining whether a mark possesses the requisite degree of recognition, the court may consider all relevant factors, including the following:

iii. (i) The duration, extent, and geographic reach of advertising and publicity of the mark, whether advertised or publicized by the owner or third parties.

iv. (ii) The amount, volume, and geographic extent of sales of goods or services offered under the mark.

v. (iii) The extent of actual recognition of the mark.

vi. (iv) Whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register.

d. Louis Vuitton Malletier S.A. v. Haute Diggity Dog

i. Parody of LV marks, did not diminish LVM marks’ capacity to identify a single source.

e. What is Dilution by Blurring? Lanham Act § 43(c)(2), 15 U.S.C. § 1125(c)(2)

i. (B) For purposes of paragraph (1), “dilution by blurring” is association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark. In determining whether a mark or trade name is likely to cause dilution by blurring, the court may consider all relevant factors, including the following:

ii. (i) The degree of similarity between the mark or trade name and the famous mark.

iii. (ii) The degree of inherent or acquired distinctiveness of the famous mark.

iv. (iii) The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark.

v. (iv) The degree of recognition of the famous mark.

vi. (v) Whether the user of the mark or trade name intended to create an association with the famous mark.

vii. (vi) Any actual association between the mark or trade name and the famous mark.

f. The Exclusions: What is Not Dilution? Lanham Act § 43(c)(3), 15 U.S.C. § 1125(c)(3)

i. (3) Exclusions The following shall not be actionable as dilution by blurring or dilution by tarnishment under this subsection:

ii. (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 for the person’s own goods or services, including use in connection with—

iii. (i) advertising or promotion that permits consumers to compare goods or services [e.g., comparative advertising]; or

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

v. (B) All forms of news reporting and news commentary.

vi. (C) Any noncommercial use of a mark.

g. What is Dilution by Tarnishment? Lanham Act § 43(c)(2), 15 U.S.C. § 1125(c)(2)

i. (B) For purposes of paragraph (1), “dilution by blurring” is association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark. In determining whether a mark or trade name is likely to cause dilution by blurring, the court may consider all relevant factors, including the following:

ii. (i) The degree of similarity between the mark or trade name and the famous mark.

iii. (ii) The degree of inherent or acquired distinctiveness of the famous mark.

iv. (iii) The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark.

v. (iv) The degree of recognition of the famous mark.

vi. (v) Whether the user of the mark or trade name intended to create an association with the famous mark.

vii. (vi) Any actual association between the mark or trade name and the famous mark.

viii.(C) For purposes of paragraph (1), “dilution by tarnishment” is association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark.

h. Franchising and Merchandising

i. Problem: traditionally, trademarks were though of as symbols representing products, rather than as products in and of themselves

7. DOMAIN NAMES AND CYBERSQUATTING

a. most common types of abusive registration of trademarks as domain names are:

i. "Cybersquatting": Bad-faith intent registration; a cybersquatter can either sell to the highest bidder, or collect money by "domain parking"

ii. “Typosquatting”: This is cybersquatting of the tendency to mistype certain words in Internet addresses, such as spelling Google as "Googel"

iii. "Domainer": A purveyor of domain names, who makes income from buying and selling them

iv. "Dropcatcher": A person or company who rushes to purchase, or "catch" popular domain names quickly when their registrations lapses

v. “Domain Tasting": Getting domains for a "five-day free refund period" to test, then dropping for refund the ones that didn't pan out

vi. "Domain Parking": A way of making money by having a small site with just advertising linked to a related domain name, where the owner paid a small amount whenever a person clicks on an ad; which can add up to millions in some cases.

b. Methods to Attack Cybersquatting

i. Federal Trademark Law

a. Infringement (15 U.S.C. §§ 1114(1), 1125(a)(1))

b. Dilution (15 U.S.C. § 1125(c))

ii. Anticybersquatting Consumer Protection Act (15 U.S.C. § 1125(d))

iii. State Trademark Law

iv. Private Dispute Resolution Procedures

a. Uniform Dispute Resolution Procedure

c. Anticybersquatting Consumer Protection Act

i. Lanham Act § 43(d)(1)(A), 15 U.S.C. § 1125(d)(1)(A)

ii. “A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark . . ., if, without regard to the goods or services of the parties, that person --

a. (i) has a bad faith intent to profit from that mark …; and

b. (ii) registers, traffics in, or uses a domain name that -

1. (I) in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark;

