Intellectual Property Outline

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					Intellectual Property Problem 1-1: The Jungle Botanist - Distinction between creating something and discovering something. Even if you discover something and work it up to a certain state. - Rights may go to prevent medical uses of the substance - Purpose was to reward the person for making the substance a useful treatment. - Can someone else patent the same solution for disease B? o Patents give you the exclusive right to make use of or sell the patent for the invention o First inventor can independently prevent those who make, use, or sell that same invention. - Patents can prevent nonprofit scholarship and NGO sales - Rights Tribes people and tropical country have? o They can continue to use the flower as they have previously o Tribes people have to pay for the medicine like anyone else o Just because you add something on but still hit the elements of the patent, you are still infringing - What rights should your biochemist friend have? o Had work deserves commensurate reward (Individual Right) o Enhance public, national, and global welfare (Collective purpose). Person has a right to reward for benefit conferred to society - How long should the patent last? - What theory best explains the patent - Da Vine Patent What is Property? - Dominion/Exclusion o A sole and despotic dominion which one…claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe - Fixation/Possession o Some things “belong to the first occupant during the time he hold possession over them, and no longer. Such are the elements of light, air, water…wild and untameable etc. Not movable, wandering things. - Abandoned property returns to the commons - Utility/Justifiction o Sometimes “trespass is justifiable” to serve legal process, collect rent, enter into an inn or tavern, hunt wild beasts Why do we have Property? - What’s the point? o To protect moral rights? o To punish stealing? o To encourage hard work and investment? o To improve family and personal life? o To minimize conflicts and self-help? - Same or different than IP rights? COPYRIGHTS Labor/Desert Theory - Lockean Labor Theory o Each person owns their own activity or the work done by their own body. If they mix their activity with nature, then they change the status of those naturally occurring items and obtain moral entitlements to the improved state of nature. o The world is held in common prior to labor or appropriation for use o Application of labor, or improvement of land, turns common property into private property

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 Apple plucked from tree becomes property  Field enclosed for farming becomes property How to apply to Copyrights?  Labor turns common materials (pen paper) and facts ideas into finished products.  “Sacrificial days devoted to creative activities deserve rewards commensurate with efforts.” Is copying like stealing?  Does it matter if you copy the whole work?  Does it matter if you sell whatever you copy?  Does it matter whether you copy the work?  Does it matter whether you reduce the author’s income?  Does it matter whether you harm the integrity of the work? Which of the following is stealing?  Sampling someone else’s song in part of your own song  Creating a mashup of a song and unrelated TV show  Quoting a long passage from someone else’s book

Personality/Expectations Theory - Hegelian Personality Theory o IP rights vindicate autonomy and personality interests of inventors o Ideas are products of personality. Is that true? o Persons need reassurance about property to actualize their personalities o Does intellectual labor warrant special rights? o Is one’s autonomy invaded by another’s uses of an idea work? o Is stealing an invention an invasion of personhood? Economic theory of Property - Economic theory o Incentives – To invest in land, buildings, products o Efficient Uses – Encourage use by highest valued users  Internalizes costs by preventing free-riding on common property or the investments of others  Reduces transaction costs of protecting ones investments against free-riding  Secrecy  Self-help  Default rules  Licensing  Coase theorem Economic theory of copyright - Ideas and expression have a public good aspect – hard to make a profit. What is a public good? o Something you can’t exclude others from using o High fixed costs + low marginal costs = inadequate incentives o Copyrights impose artificial scarcity to enhance incentives Types of IP - How do methods of acquiring IP differ? o Copyright v. patent  Have to apply for a patent o Trademark vs. trade secret  Trademarks need to be filed on an application with the USPTO  Common law trademark rights, trademark light protections  Trade secrets - How do rights provided by IP differ? o Which doctrine provides broadcast rights?

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o Narrowest? Which rights last the longest? o Why provide such varying lengths of protection? o Which rights should last the longest? Which are based on the most persuasive theory? o Encouraging investment o Enforcing contracts o Preventing unfair practices

Types of Intellectual Property - Copyright – Original works of authorship - Trademark - False advertising - Patent - Trade secret - Covenants not to compete - Right of publicity - Misappropriation Feist Publications v. Rural Telephone (1991) - Facts o Rural Telephone was a public telephone utility for rural area in Kansas o Rural claimed copyright on telephone directory that listed individuals alphabetically with numbers and towns and businesses by alpha category o Rural obliged by law to update its directory annually o Feist published an area-wide telephone directories – sale of yellow pages o Feist took 5,000 white page listings from rural o Feist added thousands of licensed listings from other towns and addresses o Rural information came from the customers themselves - Holding o No Copyright infringement - Analysis o No one may claim originally as to facts / A directory that contains only unoriginal facts is afforded copyright protection if it features an original selection or arrangement o Originality is a constitutional requirement  Article 1, Section 8 of the constitution  “authors and writings” o Originality requirement satisfied where:  Minimal degree of creativity  Not just copying of another’s work, idea, or facts  Fact, ideas and discoveries aren’t copyrightable – “public domain” o Compilation of facts are:  Collection of assembly of data or pre-existing material  And a selection, arrangement, or organization of the material  So that the compilation judged as a whole is an original work. o What constitutes an author?  By labor, not literary skill or originality  First beginner of a thing, writer of a book, opposed to a compiler o Sweat of the brow theory  Lochean theory: When you expend effort through labor even if unoriginal, value is created and you are entitled to the copyright o SOB theory rejected:  Congress rejected it in 1976

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1976 Act – Copyright in a compilation extends only to be material contributed by the author of such work, as distinguished from the pre-existing material employed in the work Should Congress accept the sweat of the brow theory?  Users of facts and compilations say it would be a drain on productive use of facts and ideas.  ie. Sports reporting

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History of Copyright - Ancient Greece and Rome o No copyright, but literary prizes o Probable payments in Roman empire by publishers to authors - Ancient Israel and rabbinic Law o No copyright, an obligation to copy holy texts verbatim o Copyright developed and unfair competition ideas developed after invention of printing in 15th century - Printing patents, privileges, and prerogatives o 1504: King’s Printer had exclusive right to print certain statutes o 1539: First exclusive right to print bible o 1547: exclusive rights to print texts in latin, greek, and Hebrew - Statute of Anne of 1710 o An act for the encouragement of learning o By vesting the copies of the books in the authors o 14 year initial term, 14 year renewal term o 21 year term on existing works o No limit on importation or sale of ancient or foreign books o Can’t impose unreasonable or unjust prices o Place 10 copies with university libraries - US Copyright o US has power to enforce copyrights o “Congress shall have the power to promote science and the useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries” - Copyright Act of 1790 o Granted authors and proprietors the sole right and liberty of printing, reprinting, publishing, and vending such map, chart, book, or books o Copyright for 14 or 28 years under the act given to US citizens, not something o Had to register title in local district court, publish in newspaper, and deposit copy to secretary of state…removed in 1776. - Copyright Act of 1909 o Added right to copy o Added translation right o Protected lectures and other non-book writings o Added exclusive right to translate - Copyright Act of 1976 o Codified “fair use” o Loosened notice and registration requirements Time v. Geis (1968) - Zapruder took a clip of the Kennedy assassination/ created a more clear picture of the shots - 3 copies made of the tape o 1 to time o 2 to FBI - Time bought the film and copyright, and used stills to publish in their magazine - Gies reprinted some still shots in his book on the assassination, calling them “sketches” (copies of the stills) - Geis claimed the sketches were news, which is not copyrightable. o Want news to circulate

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o The mere record of isolated happenings, whether in words or photographs Time says that the photos are a particular portrayal of the news that is distinctive to the author Zapruder’s home movie was an original work of authorship entitled to copyright protection

GET CLASS NOTES I. Detective Comics v. Bruns Publications a. Copying of powers, costume, and incidents of superhero character violated copyright, though idea of benevolent superhero was unprotectable Atari v. North American Phillips a. North American infringed PACMAN copyright by imitating expression of ghost monster, and their interation Historical Extensions of Copyright Term o 1790 Act – existing and future works get 14 years from publication  Renewable for another 14 years if author survived o 1831 Act – 28 years from publication – renewable for 14 more years o 1908 – Berne Convention made life +50 o 1909 Act – 28 years form publication – renewable for 28 more years o 1976 Act – life +50 years start at creation  Published works with existing copyrights on 1/1/77 got 75 years  Works for hire got earlier of 75 from publication or 100 years from creation  Common law copyright unpublished woks preempted How can copyright be extended other than by # of years o Registration – must register if you want to sue. As a foreign author, you can go directly to lawsuit without passing through registration process o Notice requirement removed o Deposit with library of Congress– does not affect right to bring suit, but

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Eldred v. Ashcroft - Plaintiffs are digital libraries making public domain songs for free, book publishers that would have fallen into the public domain (persons and firms whose products and services build on PD work) - Defendant is Ashcroft, in his capacity as AG, protecting the powers of Congress - Here, P doesn’t have to wait to get sued because people could be harmed by the law before a suit could take place (People are deterred from suing in the first place) - Copyright Term Extension Act (CTEA) o Extends the copyright 70 years beyond the author’s death, as opposed to 50 years o For anonymous and work-for-hire works, there is a term of 95 years form publication or 120 years from creation - P argues that it is unconstitutional because: o It fails 1st amendment muster o It violates “limited times” provision of the Copyright Clause  If you change the term of copyright, it is always unlimited because limits can change after they’ve been set down  Because term is limited, the law stops a huge number of works from entering the public domain - Scope of judicial review of copyright terms under the constitution o Once court finds the term “limited”, Court decides on rational basis review - “Limited Times” means o Supreme Court “confined within certain bounds” o In drafting Copyright Clause, they started with “certain” suggesting fixed…”limited” means both fixed and short - Does 1st Amendment make the law invalid? o No

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Government’s policy arguments o Harmonization with European copyrights o Incentives  The longer we make the copyright, the more people will invest in copyrightable books  Individual level – Webster  Corporate level – Movie studios o Equity  Existing and future works  Old and new authors  International comity How does “progress of science” affect the meaning of “limited times”? o This law doesn’t give you extra incentive to write a book if it only gives you 20 years after death o Breyer: Any ban on dissemination of speech must be necessary to advance copyright-related purpose “Bad Policy” o Breyer – 20 extra years of copyright protection will mean transfer of billions of dollars to hodlers of copyrights o Losing access to out-of-print works o Little benefit to authors  Less than 2% of copyrights survive to 75 years  Have to discount future income to PV o Works for hire gets only 50-70 years in EU

Problems: - Auhtor a novel on 2/28/96 and die on 2/29/96 o 12/31/2066 - Author a magazine for an article in 1996 and then die, but magazine doesn’t publish until 2010? o 12/31/2105 - Author a novel in 1920, die in 1980 o Now in the public domain CCNV v. Reid - Facts o

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CCNV wanted a modern day nativity sculpture for a peace thing. They wanted a homeless family on top of a grate that would produce steam “third world America” o Reid went around to look at homeless families o They negotiated the price, and Reid had some discretion about carrying out the project. Very little project oversight. CCNV wanted sitting or lying figures, they gave him a deadline but paid him even though he violated it. CCNV wanted to tour with the sculpture, and Reid wanted to bronze the sculpture to prepare it for the tour. Reid wanted to copyright the work and control how the work was used after. What Is this a “work made for hire” o Employment determination for work for hire purposes should be made by reference to the common law of agency. The central question in an agency law inquiry is whether the hiring party has the "right to control the manner and means by which the product is accomplished.” o The factors to be considered include the skill required, the source of the instrumentalities and tools used in creating the work, where the work was created, the duration of the relationship between the parties, whether the hiring party has the right to assign additional projects to the hired party, the method of payment, the extent of the hired party's discretion over when and how long to work, the hired party's role in hiring and paying assistants, whether the hiring party is in business and whether the work is part of the regular business of the hiring party, the provision of employee benefits, and the tax treatment of the hired party.[3] The Court did not specify any factors that should be weighed more heavily than others, but made clear that an "employee" under the Copyright Act is not limited to a formal, salaried employee.