2. (II) in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark; or

3. (III) is a trademark, word, or name protected [by a special statute, e.g., Red Cross, Olympics]”

iii. Shields v. Zuccarini

a. Registering a web site domain name that is an intentional misspelling of a distinctive or famous name is unlawful and, under the Anticybersquatting Consumer Protection Act, may result in the awarding of statutory damages or attorney fees.

iv. Elements of an ACPA Claim (15 U.S.C. §1125(d)(1)(A))

a. Plaintiff is required to prove:

b. Plaintiff’s mark is distinctive or famous at the time defendant registered the domain name

c. Defendant’s domain name is identical or confusingly similar to, or dilutive of, Plaintiff’s mark

d. Defendant registered, trafficked in, or used the domain name with a bad faith intent to profit from the mark

v. Anticybersquatting Consumer Protection Act – Bad Faith Intent Factors

a. Lanham Act § 43(d)(1)(B), 15 U.S.C. § 1125(d)(1)(B)

1. “In determining whether a person has a bad faith intent … a court may consider factors such as, but not limited to –

2. (I) the trademark or other intellectual property rights of the person, if any, in the domain name;

3. (II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;

4. (III) that person’s prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;

5. (IV) the person’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name;

6. (V) the person’s intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, or affiliation, or endorsement of the site;”

7. “(VI) the person’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person’s prior conduct indicating a pattern of such conduct;

8. (VII) the person’s provision of material and misleading false contact information when applying for the registration of the domain name, the person’s intentional failure to maintain accurate contact information, or the person’s prior conduct indicating a pattern of such conduct;

9. (VIII) the person’s registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and

10. (IX) the extent to which the mark incorporated in the person’s domain name registration is or is not distinctive and famous within the meaning of subsection (c)(1) of section 43 [15 U.S.C. § 1125]”

vi. Anticybersquatting Consumer Protection Act – Safe Harbor

a. Lanham Act § 43(d)(1)(B)(ii), 15 U.S.C. § 1125(d)(1)(B)(ii)

1. “Bad faith intent . . . shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.”

b. People for the Ethical Treatment of Animals v. Doughney (4th Cir. 2001)

1. To establish an Anticybersquatting Consumer Protection Act violation, it must be proved there was a bad faith intent to profit from using the parodied domain name and that the domain name is identical or confusingly similar to, or dilutive of, the distinctive and famous mark.

vii. What is a Legitimate Interest in a Domain Name?

a. Concurrent user

b. Personal name or nickname

c. Legal reseller of markholder’s product

d. Criticism or parody of markholder

e. Generic or descriptive words

viii.The Uniform Dispute Resolution Procedure (UDRP)

a. UDRP Mandatory Administrative Proceeding Elements of a UDRP claim

1. The complainant must prove

a. (i) the registrant’s domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and

b. (ii) the registrant has no rights or legitimate interests in respect of the domain name; and

c. (iii) the registrant’s domain name has been registered and is being used in bad faith.

8. Contributory Infringement

a. A number of courts have held that contributory infringement of trademarks is illegal.

9. False Advertising

a. Lanham Act § 43(a)(1), 15 U.S.C. § 1125(a)(1)

a. (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities,

ii. 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.”

iii. Johnson & Johnson*Merck Consumer Pharmaceuticals Co. v. Smithkline Beecham Corp.

a. An advertisement is false and misleading only if a significant part of the audience holds the false belief and injury is suffered.

b. Lanham Act § 33(a), 15 U.S.C. §1115(a)

i. Evidentiary Value of Registration

a. Registration on the principal register is prima facie evidence of the validity of the registered mark and of registration, ownership, and the exclusive right to use the mark with those goods or services

b. “but shall not preclude another person from proving any legal or equitable defense or defect, including those set forth in subsection (b) of this section, which might have been asserted if such mark had not been registered”