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SC said that Reid was the copyright holder because CCNV wasn’t Reid’s employer, and CCNV failed to overcome Reid’s status as an independent contractor o CCNV is not in the business of making sculptures o No employee benefits o No employee taxation o He used his own facilities o Own materials o Freedom to work o One shot specific job o Short duration of work o CCNVs nonprofit status o No additional assignments Work For Hire o If not a work-for-hire, then statute is owned by Reid o Committee only owned the statute, but not the derivative works or licenses What is an employee o Four possible interpretations  Formal, salaried employee  Common law of agency  Used by court because of statutory interpretation  Control over creative process  Right to control the creative process

Copyright Infringement Warner Brothers v. ABC - Warner Brothers has copyright on Superman, commercialized it, granted licenses, selling merchandise - D created TV series called “Greatest American Hero”, with name Ralph Hinckley. Ordinary guy clumsy with superhuman powers - ABC tried to get a license from Warner Brothers for Superboy TV show, they denied it - Similarities? o Skintight costume and cape o Flight o X-ray vision o Impervious to bullets - Superman called to mind by catch-phrases - Holding: o No copyright infringement because it wasn’t substantially similar o “Substantial similarity” test  Substantial – Character encapsulates the “total concept and feel” o Exclusive right was in the acting out of the character. Copying a substantial part of the work  “Substantial” aspects are distinctive personality, back story, and overall tone  Timid, reluctant, Clousseau-like hero with traits now widely shared throughout the superhero genre o Consistent with Wonderman case?  Yes, in Wonderman, they weren’t distinguishing their hero from Superman like they were in this case.  Different result if case brought in 1930s or 1940s (fewer superheros around) o Consistent with Pac-Man?  Trying to satisfy the same demand, and is substantially similar in its main elements Fox v. MCA - Fox thought that CMA was copying Star Wars with Battlestar Ballactica

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Similarities between the works? o Battle for the galaxy o Similar characters  (father figure) Democratic forces Jedis v. Empire (totalitarian force)  Young hero whose father led democratic forces  Cynical fighter pilot  Daughter of leader of democratic forces  Friendly robots on democratic side o Similarities between plot scenes and action o Similar movie posters Issue: Whether production was so dissimilar to Plaintiff’s star wars work, so as to both ideas and expression of ideas, that no material issue of fact existed on the question of substantial similarity, and that question should be decided as a matter of fact Issue for jury (remanded) What if the heroes were bumbling issues? o Harder to say that you’re taking from the general atmosphere of science fiction works. If the case had come up later, it would have been easier for the defendent

Playboy v. Frena - Frena operates a subscription computer bulletin board service, that distributed unauthorized copies of Playboy Enterprises - Frena didn’t post the photos himself, but some subscribers uploaded the photos. As soon as he got hit with a summons he took the pictures down - Alleging display, reproduction, and distribution copyright infringement - There was copyright infringement: o Public distribution: Frena supplied the photos for distribution  Any act to sell, give away, rent, or lend any material embodiment o Display: displayed to the public although it was displayed on a website with many subscribers.  Screen projections, showing on television, viewing on information storage retrieval system, or transmition by computer o Public display?  Yes, to substantial persons outside the normal circle of family and friends Hypos - Showing artwork in background of TV show or documentary – Not a distribution because there are no tangible copies of the work. Reproduction? Tape made in the corporate headquarters. Distribution to affiliates and archives? o De minimus rule – If use is so insubstantial, small, temporary, that it shouldn’t be regarded as substantial o Ringold Case – About TV show Rock. Artist won. They have to take out the artwork from subsequent versions of the movie - Writing a guide or lexicon to a series of movies or novels? o Writing in depth guide, you wrote a new object on which the movie can be perceived and you’ve distributed to bookstores. Literary criticism vs. annotated guide of encyclopedia of the work. WAS an infringement of the book, tv show, movie - Transmitting NFL games to subscribers in another country o Reproduction and distribution if people put it on their VCRs o If Directv made a copy at their headquarters o If they just transmit the game, and there is no way for a fixed copy to get out, there is no distribution or reproduction - Remaking an old movie in a contemporary setting? o Is there substantial similarity? If the characters of similar, same events, same names, new jokes and contemporary plot twists

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o Difficult to measure the similarities between old and new work. Ad hoc decision-making o Lines between works blend into each other Loading a photo into computer memory o If the computer makes a photo copy in its memory – Yes Building a website concert times, dates, venues, from another website, and deep linking to where one can buy tickets How should substantial similarity be judged? o Harm to sales in existing markets  Novels, movies, derivative works o Harm to potential sales o Copying to immoral extent, or beyond customary practice o Substantial “fragmented literal similarity”  Taken a piece of the work, and that’s what is substantial o Comprehensive non-literal or literal similarity  Few of the same words or images, but use same characters, plot lines o Recognizable borrowing  If a consumer can recognize the original in the copy, that is substantial similarity  Used in graphic arts, paintings, sculptures

Public Performance and Display Rights - If it moves, it’s a performance. If it stays still, it’s a display - Section 109(c) – the owner of a particular copy of work is entitled to display it to viewers present at the place where the copy is located o Showing artwork in a gallery without authorization isn’t copyright infringement, but showing a movie in a theater is infringement - Section 101 – Definition of public performance or display: o 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 family and friends is gathered; or o 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 of process, whether the members of the public receiving the performance or display is “open to the public”, it doesn’t appear to matter how many people actually view the performance - Statutory exemptions that limit the scope of the performance and display rights o Public interest exemption  Most live educational performances and displays are exempt  Religious performance and displays exempt  Charitable uses  Homestyle exception  Own a bar, and show a TV music video, can do  Business exception o Compulsory Licenses  Cable Retransmission  Section 111 authorizes TV broadcast relays where they are not for profit and aren’t content-controlled  Satellite Retransmission  Satellites may rebroadcast signals to households that don’t receive normal broadcast transmission at a payment of a royalty  Jukeboxes  Public Broadcasting  Can transmit musical and artistic works upon payment of a compulsory license  Webcasting  Limits newly-created right of performance in digital sound recordings

Galoob Toys v. Nintendo of America - Holding: Galoob didn’t violate Nintendo’s copyrights - Game Genie allows a player to alter up to 3 features of a Nintendo game, is inserted between the Nintendo game and the system, and is temporary - Not a reproduction because they didn’t make any permanent changes to the game. Not a standalone copy of the game - Unauthorized display or performance o No, because it is still being used on your Nintendo - Issue: Whether consumers who purchase game genie would be infringing Nintendo’s copyrights by creating derivative works - Is the game genie creating a derivative work? o A “derivative work” is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. 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”. o Derivative works do not have to be fixed like a copyrightable work must be – the act does not require that the derivative work be protectable to be subject to infringement o This can’t be a derivative work because the game genie doesn’t create a new work (using a turntable), just looking at things differently. - Fair Use: o Doctrine of Fair Use allows the holder of a privilege to use copyrighted material in a reasonable manner without consent of the copyright owner o What is “reasonable”? Supplant of demand o A family’s use of Game genie for private home enjoyment is a non-profit activity. o Nintendo failed to show any harm to the present market for its copyrighted games and failed to establish the reasonable likelihood of a potential market for slightly altered versions of the game - Fair Use Test o Nintendo must show by preponderance of the evidence that some meaningful likelihood of future harm exists  Nintendo has not created or planned to create altered version of its existing games, and Nintendo fails to show likelihood of such a market. o Purpose of use? o Type of work used? o Amount used? o Effect on potential market for work?  No proof of harm to cartridge markets because there is no evidence of any plan that Nintendo was going to release enhanced versions of its video games Video Pipeline v. Buena Vista Home Entertainment - Entity uses copyrighted motion pictures to make short trailers, which are then available for money to clients, for viewing by retail consumers on the retailers’ web sites, for the purpose of promoting the sales of copyrighted videos - Facts: o Video Pipeline and BVHE entered agreement to allow Pipeline to exhibit certain videos from BVHE at video stores. BVHE demanded return of its promos after Pipeline sought a declaratory judgment that its use of BVHE materials online didn’t constitute copyright infringement, and Pipeline started creating its own promo clip archive - Copyright infringement established if P can prove: o P owns the copyrighted materials, and o D has engaged in unauthorized copying within Section 106 of the Copyright Act - Video Pipeline’s clips constituted a public performance under 106(4) o Pipeline’s Actions violated exclusive rights of the copyright owner

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Pipeline’s Argument o Pipeline says that the online promos were within the license o BVHE says that the copyright was violated via: o Reproduction  Had to make a digital copy of these movies so people could access them over the internet o Distribution  Streaming video – can actually save the video sometimes o Public display  Displayed publicly on the retail websites to anyone who wanted, no restrictions  Showing a picture out of sequence / still frame o Performance  Motion picture Public Performance o Went on at the residence or office of anyone using the service o Open to the public o Where substantial number of non-family friends are gathered o Columbia Pictures – even if you’re in a very small room, that you pay a fee to get into, this is still a public performance o All internet TV transmissions of images are public displays o Substantially Similar analysis  Guidance to determine whether edited movies into trailers is substantially similar  What is the line between full movie and a trailer?  Do any of the trailers satisfy the demand for the original movie First Sale Doctrine o Prevents the copyright owner from controlling future transfers of a particular copy of a copyrighted work after he has transferred its “material ownership” to another. o Pipeline argues that they transferred the material object, with the intention to increase the sales of the physical objects in the stores. o BVHE is not like a museum or art gallery, Video pipeline is not standing in the shoes of blockbuster and Netflix o Pipeline profits from its actions in creating video previews, making copies and providing online access

17 U.S.C. 107 Limitations on Exclusive Rights: Fair Use - The fair use of a copyrighted work, such use by reproduction in copies or phonorecords or by any other means for purposes such as criticism, comment, news reporting, teaching, scholarship, or research is not an infringement of copyright. In determining whether the use made of a work in a particular case is fair use the factors to be considered are: o The purpose and character of the use, including whether such use is of a commercial nature or is of a commercial nature of is for nonprofit educational purposes o The nature of the copyrighted work o The amount and substantiality of the portion used in relation to the copyrighted work as a whole o The effect of the use upon the potential market for or value of the copyrighted work - The fact that a work is unpublished shall not itself bar a finding of fair use if such a finding is made upon consideration of all the above factors Fair Use - Affirmative Defense – D bears burden of proof Harper & Row Publishers v. Nation Enterprises - The Nation made unauthorized use of quotations from a public figure’s unpublished manuscript and produced a piece based on the work

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Time first agreed to purchase right to print republications of the work, but withdrew when the Nation’s article came out Harper instituted procedures to encourage confidentiality Analysis o Publication of an author’s expression before he has authorized dissemination infringes author’s right to decide when and whether it be made public, a factor not present in fair use of published works. Need ot assure authors the time to develop their ideas free from fear of expropriation outweighing news value gained from premature publication o Respondents say that fair use scope is wider when the issue is of public concern, and public has an interest in learning news as fast as possible  Copyright/expression dichotomy strikes a definitional balance between 1st Amendment and copyright by permitting free communication of facts while protecting the author.  Need right to market work as just compensation for the time invested. If they couldn’t’ protect their unpublished work, there would be no incentive to create memoirs and the public would be denied this information o Factors:  Purpose of the use  Whether claim of news reporting is a valid fair use defense to an infringement of copyrightable expression  Every commercial use of copyrighted material is presumptively unfair exploitation of the monopoly privilege  Nature of work  Primarily factual…greater leeway for fair use  Nation excerpted subjective descriptions and portraits of public figures whose power lies in individual expression. This use exceeds necessity to disseminate facts  Copyright holders entered into a confidentiality agreement  Amount and substantiality of portion used  Took “heart” of the book (D says very small part of the book)  Direct takings constituting at least 13% of the infringing article  The article is structured around the quotes  They didn’t just take ideas from ford, they took his unique perspective in language  When it wasn’t a verbatim quote, it was a paraphrase  Effect on the Market  To negate fair use, one need only show that if the challenged use should become widespread, it would adversely affect the potential market for the copyrighted work  Nation’s piece had aura of authenticity

Sony v. Universal City Studios - Studios suing Sony for their Betamax VCR, alleging copyright infringement because consumers bought VCRs and used them to tape movies and TV programs - Most people used the Betamax for time-shifting, and less for archiving - Issue: Does use of a VCR fall under fair use exception? - Analysis o The seller of equipment that expands those producers’ audiences cannot be a contributory infringer if it has no direct involvement with any infringing activity o Commercial or non-commercial use?  Mostly non-commercial use o Standard for non-commercial fair uses:  P has admitted no actual harm to their copyrights to date. A challenge to a non-commercial use of a copyrighted work requires proof that either that particular use is harmful or that if it should become widespread, it would adversely affect the potential market for the copyrighted work. Actual present harm need not be shown. Such a requirement would leave the copyright holder

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with no defense against predictable damage. Nor is it necessary to show with certainty that future harm will result. Alleged harm  P owned copyrights in 10% of content Unlicensed use of the copyright is not infringement unless it conflicts with an exclusive right conferred by the copyright statute Use has no demonstrable effect upon potential market for copyrighted work. The prohibition of noncommercial uses would inhibit access to ideas without any countervailing benefit Public interest in making television broadcasting more available

Parody and Fair Use - If the original is not targeted, using it is just laziness and exploitation - Criticism or general commentary? Campbell v. Acuff-Rose Music - Issue: whether 2LiveCrew’s commercial parody of a Roy Orbison song is fair use - Holding: Parody’s commercial character is only one element to be weighed in a fair use enquiry, and that sufficient consideration was given to the nature of the parody in weighing the degree of copying. FAIR USE - Purpose o 2LiveCrew’s manager informed Acuff of the parody, and they would afford all credit and ownership for the original song to Acuff and that they’d pay a fee for use. Acuff denied them use and they released it anyways o Whether parody is in good or bad taste does not come into fair use debate o Commercial purpose of a work is only one element of the first factor enquiry into a work’s purpose and character - Nature o Some works are closer to the intended copyright protection than others, and fair use is more difficult to establish when the former works are copied - Amount and substantiality of portion used reasonable o Parody necessarily springs from recognizing allusion to its object through distorted imitation o When a parody takes aim at a particular original work, the parody must be able to conjure up enough of the original to make the object of its critical wit recognizable o Copying does not become excessive in relation to parodic purpose merely because the portion taken was the original’s heart o 2LiveCrew only copied the first line verbatim. No more was taken than was necessary - Effect on Potential Markets o When a lethal parody, like a scathing theater review, kills demand for the original, it does not product a harm cognizable under the Copyright Act o The role of the courts is to distinguish between citing criticism that suppresses demand and copyright infringement which usurps it o Law recognizes no derivative market for critical works. Digital Millennium Copyright Act - Although copyright is a strict liability statute, there should still be some element of volition or causation which is lacking where a D’s system is merely used to create a copy by a third party - OSP Safe Harbor if they: o Adopt, implement, and inform subscribers of its policy of terminating service to of users who are repeat copyright infringers o Adopt standard technical procedures used by copyright owners to identify and protect copyrighted works o Designate an agent to receive notification of claimed infringement from copyright owners and register the agent with the copyright office

U.S. v. elcom - What was the affect work? Adobe applied technical copyright protection to ebooks - D elcom’s program circumvented protection so ebooks could be read and copied more freely - Government charged D with trafficking in and marketing a copyright protection circumvention technology - Section 1201 prohibits trafikking in any tool that removes and technological measure that restricts infringement or copying of a work and does not permit trafficking in devices designed to bypass use restrictions in order to enable a fair use - D located in Russia then came to US - Elcom’s fair use argument says they can - Print ebooks purchased lawfully - copy ebooks across computers PDA after purchase - scan ebooks to Braille - Making backup copies of ebooks - should fair use be a defense to hacking copy protection? - Is circumvention a transformative use? - Is circumvention more harmful than infringement? - Is circumvention less protected by the 1st amendment? - Holding: No clear fair use is 1st Amendment right Fair use remains available Fair use like quotations, criticism, parody may be Perfect 10 v. Google - Perfect 10 sued Google for infringing Perfect 10’s copyrighted photographs of nude models - D.C. didn’t enjoin Google from linking to 3rd party sites that display infringing images but enjoined Google from creating and publicly displaying thumbnail images - Google’s search engine may automatically index webpages containing these images and provide thumbnails in response to user inquiries - Reproduction o Google never stores the photos; they just access the in-line link, a link that shows the other page in a preview window. o There was an intermediate reproduction - Direct infringement o Display Right  Server Test – Google’s thumbnails constituted direct infringement but was unlikely to succeed in its claim that Google’s in-line linking to full size infringing images constituted direct infringement  Google’s computers don’t store the images, so Google doesn’t have a copy for purposes of Copyright Act, but send the user to the publisher’s computers where the image is stored o Distribution Right o Display  First in thumbnail form, then full images framed by Google site - Google Cache o Google could access the images through the cache that Google has stored - Google Adwords o Google Adwords within the searches make the endeavor a commercial act. - Holding: o Were thumbnails a direct infringement? No, because Google’s use is a fair use, therefore, it didn’t infringe.  The purpose and character swayed the court. Productive way of improve access to images.  Nature of the work and quantity used didn’t favor Google because nature of the work was created and the amount of work used was sometimes a copy of the entire image to allow users to recognize it and allow users to get more information.

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Effect on market – Market substitution was uncertain. New market being created so it isn’t competitive. P argued that this new market would replace the online pay to view photos and market for the cellphone images o There had been a reproduction, but that was a fair use o The continuing distribution of thumbnails was ok because it wasn’t hurting markets and it wasn’t expensive to conduct the transformative use Digital Millenium Copyright Act

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Fair Use and Peer-to-Peer File sharing Software - Centers around application of Fair use doctrine, Sony decision, doctrines of contributory and vicarious liability to decentralized distribution architectures in which consumers engaged in reproduction, uploading, and downloading of protected works A&M Records v. Napster - Complaint alleges that Napster is a contributory and vicarious copyright infringer - Napster allows users to: o Make MP3 music files stored on individual computer hard drives available for copying by other Napster users o Search or MP3 files stored on other users’ computers o Transfer exact copies of other users’ MP3 files from one computer to another via the internet - Infringement o Napster users are engaging in reproduction (users who download files containing the music) and distribution (users who upload files to the search index) of copyrighted works, constituting direct infringement o Different than Sony analysis because - Fair Use o Purpose and character  Napster users engage in commercial user because a host user sending a file to a stranger isn’t personal use and Napster users can get for free something they would normally buy o Nature of use  Copyrighted music is creative in nature (Closer to core of copyright protection) o Portion Used  Napster encourages wholesale copying of copyrighted work via file transfer o Effect of Use on Market  Napster reduces audio CD sales among college students and raises barriers to P’s entry into digital music market - Identified Uses o Space-Shifting  Napster users download MP3 files to listen to music they already own on audio CD  Shifting here involves distribution of copyrighted material to the general public whereas Sony’s shifting was only copied to original user o Sampling  Napster says that users download the music to sample in order to decide whether to buy  Free, permanent copy downloaded  Free promo downloads are highly regulated by recording companies  Napster said that people would buy more using Napster because they are exposed to more music - P Claims o Knowledge  Napster has constructive and actual knowledge of infringing  RIAA informed Napster, Napster execs downloaded the copyrighted music for personal use, they enforced IP rights in other circumstances

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Napster has actual knowledge that infringing material is available on its system, could block access to infringers, and it failed to remove the material o Material Contribution  Napster materially contributes to the infringing activity o Financial Benefit  Financial benefit exists where availability of infringing material acts as a draw for customers o Supervision  Napster retains the rights to control access to its system but failed to use that right to prevent exchange of copyrighted material D Defenses o Waiver  Contributory liability can only be imposed to the extent Napster receives reasonable knowledge of infringement, knows that such files are available on Napster, and fails to prevent viral distribution on its network Holding: o Remand to district court to craft and injunction o Napster could be held liable for causation, inducement, or contribution to infringing conduct with knowledge of it

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MGM Studios v. Grokster - Background o Grokster distributes free software products that allow computer users to share electronic files through peer-to-peer networks. Their software can be used to share any type of digital file, but most transfers are of copyrighted digital music o P sued Grokster, alleging they knowingly and intentionally distributed their software to enable users to reproduce and distribute copyrighted works o MGM relies on Gnutella Technology, where a user who downloads and installs the software possesses the protocol to send requests for files directly to others’ computers o 90% of the files available for download on the system were copyrighted works o Grokster concedes infringement in most downloads, and they are aware that users employ software to download copyrighted files, and took active steps to encourage infringement o CTO sent an internal memo stating that that the goal is to get in trouble with the law and get sued to get in the news o Grokster sent users a newsletter promoting its ability to provide popular copyrighted materials o No evidence that the company made a filter - Sony o DC. Noted that there is no contributory liability for infringement unless distributor had actual knowledge of specific instances of infringement and failed to act on that knowledge o Appeals court held that D did not monitor or control the use of the software, had no right to supervise its use, and had no duty to police infringement o SC said that they were inducing infringement - MGM argues Vicarious Infringement o One infringes contributorily by intentionally inducing or encouraging direct infringement o One infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it, even if defendant initially lacks knowledge of the infringement - “Capable of commercially significant noninfringing uses” o Assuming 10% is noninfringing use, MGM says that this shouldn’t qualify as substantial and court should quantify Song to the extent of holding that a product used principally for infringement doesn’t qualify o Nothing in Sony requires courts to ignore evidence of intent if there is such evidence, and the case was never meant to foreclose rules of fault-based liability - Inducement Rule

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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 o Mere knowledge of infringing potential or of actual infringing uses would not be enough o Premises liability on purposeful, culpable expression and conduct, and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful purpose Inducement rule Analysis o Grokster, with OpenNap, encouraged adoption of a program by Napster users o Internal Communication and ad design was aimed at Napster users o No attempt to develop filtering tools to diminish infringing activity o The more the software is used, the more ads are sent out and the more revenue generated

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Elements of Contributory Liability - Causation, inducement, or contribution to infringing conduct - With knowledge of it o Knowledge of “specific infringing files” required Elements of Vicarious liability - Direct financial benefit from infringement - With right ability to control it Inducement of copyright infringement liability - Distribution of a device that results in infringement - With purpose of promoting its use to infringe “as shown by clear expressions or other affirmative steps taken to foster infringement” o Not merely knowledge and failure to prevent infringement o MGM notified companies of 8 million specific infringing files Enforcement and Remedies Remedies available in US for copyright owners - Injunction – Preliminary / Permanent o Seizure or impoundment - Damages – Lost profits / restitution o Statutory damages - $30,000 or $150,000 per work o Actual o D’s profits - Criminal Remedies