E. DEFENSES

1. Lanham Act § 33(b), 15 U.S.C. §1115(b) Defenses

a. Such conclusive evidence of the right to use the registered mark is subject to proof of infringement and the following defenses or defects

i. Registration or incontestable right was obtained fraudulently

ii. Mark abandoned by the registrant

iii. Mark used by registrant to misrepresent source of goods or services

iv. Certain fair uses by the defendant

v. Prior continuous use by defendant

vi. Prior registration and use by defendant

vii. Mark used to violate antitrust laws

viii.Mark is functional

ix. Equitable principles, including laches, estoppel, and acquiescence, apply

2. Genericness

a. The Murphy Door Bed v. Interior Sleep Systems

i. Where the public is said to have expropriated a term established by a product developer, the burden is on the defendant to prove the term has become generic.

b. Lanham Act Provisions Regarding Generic Terms

i. Cancellation of Registration: 15 U.S.C. §1064(3)

a. Can petition to cancel registration of a registered mark that “becomes the generic name for the goods or services, or a portion thereof, for which it is registered”

b. How do we determine if the mark is generic?

1. “The primary significance of the registered mark to the relevant public rather than the purchaser motivation shall be the test for determining whether the registered mark has become the generic name of goods or services on or in connection with which it has been used.”

c. Incontestable Marks: 15 U.S.C. §1065(4)

d. “no incontestable right shall be acquired in a mark which is the generic name of the goods or services or a portion thereof, for which it is registered.”

3. Functionality

a. TrafFix Devices Inc. v. Marketing Displays Inc.

i. An expired utility patent, determined to serve solely functional purposes, is not entitled to trademark protection.

b. Lanham Act Provisions Regarding Functionality

i. Lanham Act § 2(e)(5), 15 U.S.C. §1052(e)(5)

a. Basis to Refuse Registration: Can refuse to register mark that “comprises any matter that, as a whole, is functional”

ii. Lanham Act § 14(3), 15 U.S.C. §1064(3)

a. Cancellation of Registration: Can petition to cancel registration of a registered mark that “is functional”

iii. Lanham Act § 43(a)(3), 15 U.S.C. §1125(a)(3)

a. Plaintiff has burden of proof on functionality for unregistered trade dress: “In a civil action for trade dress infringement under this Act for trade dress not registered on the principal register, the person who asserts trade dress protection has the burden of proving that the matter sought to be protected is not functional.”

iv. Lanham Act § 33(b)(8), 15 U.S.C. §1115(b)(8)

a. Defense: The right to use the registered mark is subject to the defense: (8) “That the mark is functional”

4. Abandonment

a. Abandonment Defined in 15 U.S.C. § 1127

b. “A mark shall be deemed to be ‘abandoned’ if either of the following occurs:

c. (1) When its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for 3 consecutive years shall be prima facie evidence of abandonment. ‘Use’ of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark.

d. (2) When any course of conduct of the owner, including acts of omission as well as commission, causes the mark to . . . lose its significance as a mark. . . .”

e. Major League Baseball Properties v. Sed Non Olet Denarius

i. Abandonment = Use discontinued with intent not to resume use

f. Unsupervised Licenses

i. Dawn Donut v. Hart’s Food Stores (2d Cir. 1959) CB 816

a. The holder of a registered trademark may not enjoin another’s use thereof in a different market.

5. Fair Use, Nontrademark (or Nominative Use), Parody, and the First Amendment

a. Traditional Fair Use 15 U.S.C. § 1115(b)(4)

i. “That the use of the name, term, or device charged to be an infringement is a use, otherwise than as a mark [i.e., a nontrademark use],

a. of the party’s individual name in his own business, or

b. of the individual name of anyone in privity with such party, or

c. [descriptive fair use] of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party, or their geographic origin”

ii. Nominative Fair Use

a. New Kids on the Block Case

b. Ninth Circuit: Elements of the Common Law “Nominative Fair Use Defense”

1. The defendant’s product or service must be one not readily identifiable without use of the plaintiff’s mark

2. Only so much of the plaintiff’s mark may be used as is reasonably necessary to identify the defendant’s product or service

3. The user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder (See CB 829-30 Comment 2)

c. Application of test – Terri Welles’ web site

1. Playboy and Playmate in metatags

2. Playmate of the Year 1981 on masthead of web site and banner ads

3. Repeated use of PMOY’81 as watermark on web pages

d. Mattel, Inc. v. MCA Records (9th Cir. 2002) CB 821

1. The parody of a well-known product, where such a product has assumed a role in society outside the protections offered under trademark law, is allowed under the First Amendment as protected noncommercial free speech.