Sheldon v. Metro-Goldwyn Pictures - Issue: Whether, in computing an award of profits against a copyright infringer, there can be an apportionment to give the owner of a copyright on that part of the profits found to be attributable to the use of the copyrighted material as distinguished from what the infringer himself has supplied YES - Infringement of play “Dishonored Lady” by movie “Letty Lynton” - Petitioners looked at statute that said “all profits” should go to them - Respondents claimed that they produced the main factors to producing the movie’s large profits; the popular actors, the scenery, and the directors - Profits were garnered from a movie which had distinctive profit-making features apart from the infringing material by creative direction - Partial Measures o Reasonable Royalty  What % of profits would you get if you licensed it out

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o Yardstick o Before-after Should Sheldon be entitled to an injunction? o No, innocent actors and directors would go unpaid, there would be substantial loses to moviegoers and theatre owners What did Abend say about injunctive relief? o “great public injury” o Collaborative efforts of many talented individuals o Class film o Monetary compensation an adequate remedy

Notes - Section 504(a) allows the copyright holder to recover for both actual losses and any additional profits incurred by the infringer, so long as the copyright owner doesn’t incur a double recovery - Section 505 authorizes the award of attorney’s fees in the discretion of the court to prevailing parties (to P and D on an equal basis) - Punitive Damages not allows for copyright infringement - Preliminary injunctions granted where P can convince the court that a finding of infringement is likely. Court can presume irreparable harm, noting that it is difficult to “shut the door” after the infringement happens. A&M Records v. Napster - Napster wants damages, record companies want injunction - Napster contends that the court should have imposed a monetary penalty by way of compulsory royalty rather than an injunction - The royalty structure would grant Napster the luxury of choosing to continue to pay royalties or shut down o Wronged parties would be forced to do business with a company that profits from the wrongful use of their IP - In Sony and Rio, 9th Circuit had indicated that royalty is preferable to injunction where lawful uses of a product exist - Napster stressed “public interest” – millions of users - No great public injury here, as explained by Napster (Prevent new technology) o No public injury to not being easy to infringe music copyrights - Section 502(a) - Courts MAY grant injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright - Tasim and Campbell o Goals of copyright law are not always best served by automatically granting injunctive relief o When will denial of injunction best serve copyright’s goals? o Should architectural copyright holders be able to enjoin buildings? Public housing? Bridgeport Music v. Justin Combs Publishing - Bridgeport owned copyright to “Singing in the Morning” song. Combs released BIG album “Ready to Die” with an unlicensed sample of “Singing in the Morning”. P brings suit and is awarded statutory maximum of $150,000 damages plus $366,000 in compensatory damages and $3.5 million in punitive damages. D appeals. Holding: Punitive damages violates due process - Analysis: o Are some deliberate indifference. At higher level, there was a good faith effort to get licensing for the samples o Yes, jury found intentional infringement  Warned that they were infringing and they kept producing the album with the sample in it  Uncertainty about how many albums they would have sold “but for” the sample song  P wanted 25% of the song because of the sample 3 Guideposts for evaluating constitutionality of punitive damages claim:  Reprehensibility of D’s conduct

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Whether harm was physical as opposed to economic, the tortuous conduct evinced an indifference to or a reckless disregard of the health and safety of others, target of conduct had financial vulnerability, the conduct involved repeated incidents, harm the was a result of intentional malice  Here, no evidence of repeated actions, no physical injury, no malice, but intentional Disparity between P’s harm and the award  An award of more than 4 times the amount of compensatory damages might be close to the line of constitutional impropriety Comparison of the award and civil penalties in comparative cases  $150,000 statutory damages for willful infringement

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TRIPS Agreement - Treaty-Based Obligations to Enforce IP o Must be expeditious remedies to prevent infringement  Injunctions must be available from courts  Damages must be available against knowing or reckless negligent infringement  Attorney’s fees and costs must be available  Statutory damages and infringers’ profits can be but need not be available - Must be deterrent to further infringements o Must be destriuction or disposal without sale of infringing goods o Must be availability of orders that materials and implements the predominant use of which has been in the creation of the infringing goods be, without compensation of any sort, disposed of outside the channels of commerce European Community v. U.S. (WTO 2000) - EC is complaining about homestyle and business exemptions o Business - Radios or TV, not CDs, DVDs, or live acts. 2,000 sq. feet retail and 4,000 sq. ft. restaurants o Homestyle - If you’re a business and you buy something similar to what people use in their homes, you have an exception on copyright infringement for using it in to display copyright infringing videos in your establishment - WTO found that the business exception conflicts with TRIPS because: o It is not a certain special case in which limitation does not conflict with a normal exploitation of the work o Exemption covers a substantial majority of restaurants and bars in most retail stores - Business exemption unreasonably prejuidices legitimate interests of European copyright holders o Standard is unreasonable loss of income o EU copyright holders losing at least $400,000 in payments from use copyright holders o $50+ million losses - US bore burden of proof on Article 13 elements o EC showed prima facie of TRIPS violation NBA v. Motorola - Facts o Motorola sold a handset and marketed under SportsTrax, which displayed information of NBA games in progress o STATS hired reporters who collected real-time game information o Data made available: Scores, time left, quarter o Facts updated every 2-3 minutes o Would pager be substitute for the games? If they had the desire to see the game, the pager wouldn’t put them over the top not to see the game o Could it be a substitute for anything the NBA licenses or will license? Cut hits off of NBA.com or a license agree with someone else for ultra-fast updates - Claims Asserted o NBA claimed state common law misappropriation (“hot news”)

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P generate or gathers information at a cost Information is time-sensitive D’s use of the information constitutes free-riding on plaintiff’s actions D is in direct competition with a product or service offered by P Ability of other parties to free-ride on efforts of P would reduce incentive to produce the product or service that existence or quality would be threatened

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o Recognized a state common law claim for a taking of the facts and information lifted from AP stories. Hypo o Would it be misappropriation to rebroadcast World Series over a telephone call in-line? Motorola’s Defense: Preemption o Motorola averred that federal law preempts the state law, embodied in Section 301 of the copyright act. If a state tries to provide a state law version of a copyright, they are preempted by federal law Section 301: o A state law claim is preempted where:  Subject matter requirement – Same type of work (Subject matter requirement)  General scope requirement, same type of rights How is subject matter requirement satisfied? o Subject matter of copyright vs. copyrightable subject matter o Sports games are not copyrightable subject matter, but it is within the realm of copyrights. Preemption can arise out of a claim of copying a sports play or parade o Are facts and ideas within the subject matter of copyright?  Score, fouls, time (Not subject matter of a copyright)  Footage produce by director, cameraman (subject matter of copyright)  Public domain materials and unoriginal works can fall within subject matter of copyright although they aren’t copyrightable or copyright protectable Holding o General scope requirement satisfied – Equivalent legal or equitable rights o The NBA’s misappropriation claims was preempted because it fell within the subject matter and sought equivalent rights o Are all common-law misappropriation claims preempted?  No preemption of an INS-type claim Subject matter requirement is met when the work of authorship being copied or misappropriated falls within ambit of copyright protection Elements of copyright infringement – that allow a hot news claim to survive preemption are: o Time-sensitive value of factual information o Free-riding by D o Threat to existence of P’s product  No harm to NBA’s incentive to keep generating scores Should congress amend section 301? o Restrict notion of subject matter of copyright o Restrict notion od legal or equitable rights that are equivalent to Section 106 rights o Enact a Savings Clause

Comedy III v. Saderup - Right of publicity – Right of a person whose identity has commercial value, to control the commercial use of that entity. o Name, likeness, image, voice (speaking, singing), signature used in advertising or on products without their permission. - Exemptions include: news, public affairs, books, plays, fine art, TV, or advertisements for all these items - Facts o Comedy III is the owner of the Three Stooges copyright o Saderup sold lithographs and T-shirts bearing the likeness of the three stooges

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Comedy III asking for permanent injunction against any marketing or selling any art containing Stooges likeness D Defense – First Amendment o The right of publicity derived from public prominence doesn’t confer a shield to ward off parody and satire. Prominence invites creative comment o Depictions of celebrities amounting to little more than the appropriation of the celebrity’s economic value are not protected expressions under the 1st amendment Zacchini principles o State law may validly safeguard forms of IP not covered under federal copyright and patent law as a means of protecting the fruit’s of a performing artist’s labor o The state’s interest in preventing the outright misappropriation of IP by others is not automatically trumped by the interest in free expression, rather, the state law interest and interest in free expression must be balanced, according to the relevant importance of the interests at stake Entertainment that is merely a copy or imitation, even if skillfully carried out, doesn’t have its own creative component

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Doe v. TCI Cablevision - Hockey player Tony Twist known for getting in fights and being “the enforcer” - Comic book maker made a character named “Tony Twist” - Intent to make money on Twist’s celebrity status Hoffman v. ABC - Hoffman starred as a male actor who dresses up as a women to get on a soap - Photographed in red sequinned dress before a flag - ABC/Cap Cities published a Fabulous Hollywood Issue, where a bunch of celebrities, including Hoffman, had pictures of them altered with new spring fashions. - Hoffman sues based on right of publicity and unfair competition - D claimed 1st Amendment defense o The speech here wasn’t commercial speech because there was no paying for advertising for the ad o Image and associated tagline constituted humor, commentary about culture, and a photo with creative alteration o Court defines commercial speech: speech that does no more than propose a commercial transaction. Malice o A public figure like Hoffman can only recover damages for noncommercial speech from a media organization only by proving actual malice o Mere negligence is not enough to hold you liable. Image used digital magic to refashion the movie stills, so it was not intimating that Hoffman was promoting these altered images - Test? Hoffman must show that the magazine acted with actual malice, with knowledge that the photograph was false, or with reckless disregard for its falsity Recap: Copyright X - NBA v. Motorola – Common law misappropriation claim against seller of sports pager and supplier of score data was preempted by the copyright act. Recorded performance = subject matter copyright and wrongful copying without direct competition with performance or free-riding on scores - NBA v. Motorola – Hot news misappropriation claims are nto preempted if (1) highly time-sensitive info obtained at significant cost. (2) free-riding by defendant for direct competition (3) resulting threat to P’s incentive - Comedy III v. Saderup – Merely trivial expression added to the likeness of celebrities did not trigger 1st amendment defense to Cal. Right of publicity lawsuit - Hoffman v. Cap cities/ABC – Mag’s digital alteration of photograph of Hoffman to display him in fashion was 1st amendment protected Trademarks

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Brand names, logos, packaging, slogans, colors, smells Deceptive or misleading claims in promotional materials (false advertising) New and useful inventions, machines, processes, designs, business methods and chemical comp FINISH SLIDE

History of Trademark - FINISH SLIDE History of Trademarks o Congress shall have the power…to promote the progress of science and the useful arts by securing for limited times to author and inventors the exclusive right to their respective o FINISH SLIDE History of Trademark - Are any constitutional clauses relevant to trademarks other than… - FINISH SLIDE History of Trademark - Are trademarks constitutionally recognized? - FINISHED SLIDES History of Trademark - Why did courts first begin to protect TM rights? Economic Theory of Trademark - Chicago School theory of Trademark o What is the principal economic benefit of trademarks?  Trademarks reduce search costs  Compact, memorable, and unambiguous identifiers  Manufacturers can use a word or logo rather than lengthy claims  FINISH SLIDES Economic Theory of Trademark - Chicago theory of Trademark o What are some costs imposed by trademarks? o FINISH SLIDE o Rent-seeking – If you start handing out little monopolies like trademarks, people may spend too much money trying to strike it big…sways effort away from employing Spectrum of trademarks - What is a generic mark o Common descriptive terms, such as o Light beer, SUV, video buyer’s guide, instant messenger - Descriptive Marks o Wouldn’t apply the name to a category of products or class of goods o Identifies a characteristic or quality of goods, o Vision center, Sharp, boston beer, 24 hour fitness - Suggestive Mark o Coppertone, Greyhound, DieHard, Duracell, Chicken of the Sea, 7-eleven, bowflex - Arbitrary Mark o No association with anything, uses ordinary words in a fanciful way o Blackberry, Google, Apple o Arbitrary – Actual terms that have a meaning, but they are unrelated to the product