2. Mattel/Rogers Balancing Test for Use of a Mark in Artistic or Literary Works

a. Per the Second Circuit in Rogers: “in general the [Lanham] Act should be construed to apply to artistic works only where the public interest in avoiding consumer confusion outweighs the public interest in free expression.”

b. “[L]iterary titles do not violate the Lanham Act ‘unless

i. [1] the title has no artistic relevance to the underlying work whatsoever, or,

ii. [2] if it has some artistic relevance, unless the title explicitly misleads as to the source or the content of the work.’”

e. Dilution Exclusions – Current Dilution Statute: Lanham Act § 43(c)(3), 15 U.S.C. § 1125(c)(3)

f. (3) Exclusions The following shall not be actionable as dilution by blurring or dilution by tarnishment under this subsection:

g. (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 for the person’s own goods or services, including use in connection with—

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

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

h. (B) All forms of news reporting and news commentary.

i. (C) Any noncommercial use of a mark.

F. REMEDIES

a. Lindy Pen Co. v. Bic Pen Co. (9th Cir. 1993) CB 839

i. In order to deter trademark infringement, an accounting of profits will be ordered in those cases where infringement yields financial rewards.

ii. 15 U.S.C. § 1117(a):

a. Plaintiff is entitled “to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.

b. The court shall assess such profits and damages or cause the same to be assessed under its direction.

c. In assessing profits the plaintiff shall be required to prove defendant’s sales only; defendant must prove all elements of cost or deduction claimed….”

V. RIGHT OF PUBLICITY

A. Elements of a Right of Publicity Claim

1. There are two different approaches used by the courts in right of publicity cases

2. I. Test used by California Court of Appeals in Eastwood, 149 Cal.App.3d 409, 417-18 (1983)

a. California Common Law Right of Publicity: The plaintiff must plead and prove

i. Defendant’s use of the plaintiff’s identity

ii. Defendant’s appropriation of the plaintiff’s name, voice, likeness, etc. to defendant’s advantage, commercial or otherwise

iii. lack of consent and

iv. resulting injury

3. California Civil Code § 3344

a. In addition to the above common law elements:

b. Defendant’s knowing “use of another’s name, voice, signature, photograph, or likeness”

c. For commercial purposes (“on or in products…or for purposes of advertising or selling…products”)

d. A direct connection between the use and the commercial purpose

4. II. Per Restatement Third, Unfair Competition § 46 & McCarthy: The plaintiff must plead and prove:

a. Plaintiff owns an enforceable right in the identity of a human being.

b. Defendant, without permission, has used some aspect of identity or persona in such a way that plaintiff is identifiable from defendant's use and

c. Defendant's use is likely to cause damage to the commercial value of that persona

5. Midler v. Ford Motor (9th Cir. 1988) CB 904

a. Deliberate imitation of a celebrity’s distinctive and widely known voice for commercial purposes constitutes tortious misappropriation under CA law.

6. California Right of Publicity Cal. Civ. Code § 3344

a. Unauthorized Commercial Use of Name, Voice, Signature, Photograph or Likeness

i. “(a) Any person who knowingly uses another’s name, voice, signature, photograph, or likeness, in any manner, on or in products…or for purposes of advertising or selling…products,… without such person’s prior consent…shall be liable for any damages….”

7. White v. Samsung Electronics (9th Cir. 1993) CB 908

a. A person’s right of publicity may be usurped even if the offending use did not incorporate that person’s likeness.

8. Comedy III Productions v. Saderup (Cal. S.C. 2001) CB 918

a. In balancing between the First Amendment and the right to publicity, the test is whether the work adds significant creative elements as to be transformed into something more than a mere celebrity likeness or imitation.