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Fanciful – You totally made it up – Exxon

Zatarain’s v. Oak Grove Smokehouse - Facts o Why would Fish-Fri be a descriptive or generic term o Court thought it was more descriptive than generic because it is specifying a term for a specific use. Not identifying a concept or a class of products o There was a secondary meaning for Fish-Fri because of evidence of sales (60,000 cases/year) - Tests o Dictionary tests  Couple definitions of Fish-Fri - Fried fish…Not a batter of seasoned corn flour to fry fish o Imagination Test  Suggestive if you need imagine to think about the name  Descriptive if you need no imagination. Here, it is descriptive o Advantage Need Test  Whether it confers an advantage to use the term as the name of the product o Widespread Use  Do other people in the industry use the term? - What is secondary meaning? o Survey tests the actual preferences of the consumer o Looking at what they associate Fish-Fri with o 28% of the time, people said that they used Fish-Fri - What other factors, other than the survey, was helpful as secondary meaning? o Amount of advertising – they spent a lot of money to get their name out there and people know about them o Length of time to register – Had been recent registered. If it just came out, fewer people will know about it o Type of Ads – If they are target to the likely buyer, they’d be more relevant o Character of use - Fair Use o Must not be used to free-ride on other trademarks o Ample evidence of good faith. Trying to minimize potential confusion in packaging - Chick-fri o Descriptive…At least as descriptive as frying chicken o Secondary meaning – Newer product, so it is more difficult to have common acceptance as a name Trademark Registration - May one register an immoral, scandalous, or disparaging trademark? o Old Glory condoms with flag designs? Immoral or scandalous? - A disparaging or offensive mark? o REDSKINS football team  Harjo v. Pro-Football  Appeals court wanted more survey evidence to evidence that the native Americans don’t like it and find it offensive  TTAB found no scandal, but disparaging  Appeals court found insufficient evidence of disparagement - Can you register a deceptive or misdescriptive mark? o Bo Ball not endorsed by Bo Jackson o Silkease if it’s not silk o Dutch Boy if not Dutch - May a functional mark be protected? o No o You’ve got mail

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Geographic Marks o Can be trademark as long as they are not primarily geographic o Bank of America ok, no on Maine Lobster What are the Requirements of Trademark Registration o (1) word, name, symbol, or device o (2) use or BF intention to be used by a person o (3) in commerce o (4) to identify and distinguish sources of good and services o (5) and is not comprised of or characterized as being  FINISH SLIDE

Trademark II Recap: Trademark I (FINISH SLIDE) - Zatarain’s v. Oak Grove o FISH-FRI was descriptive, but had “secondary meaning”, while CHICK-FRI was descriptive without secondary meaning o In order to establish a secondary meaning for a term, - Harjo v. Pro-Football Trademark Registration - Requirements of Trademark Registration o (1) Word, name, symbol, or device o (2) used or BF intention to be used by a person o (3) in commerce o (4) to identify and distinguish source of goods or services o (5) and is not comprised of or characterized as being  Offensive of disparaging material  Immoral subject matter  Deceptive or falsely implying a connection with person institution  Likelihood of confusion or mistake as to source  Merely descriptive or deceptively misdescriptive  Merely geographically descriptive  Functional word In Re: Nantucket - Nantucket shirt company is appealing from a trademark trial ruling (CCPA) - Nantucket wants a registration of the trademark - Appellee’s position: o Primarily geographically misdescriptive because Nantucket is an island in MA - Nantucket’s response: o There is no connotation between shirts and the geographic area. There is no close association - “Noted for” Test - If the goods do not come from the place named, and the public makes no goods place association, the public is not deceived and the mark is accordingly not geographically deceptive - Holding: There is no evidence that the purchasing public would expect men’s shirts to have their origin in Nantucket when seen in the market place with NANTUCKET on them. - “Public goods-place association” – Section 2(e)(2). Mark shall be evaluated when applied to the goods of the applicant and that registration be denied only when the mark is geographically descriptive or deceptively misdescriptive of them. Trademark Registration - Does a trademark owner need a registration to be protected?

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No, can sue under Lanham Act for false design, descry. Of name, qualities, or geographical origin of goods Benefits of Trademark rights o Prima Facie Evidence of trademark Rights  Ownership  Exclusive rights nationwide  Validity of trademark  Scope of use (extending to goods and date described on application)  Priority of use  Distinctiveness o Constructive nationwide notice of trademark claim  Incontestabiliity after 5 years o FINISH SLIDE

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Unconventional Trademarks - How might a sound be protectable as a trademark? o THX sound system in theatres o NBC Chime - When might a smell be? o Perfume – Convey an advantage…might be a problem o Specific flowery smell on thread - What isn’t registrable? o When smell is useful – air fresheners - When might a color be? o When it IDs the source of the product: pink insulation, red bolts o Lanham Act: “any word, name, symbol, or device” - What is registrable? o When it is the color of ingredients or otherwise not “unusual” Qualitex Co. v. Jacobson Products Co. - Qualitex had high quality green-gold dry cleaning pads. - Jacobson began to sell its own high quality dry-cleaning pads with a green-gold color - The functionality doctrine forbids the use of a product’s feature as a trademark where doing so will put a competitor at a significant disadvantage because the feature is essential to the use or purpose of the article or affects its cost or quality - If you don’t have secondary meaning yet, you can’t get protection (people associate the color with your brand) - Fanciful, arbitrary, or suggestive marks can be protected without a showing of secondary meaning - Tests for color o Must not be functional (having an effect on quality or cost) or o essential to purpose or use of product or service - Can the beauty of a color be functional? o Aesthetic functionality – competitive benefit from pleasing, visual, auditory, or olfactory form or content - If color has become industry standard, it is less protectable – red heart pill, black motors, green tractors, and blue fertilizer Two Pesos v. Taco Cabana - Taco Cabana owns Mexican restaurants with a bright color scheme - Trade Dress – the color combinations, size and shape or a business or product - Examples of trade dress o Restaurant décor o Product shapes, graphics, designs, and decorations - When is trade dress protectable? o When it is either (1) arbitrary or suggestive (inherently distinctive) or

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(2) descriptive but has acquired a secondary meaning (acquired distinctiveness or association in public mind with a unique source or maker) What is secondary meaning o Association in public mind with a unique source or maker Secondary meaning requirement would open up product design to copying Denying protection for inherently distinctive trade dress until after secondary meaning has been established would deter the originator form expanding into new areas

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Trademarks vs. Trade dress - What is functionality? o Relationship of trademark or trade dress to efficiency – only a few ways to do business o Essential to product’s use or purpose. OR affects its cost or quality - FINISH SLIDE - When can trade dress form a registrable trademark? o When the product packaging is either (1) inherently distinctive or (2) has secondary meaning o When a product design or color secondary meaning only – inherent distinctiveness insufficient to confer protection standing alone o May not be functional in any case - Relationship between patentability and functionality? o Patent is strong evidence of functionality o Definition: Essential to product’s use or purpose OR affects its cost or quality o Patent owner seeking trade dress FINISH SLIDE Trademark III I. Qualitex v. Jacobson Prods. Co. – Color may be protected as a trademark if it has secondary meaning II. Two Pesos v. Taco Cabana – Trade dress may be protected if it is not functional and either (1) arbitrary or suggestive (Inherently distinctive) or (2) descriptive but has acquired a secondary meaning (Acquired distinctiveness) III. TrafTix Devices v. Marketing Displays 0 Where patent covers product or packaging feature alleged to be trade dress, owner of trade dress bears heavy burden of overcoming presumption of functionality Trade dress Review - Trade dress o Product packaging, color, design, labels, fonts o Product configuration itself - Requirements for protecting trade dress o Inherently distinctive or secondary meaning o Must have secondary meaning for product shape or configuration (clothing designs) - Functionality exception o Cannot protect product feature that is essential to the use or quality or purpose of a product that affects cost, quality, attractivensss o Existence of alternative designs may affect analysis of whether feature is functional or ornamental

Trademark Infringement - Standard o Likelihood of confusion o Use of a trademark in connection with the sale of a good constitutes infringement if it is likely to cause consumer confusion as to the source of those goods or as to the sponsorship or approval of such goods. - TEST In deciding whether consumers are likely to be confused, the courts will typically look to a number of factors, including: o (1) the strength of the mark o (2) the proximity of the goods

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(3) the similarity of the marks (4) evidence of actual confusion (damages) (5) the similarity of marketing channels used (6) the degree of caution exercised by the typical purchaser (easier to prove infringement for less expensive products) o (7) the defendant's intent. Type of Confusion o Sponsorship – Consumer confused because they believe it was sourced by someone else o Post-sale confusion – Friends will think they’re Levi’s but they aren’t. o Source (Passing off) – Passing off your own stuff as coming from a different source o Initial Interest Confusion – One manufacturer uses the trademark of another to gain customer attention, but then use their own product o Reverse Passing off – Trying to convince people that someone else’s higher quality material was made by you. Not crediting initial producer

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Trademark Infringement - Should different product be a defense? o No, there are more factors to look at - Should dispelling confusion be a defense? Playboy v. Netscape - Netscape sold banner ads to advertise keyed “playboy” and “playmate” - Click here “no clear disclaimer of being Playboy” - Consumers were confused (survey) - Adult firms had to buy banner ads tied to 400 adult-oriented terms - District Court Rules summary judgment for Netscape - Standard for summary judgment o Strength of the mark  Strong secondary meaning  Longevity  Popular o Similarity of marks  Sound similar, same letters, font, capitalization, o Proximity  Close proximity of banner advertisements o Marketing Channels o Type of goods and sophistication care o Intent of D  If D is purposefully counterfeiting, it helps to show infringement - Difference between internet and physical context o Actual confusion in the internet context o Strength of mark and likely actual confusion are particularly important because other factors might not be as relevant o Internet context means at least one marketing channel the same. Internet users may be presumed to be easily diverted - Relevance of actual confusion here o 22-29% thought results actually sponsored by PEI o Strong enough evidence here to make a triable issue of fact of infringement o Intent to profit from P’s good will by refusing to make better labeling or remove trademarked keywords - Nominative Use TEST o First, the product or service in question must be one not readily identifiable without use of the trademark

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second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and o third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder. No fair use. Fair use cannot create a likelihood of confusion

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Playboy v. Welles - Former playboy playmate used Playboy Playmate of the year in text/Metatags/Wallpaper website background - Website had a disclaimer stating that she wasn’t affiliated with Playboy and that the trademarks were playboy o Welles argued nominative use - Nominative Use TEST o First, the product or service in question must be one not readily identifiable without use of the trademark o second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and o third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder. ( Trademark Infringement Review - Likelihood of confusion factors o Strength o Proximity o Similarity o Actual confusion o Marketing Channels o Types of goods and sophistication/care o Intent of defendant o Likelihood of expansion - Differences in internet context o Strength of mark and likely/actual confusion are important o Marketing channels and expansion are less important o Sophistication and care low: consumers easily diverted Murphy Bed v. Interior Sleep - PTO and TTAB action in 1980s, found that Murphy couldn’t get a trademark on Murphy Bed because it had become generic. - Genericide is tough to trademark o Dictionary o Newspaper and magazines o Asprin, heroin, thermos, escalator - Should policing save the mark? Mattel v. MCA Records - Concerning Barbie Girl song by Aqua (Parody) - Mattel sues for dilution and trademark infringement - Commercial of Non-commercial speech o Deemed non-commercial because it was commenting on the Barbie lifestyle o Test for commercial speech - Proposed more than a commercial transaction - The title is not commercial speech o The title discusses what the work is about, the topic, and its message, as opposed to its source - Rogers standard

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Literary titles do not violate the Lanham Act unless the title has no artistic relevance to the underlying work whatsoever, or, if it has some artistic relevance, unless the title explicitly misleads as to the source or the content of the work o Here, title doesn’t explicitly mislead as to the source of the work Free expression outweighed trademark interest o Trademark doesn’t control expression, just sources o Barbie had critical relevance to cong’s content Trademark Dilution o Blurring the line between the distinctive trademark on one item and the use of the term in another medium, product, or service. o Elements  Blurring  Senior mark must be famous  It must be distinctive  The junior use must be in commercial use in commerce  It must begin after the senior mark has become famous  It must cause dilution of the distinctive quality of the senior mark o Three statutory exemptions:  Comparative advertising  News reporting and commentary  Noncommercial use

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Mastercard v. Nader 2000 - Nader made a campaign commercial using the “priceless” commercials. - Mastercard claimed a trademark right in the priceless tag line and Mastercard line - Did Nader create likelihood of confusion o Strength and similarity of marks?  The strength and similarity were both strong o Similarity – Priceless was used in both advertisements o Proximity of the good and services – Favors defense. Not much proximity between campaign and Mastercard. In different industries o Actual confusion – Survey of less than 3% confusion. 452 emails. Only 2 indicated confusion o Faith in adopting trademark?  No defendant intent to confuse the public o Actual confusion is the most important of the factors Defense of Parody - Different message and context / No confusion - Satisfied Rogers test because I’m using the trademark in my title - Dilution – non-commercial speech anyways so I shouldn’t be liable for this parody Sherwood 48 v. Sony - Sony used the Times Square Buildings for the Spiderman movie and used their own advertisements. - The buildings were moved to a different part of times square - New York City Municipal Building erroneously placed in Times Square with a balcony - P said that this was trade dress on the wall of their building o Advertisements change all the time; there is no stable trade dress - P says using our building to promote your advertisers and they should get a piece of the revenue o The building is famous, but their owners aren’t very famous - What if Sony replaced all ads in NY with Sony ads - Holding: o First amendment Protects digital manipulation for scenery for dramatic effect of setting the scene

Dilution University City Studios v. Nintendo

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Nintendo of America, has engaged in the design, manufacture, importation and sale of the extraordinarily successful video game known as "Donkey Kong." Sues for common law unfair competition, Lanham Act 1125(a), and NY Anti-dilution act Problem: o Crucial issue in an action for trademark infringement or unfair competition is whether there is any likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question. Solution o Facts and circumstance analysis through Polaroid o Donkey Kong so obviously parodies the King Kong theme strongly contributes to dispelling confusion on the part of consumers o Parody does not constitute infringement or unfair competition where products are so dissimilar that there is no likelihood of confusion as to source, sponsorship or endorsement (Tetley) o Juxtaposing fragments of each mark does not demonstrate whether the marks as a whole are confusingly similar…. o While a survey may indicate the existence of a question of fact on the likelihood of confusion, … "the survey must . . .have been fairly prepared and its results directed to the relevant issues. o Proximity?  Different products. Easier case if Donkey Kong was a movie beforehand

Should we get rid of trademark anti-dilution law? - Does anti-dilution law improve economic efficiency? o Rewards advertisers for becoming famous by giving them broad rights. o Helps us economize on information costs by producing a compact, memorable ID of a product, therefore reducing search costs o Might prevent good products or truthful statements from being made Trademark dilution Revision Act of 2006
43(c). 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." Defenses to these type of claims? o Lack of fame  Duration of use, ads, marketing channel  Relevant factors? o No Commercial use o News reporting o Commentary o Fair use in comparative advertising

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Playboy Enterprises v. Welles (Trademark Dilution issue) - Federal statute against dilution - The owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person's commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark - All uses of the playboy trademark, PMOY Playmate of the Year and metatags, were nominal uses of the Playboy trademark, and is thus not dilutive

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Blurring occurs when another's use of a mark creates "the possibility that the mark will lose its ability to serve as a unique identifier of the plaintiff's product." Tarnishment, on the other hand, occurs "when a famous mark is improperly associated with an inferior or offensive product or service." Awards are not diminished or diluted by the fact that they have been awarded in the past. Similarly, they are not diminished or diluted when past recipients truthfully identify themselves as such. It is in the nature of honors and awards to be identified with the people who receive them. Of course, the conferrer of such honors and awards is free to limit the honoree's use of the title or references to the award by contract. So long as a use is nominative, however, trademark law is unavailing. However, PMOY wallpaper was dilutive o Was not a nominative use

Tiffany Inc. v. eBay, Inc. - Tiffany alleges that hundreds of thousands of counterfeit silver jewelry items were offered for sale on eBay's website from 2003 to 2006 and alleges trademark dilution - Tiffany has failed to prove that eBay's use of the TIFFANY Marks is likely to cause dilution… - While a trademark conveys an exclusive right to the use of a mark in commerce in the area reserved, that right generally does not prevent one who trades a branded product from accurately describing it by its brand name, so long as the trader does not create confusion by implying an affiliation with the owner of the product - Tiffany argues that eBay is liable for dilution by blurring because eBay uses the Tiffany name to advertise and sell products that eBay knows to be counterfeit, thus resulting in the "'diminution of the capacity of [Plaintiff's] mark to serve as a unique identifier of its products and services o eBay used Tiffany’s trademark to denote tiffany items, not their services - Tiffany also alleges that eBay is liable for dilution by tarnishment because eBay's use of the TIFFANY Marks harms Tiffany's reputation. (Pl.'s Pr. Findings at 38.) Tiffany submits that by linking Tiffany's marks to products of shoddy quality, "the public will associate, and continue to associate, the lack of quality or lack of prestige in the goods sold on eBay with genuine Tiffany goods. - Under the TDRA, therefore, to establish a violation of the Act, a plaintiff must show that: o (1) its mark is famous; o (2) the defendant is making use of the mark in commerce; o (3) the defendant's use began after the mark became famous; and o (4) the defendant's use is likely to cause dilution by tarnishment or dilution by blurring. - Tiffany claims that eBay is responsible for: o Knowledge  Ability to enact “Rule of 5”  Knowledge - eBay says that it is Tiffany’s duty to monitor the site for Tiffany’s rights o eBay says that it isn’t responsible for the content of its listings or the prices - There is incentive for eBay and Tiffany’s to sell genuine products - eBay took down all counterfeited products when notified of it - Nominitive Fair Use o Defense to dilution o "[u]ses that do not create an improper association between a mark and a new product but merely identify the trademark holder's products should be excepted from the reach of the anti-dilution statute. Such uses cause no harm o Non-trademark use – use of a plaintiff’s mark to refer to its own products Lamparello v. Falwell - Christopher Lamparello appeals the district court's order enjoining him from maintaining a gripe website critical of Reverend Jerry Falwell, fallwell.com.

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Supreme Court reverses, holding for Lamparello The site also contained in-depth criticism of Reverend Falwell's views. Top of website said “This website isn’t affiliated with Falwell. Click here to get to his site” Procedure: Falwell sent letters to Lamparello asking him to stop using any version of his trademarked name or the website, and P sued Falwell, seeking a declaratory judgment of non-infringement. Falwell countersued for trademark infringement, false designation of origin, unfair competition under VA and federal law, and cybersquatting Infringement and False designation of origin o Elements of infringement and false destination of origin  (1) that it possesses a mark;  (2) that the [opposing party] used the mark;  (3) that the [opposing party's] use of the mark occurred "in commerce";  (4) that the [opposing party] used the mark "in connection with the sale, offering for sale, distribution, or advertising" of goods or services; and  (5) that the [opposing party] used the mark in a manner likely to confuse consumers. o Elements of likelihood of confusion  (a) the strength or distinctiveness of the mark;  (b) the similarity of the two marks;  (c) the similarity of the goods/services the marks identify;  (d) the similarity of the facilities the two parties use in their businesses;  (e) the similarity of the advertising used by the two parties;  (f) the defendant's intent;  (g) actual confusion o Analysis  No likelihood of confusion because this site was criticizing Falwell  Similar domain names, different content  Fallwell.com not advertising business services o Falwell’s “initial interest confusion” argument(NOT ACCEPTED)  the Lanham Act forbids a competitor from luring potential customers away from a producer by initially passing off its goods as those of the producer's, even if confusion as to the source of the goods is dispelled by the time any sales are consummated  Profiting financially from initial interest confusion is thus a key element for imposition of liability under this theory  This critical element -- use of another firm's mark to capture the markholder's customers and profits -- simply does not exist when the alleged infringer establishes a gripe site that criticizes the markholder.  Must look at the content and infringing use Cybersquatting o Elements of Cybersquatting  (1) "had a bad faith intent to profit from using the [www.fallwell.com] domain name,"  (2) the domain name www.fallwell.com "is identical or confusingly similar to, or dilutive of, the distinctive and famous [Falwell] mark o Elements to distinguish abusive from legitimate domain names:  (I) the trademark or other intellectual property rights of the person, if any, in the domain name;  (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;  (III) the person's prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;  (IV) the person's bona fide noncommercial or fair use of the mark in a site accessible under the domain name;

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(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, affiliation, or endorsement of the site; (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; (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; (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 the 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 (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 this section.

Gilead Life Sciences v. Patel - Gilead-Sciences.com is registered with wildwestdomains - Procedure: o Complaint filed with arbitration and mediation center. o On August 3, 2005, the Center transmitted by email to Wild West Domains, Inc. a request for registrar verification in connection with the domain name at issue. o On August 4, 2005, Wild West Domains, Inc. transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the administrative and technical contact. o The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”). - On website: o Home/Greed/Forum/Contact o Comments please email/story about Gilead please email/complaints about other pharma companies please email o Patel put drug trademarks on the website o Logo of Gilead Sciences displayed prominently o Small text at bottom of scroll: ”This site is not affiliated or endorsed by Gilead”…website of Gilead Sciences is gilead.com - Gilead Complaints o Domain name gilead-sciences is identical or confusingly similar to P’s trademarks o Claims that mere inclusion of a hyphen does not alter a finding that the mark and a domain name are identical or confusingly similar o D intended to trick visitors to his site and it is not immediately clear that they aren’t visiting P’s site o P submits the use of Complainant’s trademarks to unfairly and deceptively attract and “misleadingly divert” traffic to Respondent’s website violates the Policy and Complainant’s established worldwide trademark rights. o Providing false WhoIs information establishes presumption of bad faith registration

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Patel contentions o Page directed to address greed in pharma industry in general o Disclaimer is same size of text on the page Uniform Domain Name Dispute Resolution Policy requirements for a domain to be transferred or cancelled o (1) the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and o (2) the Respondent has no rights or legitimate interests in respect of the domain name; and o (3) the domain name has been registered and is being used in bad faith. Element Analysis o Identical or Confusingly Similar  Inclusion of a hyphen doesn’t make it not confusingly similar o No Rights or legitimate interest  Elements of establishing a legitimate interest:  (i) before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or  (ii) you (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or  (iii) you are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.  Kumar has other pharma domain names but isn’t doing anything with them  Does a respondent generate rights for using a domain name of a trademarked company for a criticism site?  Not fair criticism to scroll many brand names when criticizing only 1 o Registered and Used Bad Faith  Bad Faith Elements  (i) circumstances indicating that respondent has registered or acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of the respondent’s documented out-of-pocket costs directly related to the domain name; or  (ii) respondent has registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that respondent has engaged in a pattern of such conduct; or  (iii) respondent has registered the domain name primarily for the purpose of disrupting the business of a competitor; or  (iv) by using the domain name, respondent has intentionally attempted to attract, for commercial gain, Internet users to respondent’s website or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation or endorsement of respondent’s website or location or of a product.  Respondent has registered the domain name in dispute and numerous other domain names incorporating the trademarks of well known companies in order to prevent the owner of the trademark from reflecting the mark in a corresponding domain name.

PETA v. Doughney - D registered peta.org where he set up a page peta.org “People Eating Tasty Animals”, parodying PETA

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4th Circuit held that Peta.org caused initial interest confusion and liability for trademark infringement Anticybersquatting Consumer Protection Act o Elements of ACPA  Bad Faith intent to profit from using a domain name  The domain is identical or confusingly similar to, or dilutive of, the distinctive and famous mark Doughney Arguments (REJECTED) o PETA raised ACPA claim in motion for summary judgment o APCA can’t be applied retroactively  APCA – applies to all domains registered before the Act, precludes damages, not equitable remedies o D didn’t seek to profit from PETA’s mark  D recommended that PETA settle with him or make an offer o D acted in good faith  D had no IP right in peta.org  Peta.org doesn’t ID D  No prior use of peta.org in connection with good or services  Commercial use, not fair use – Links to meat and other websites  Intention to divert and confuse peta visitors  False registration  D registered other domains similar to other trademarks Bad faith not necessarily willful malicious infringement – No attorneys fees awarded

4 Elements of a UDRP Claim: - A legitimate trademark right - An identical or confusingly similar domain name o { }sucks.com is usually transferred to trademark owner - Absence of a legitimate right o Need proof that domain name registrant lacks any legitimate right to use the domain name - Bad Faith o Registration of multiple names o Requesting money to relinquish them o Providing false address information Remedies - Actual damage or statutory damages of $1,000 to $100K per domain name - At election of TM owner - Cancellation of forfeiture of domain name - Additive of other remedies under trademark law What if there is no personal jurisdiction over the cybersquatter? - Any district with minimal contacts - In rem jurisdiction where domain name resides (File suit against domain name itself) Are domain name registrars liable? To domain owners? To TM owners? - Maybe liable for damages if register with bad faith intent to profit Do we need cybersquatting laws? Do they make the internet more efficient? - Reduce search costs? Should it be first come, first serve?

Trademark Remedies - Injunctive Relief o According to principles of equity o Preliminary injunction  Before a finding has been made, pending trial  Requirements  Likelihood of success on the merits  No adequate remedy at law  Balance of hardships and public interest  Plus bond if court finds a risk that D may prevail but pending court decision o Permanent injunction - Monetary Relief o To recover:  D’s profits  Any damages sustained by P (Actual damages)  Costs of the action  Treble Damages o Requirements  P is required to prove defendant’s sales only; D must prove all elements of cost or deduction claimed. Court may enter damages for sum above amount found as actual damages times to up to three times  P must prove that violation caused actual confusion among consumers of the P’s product, and, as a result, that P suffered actual injury (loss of sales, profits)  Only if registration of mark and notice or actual notice (Section 1111) o When may they be trebled?  Where infringement was intentional or willful (depends on circumstances)  Willful infringement: o When must they be trebled?  When D intentionally used a counterfeit mark and there are no extenuating circumstances o D’s profits  May not be duplicative of actual damages or lost profits royalties  May be reduced if award would be excessive o Does it matter what kind of trademark case if brought?  Actual damages or profits in dilution cases?  Willfulness  Remedies for counterfeiting?  Only for registered trademarks  Statutory damages?  Only for cyber squatting and counterfeiting  What other forms of relief are available?  Destruction of infringing items  Customs seizures  Cancellation or restoration of registrations Lindy Pen v. Bic Pen - Lindy had the trademark on the word “auditor’s” used on pens - Bic agreed to refrain from using the “auditor’s” on their pens - Later, Bic described it’s new pen as “Auditor’s Fine Point” to describe a certain pen model o The fact that they didn’t name the pen “Auditor’s fine Point” is significant - Was it an infringement? Yes

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o Telephone order confusion - Over the phone, you are more confused by the description o Lindy’s wanted an injunction and damages and Accounting of loss profits Holding: o Accounting is not automatic. Question as to whether it has to be willful. o P needed to show willful exploitation of a trademark and or actual confusion o No accounting here because Bic didn’t deliberately or willfully infringe  Research done on Auditor’s mark that 4 companies used the word Auditor in naming their pens  No actual confusion What is required to prove actual damage? o Burden on Lindy to establish fact and amount of damage

Statutory damages - Counterfeit marks o Treble damages plus fees unless extenuating circumstances o $500-$100,000 per counterfeit mark per type of goods o Up to $1 million per counterfeit mark per type of goods if willfulness - What is a counterfeit mark o Knowingly spurious close imitation of registered mark - Cybersquatting o $1,000 to $100,000 per domain name Tiffany v. eBay - Tiffany’s causes of action o Contributory Trademark Infringement  Continue to supply a product  With knowledge or reason to know of infringement - eBay arguments o eBay operated a program of allowing trademark holders to notify eBay of infringements (compliance program) o eBay said that the doctrine only applies to products - Court found that this doctrine applies to groups other than product sellers. This applies to eBay - Knowledge o Court wanted to split burden of creating the knowledge between eBay and trademark owners. Both must gather knowledge of infringement o Mere fact that eBay has received complaints about infringement doesn’t mean that they have specific knowledge of infringement of a specific item.  Only liable when they have evidence of specific infringement and those responsible do nothing about it - Tiffany’s Willful blindness theory o They can have reason to know and still be liable for infringement. o Suspect wrongdoing and you deliberately fail to investigate o No internal investigation into suspect listings on the site Remedies against importation - TRIPS – Articles 44, 50 o Judicial authorities shall have authority to prevent entry of infringing goods imported through customs - Article 9 o All goods unlawfully bearing a TM or trade anme shall be seized on importation into those countries of the union where such marks or trade name is entitled to legal protection

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o Seizure shall likewise be effected in the country where the unlawful affixation occurred or in the country into which the goods were imported US customs regulations o Bar importation of infringing goods  Including goods bearing counterfeit marks  Including goods bearing genuine foreign marks but physically and materially different unless they also bear a conscious and legible label stating that it is not the same good as the domestic good Paris convention o Give national treatment to foreign TM owners o Provide minimum level of protection to all owners o Priority filings Madrid Agreement for intl. reg. of TMs o Other nations must register or refuse within 1 year after conveyance Madrid Protocol o Basic application for international TM o 18 months plus opposition period to register or refuse US limitations follow US marks worldwide o Result of Us reluctance to allow overbroad foreign TMs covering uses, goods, and geo locations in which owner is not active EU TMs TRIPS Agreement o National plus MFN treatment o Minimum protections o Priority rules o Geographic indications

False Advertising - Lanham Act Provision on false or misleading advertising o Any person who uses in commerce any word, term, name, symbol, or device, or any false designation of origin, or false or misleading representation of fact which:  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 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. o A prima facie case of false advertising under section 43(a) requires the plaintiff to establish:  (1) A false or misleading statement of fact about a product;  (2) Such statement either deceived, or had the capacity to deceive a substantial segment of potential consumers;  (3) The deception is material, in that it is likely to influence the consumer’s purchasing decision;  (4) The product is in interstate commerce; and  (5) The plaintiff has been or is likely to be injured as a result of the statement at issue….  The failure to prove the existence of any element of the prima facie case is fatal to the plaintiff’s claim…. - Puffery o One form of non-actionable statements of general opinion under section 43(a) of the Lanham Act has been referred to as “puffery.” Puffery has been discussed at some length by other circuits. The Third Circuit has described “puffing” as “advertising that is not deceptive for no one would rely on its exaggerated claims.” Pizza Hut v. Papa John’s

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“Better ingredients. Better Pizza.” Slogan by Papa John’s Papa John’s has invested over $200 million in goodwill for their TM Pizza Hut said that, in the sauce and dough ads, the Papa John’s slogan was false and misleading. o Papa John’s said that they had better pizza sauce and dough because the sauce was vine ripened fresh pack and Pizza Hut’s remanufactured / Filtered water v. tap water for dough o Jury found that the slogan, sauce, and dough claims were false and misleading o Court ruled that Better Pizza and Better ingredients were too vague to be misleading and too boastful to be reasonably relied upon (Puffery).  Papa John’s sauce and dough claims were true, but misleading (no difference between tomato and dough)  “Better ingredients” became infected with misleading statements about tomato sauce and dough  Pizza hut failed to show misleading claims were material ro tended to influence purchasing decisions Plaintiffs attempting to prove actual deception have to produce evidence of actual consumer reaction to the challenged advertising or surveys showing that a substantial number of consumers were actually misled by the advertisements….

Parks v. LaFace Records - She brings suit against LaFace Records, a record producer, and OutKast, a “rap” (or “hip-hop”) music duo, as well as several other named affiliates, for using her name as the title of their song, Rosa Parks. Parks contends that Defendants’ use of her name constitutes false advertising under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and intrudes on her common law right of publicity under Michigan state law. o D’s intent was not to refer to her, but be symbolic o 21 consumers signed affadavits of people that said they were confused o 6th Cir. Concluded that OutKast had no right to adopt misleading title with no artistic relevance, and whether title and symbolic significance was disputed question of fact - Section 43(a) of the Lanham Act creates a civil cause of action against any person who identifies his or her product in such a way as to likely cause confusion among consumers or to cause consumers to make a mistake or to deceive consumers as to association of the producer of the product with another person or regarding the origin of the product or the sponsorship or approval of the product by another person…. - In order to prevail on a false advertising claim under § 43(a), a celebrity must: o show that use of his or her name is likely to cause confusion among consumers as to the “affiliation, connection, or association” between the celebrity and the defendant’s goods or services or as to the celebrity’s participation in the “origin, sponsorship, or approval” of the defendant’s goods or services o Consumer confusion occurs when “consumers . . . believe that the products or services offered by the parties are affiliated in some way,” … or “when consumers make an incorrect mental association between the involved commercial products or their producers,”…. A “likelihood” means a “probability” rather than a “possibility” of confusion…. - Courts have adopted three approaches to balance First Amendment interests with the protections of the Lanham Act: o (a) The “likelihood of confusion” test;  The strength of the plaintiff’s mark;  The relatedness of the goods;  The similarity of the marks;  Evidence of actual confusion;  The marketing channels used;  The likely degree of purchaser care;  The defendant’s intent in selecting the mark;  The likelihood of expansion in the product lines of the parties.

o (b) The “alternative avenues” test;  A title of an expressive work will not be protected from a false advertising claim if there are sufficient alternative means for an artist to convey his or her idea.  Test often takes away freedom of expression o (c) The Rogers v. Grimaldi test.  A title will be protected unless it has “no artistic relevance” to the underlying work or, if there is artistic relevance, the title “explicitly misleads as to the source or the content of the work.” Big O Tire Dealers v. The Goodyear Tire & Rubber Company - Civil actions for false designation, and common law trademark infringement, Big O asserting unfair competition from Goodyear - Big O used “Big O Big Foot 60” to mark their tires, but didn’t get a TM for Bigfoot. Goodyear then used the term “Bigfoot” to promote sale of its new radial tire - Goodyear did a TM search and sought consent from Big O to use Bigfoot in their ad campaign - Big O contends that Goodyear used its TM to create a likelihood of confusion concerning the Big Foot Tires o Jury found trademark disparagement – attacking validity of someone else’s trademark o Actual confusion – people contacting Big O to ask if associated…witness testified to actual confusion o Big O had to put on a corrective advertising campaign (compensatory damages)  Recoverable expense? Yes  FTC orders 25% of ads correct misleading prior false statements o Court of Appeals reduced the award  Big O was a small regional product, and they shouldn’t be entitled to Goodyear’s national reach.  Offended P can put a compensatory advertising campaign to undo the damage that was done with any TM infringement that occurred Patents - New and useful inventions, machines, processes, business methods, chemicals, and designs - How do they differ from copyrights? o Inventions vs. Writings o Ideas vs. expression o Novel non-obvious useful vs. original - Rights o Making using selling vs. copying (rights to exclude) o Application registration vs. Automatic vesting - Federal circuit vs. Regional circuits? o Subject matter  No protection for words, names, printed matter  Harder to patent colors symbols devices packaging  No requirement that invention be successful (secondary meaning or fame) o Rights  Making using selling vs. confusing diluting squatting o Constitution  Patent vs. Commerce Clause – effect on noncommercial uses - Requirements of a patent application o Individual inventor o Filing date o References cited o Date of patent

o Claims to the patent o Background of invention o Description of your preferred embodiment (Section 112(1) of the Patent Act) Patent History - Venetian Patent Act of 1474 o 10 year protection for new and ingenious devices that have been reduced to perfection so that it can be used o Remedies of destruction of device and monetary payment - Danger: Excessive granting of patents (Royal Perrogative Power) o Issued patents and monopolies exercised to promote arts and sciences for public good - Statute of Monopolies: No monopolies shall be granted except to first inventor of new manufactures - First U.S. Patent Act of 1970 o Of secretary of state, secretary of war, and AG, two of three could grant a patent for 14 years o Must be novel or new - Patent Act of 1973 o Secretary of state could grant 14 year patents  Any new and useful art, machine, manufacture, or composition of matter, or any new and useful improvement thereupon  Exclusive right of making, constructing, using, and vending patented invention Locke’s Labor theory of Patents - Property interest in own body and labor - World is held in common prior to appropriation for use - Application of labor, or improvement of land, turns common property into private property - Improvements enhance value of common property, and therefore justify property rights – reward - Improvements should benefit the laborer more than a 3rd party - Give a generation of protection – plenty of time to exploit your work Utilitarian Theory of Patents - Exclusive rights in inventions promote general happiness or economic growth o Different effects on different industries / uniformity / cost o Harmful technologies o Prices of inventions that would have been discovered / created anyways - “Chicago School” Theory of Patents o Inventions have a public good aspect (hard to produce for a profit) o High fixed costs and low marginal costs result in inadequate incentives to create inventions  Law provides an artificial scarcity Diamond v. Chakabarty - Chakrabarty is a microbiologist and inventor - Diamond is the commissioner of Patents - Chak invented a genetically-engineered bacterium that could eat oil - Chak took bacteria and gave it different and useful qualities - The patent examiner denied his patent because living things weren’t patentable - How do we distinguished patentable form unpatentable o Anything under the sun that is manmade is patentable o Chak’s bacteria was patentable as a manufacture of competitions of matter - Can you discover and patent useful matter? o No abstract ideas, natural laws, natural phenomena are not patentable - Reasoning

o Funk Bros. case:  Someone tried to patent a mixture of naturally occurring bacteria for its effect on plants. Can’t do it o Plant Patent Act  Plants couldn’t be patented because they aren’t manufactures or compositions of matter  Court here said that just plants are purely natural, not engineered like an organism o Should it matter whether genetic technology was unforeseen by congress when it passed the patent laws?  Not according to SC. Just interpreting broad terms of law Patentability of natural phenomena - Should plants be patentable? o Plant variety protection act allowed certificates for new, stable, sexually reproduced plant varieties o Plant patent act extended patent protection to a new variety of plant produced by cultivation - Should genetically engineered animals be patentable? o Harvard Mouse Patentability of Abstract Ideas - Telegraphic initially too abstract to patent o No patent on use of electricity to transmit letter or signs at a distance - Software that converts binary code into pure binary numerals o Simply a mathematical formula - Use of a computer to calculate temp. of rubber State Street Bank v. Sign. Financial - Signature created a data processing system to pool mutual fund portfolios to collectively manage daily assets, income, and expenses - Rapid calculation of customer’s shares in fund - Key Features: o Data processing system for o Managing the financial services of o A portfolio established as a partnership with o Reach partner being a fund, comprising o Hardware and software (computer, storage, circuits) - Holding o Signature’s invention could be patented if it produced a useful, concrete and tangible result o A mathematical formula is:  A series of steps or calculations  Here implemented by a computer that performs calculations on binary numbers o Patentable?  When it is practically applied in a useful way, to result in concrete and tangible result  Tangible Result here is a calculation of each fund’s daily share price is sufficiently precise to be used to report to the government and in trading o Mathematics aren’t always unpatentable because processes and machines are patentable though they contains an algorithm, as long as they also perform tangible useful operations - Should business methods be patentable Re Bilski - New standard for business methods patentability

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No patent for method of managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price Holding: Mental processes, and abstract intellectual concepts are not patentable State Street + something more directly physical, the aid of a computer or any other device Useful, concrete, and tangible results and insufficient – need to transform a physical object, machine, or data representative of a physical object of substance.

Patentable Subject Matter - Should patentability under Section 101 be expanded? o Natural elements and plants? o Printed matter on old inventions? o Intangible mental steps? o Computer-run business methods? o Sport techniques? Novelty Requirement - Gayler v. Wilder o Fact:  Invention was a fireproof chest or safe.  Salamander Safe – Non-heat conducting plaster for fireproofing the contents  Connor built a similar safe with plaster in it o Has to not have been known or used, and if P was the first inventor  Patent Act literally defines an invention as “not known or used by others before and patentee as original and first inventor o Holding:  When memory of an invention is lost, its rediscvovery is an invention  The public could derive no benefit from a lost invention until it was discovered by another inventor - Coffin v. Ogden o Facts:  Invention was a lock that opened 2 ways. D argued that the patent was made earlier by Uribe.  Invention had been known and used by divers in the U.S. o Court Rule:  Knowledge and use of the invention by one person defeats patentability  Court cites Gayler for idea that neither tests nor wide use is needed - Rules o Prior knowledge or use by others in U.S. = no patent  Section 102(a) – “known” means could be practiced by the public o Prior patent, sales, or print publication = no patent  Section 102(b) – more than one year prior to application o Prior abandonment by inventor = no patent  Section 102(c) – public, explicit announcement of no filing o Prior invention = no patent  Section 102(g) – in most countries, first-filing = priority o Prior commercial use of business method for 1 year = defense to patent claim  First Inventor Defense Act of 1999 – full defense if can prove commercials use of a method of conducting business more than 1 year before effective date - Statutory Bars o One year trigger for several bar to patentability  Public use bar – public use one year before filing o On-sale bar – public sale one year before filing

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o Printed descroiption bar – published more than one year before filing o Prior patent bar – more than one year before filing o Foreign patent – applicant’s own patent can bar U.S. patent if foreign patent applied for one year prior to U.S. patent and is granted prior to U.S. Patent Graham v. John Deere o Facts  P invented a shock absorbing clamp for plows that hit rocks in soil  P says my new patent isn’t obvious, you just flipped it o Standard  Measure the difference between what you’re trying to patent and the prior art,  Patentable subject matter must not be obvious as a whole to a person having ordinary skill in the art o SC  In light of Patent Clause limitation of patents to pr  FINISH SLIDE o Holding  The invention was obvious. Above and below the plate are the 2 only options  Obviousness Analysis  Assess Prior art  Discern differences between invention and prior art, and  Ascertain level of PHOSITA  What indicia of obviousness does Court identify?  Commercial success  Long felt, unsolved needs  Failure of others  Other courts have identified:  Industry respect for inventor’s patent  Suggestions of new invention in prior art  Intentional copying o Was clamp for vibrating shank plows obvious?  Yes, because Graham’s prior patent had a shank to prevent vibration  Inversion of hinge plate was obvious solution to the problem o Effects:  Are secondary considerations required for non-obviousness?  YES Amazon.com b. bn.com o 1997: Amazon files patent for on-click Web Sales

Design Patents - For decorative arts and aesthetic improvements – Granted on the ornamental design of functional items o Is a new design a discovery of an inventor under U.S. Const.? o Examples  Furniture  Silverware  Containers  Computer Casing - Requirements to get a design patent o Novelty o Non-obviousness

Is it novel, obvious, patentable subject matter (especially if software, or biological, etc.)

Summary: Patent infringement - Literal Infringement: Occurs when accused device contains every claim limitation - Nonliteral infringement – Occurs when accused device performs substantially the same function, in substantially the same way, to achieve substantially the same result - Prosecution History Estoppel – Presumption that an amendment of a claim to surrender of an equivalent precludes establishing infringement by that equivalent unless patentee could not reasonably have been expected to have drafted a claim that would have literally encompassed the equivalent at issue Egbert v. Lippman - Invention was corset steels - D said that they had a “public use.” o To constitute a public use of an invention it is not necessary that more than one of the patented articles should be publicly used o Public or private question doesn’t depend on number of persons to whom its use is known o If inventor sells it to someone without restriction, use is public, even though knowledge of the use may be confined to one person o Fact that friend could remove corset steels and show them to others was sufficiently “public” o No need for invention to be seen or observed by the public eye Technological Suppression Special Equipment Co. v. Coe - Facts: o Inventor sought new patent on less efficient version of pear coring machine without pear splitting knife o Protective second layer of patents to keep that market down o Court says that, in getting a patent, you can choose to use it or not - A patentee may not enlarge the monopoly of his patent by licensing his invention on terms or conditions which tie to its use the use of material or devices which the licensed invention does not embrace, whether they are patented … or unpatented…. - Control of a part could not be used as a means of enlarging an already acquired control of the whole. - Inventor doesn’t have to use patent or reasonably license – the public will have full information rights of use over the invention after expiration Interest in Public Access Adams v. Burke - Facts: o Invention for improvement on coffin lids o Assignment of the patent limited to 10 miles from Boston - Where a person had purchased a patented machine of the patentee or his assignee, this purchase carried with it the right to the use of that machine so long as it was capable of use, and that the expiration and renewal of the patent, whether in favor of the original patentee or of his assignee, did not affect this right. - When patentees subdivide territorially their patents as to the exclusive right to make or to sell within a limited territory, we hold that in the class of machines or implements we have described, when they are once lawfully made and sold, there is no restriction on their use to be implied for the benefit of the patentee or his assignees or licensees.

Eminent Domain in Patent Law - Started with Naval Appropriations Act o Whenever US uses or makes an invention, the owner can’t enjoin the US from making the invention, but can go to the court of federal claims and get compensation - Royalty Adjustment Act o Feds can set fair royalties for patents - Atomic Energy Act o There cannot be patents at all for atomic weapons inventions Dawson Chemical v. Rohm and Haas - Facts: o Invention for process of using herbicide to kill weeds o D sold the chemical and provided instructions on how to use it which infringed on patent because the patent holder had rights to the method (Contributory infringement) o Defense:  Patent misuse – Tying sales of unpatented herbicide to implied license of process patent  Maercoid – patent misuse to tie patent licenses to sale of unpatented material or a device that is itself an integral part of the structure embodying the patent - Doctrine of Patent Misuse Holding o Patent Act grants patentees right to stop sales of non-staple goods that are capable only of infringing use in a patented invention and constitute that invention’s advance Public Access – Experimental Use Madey v. Duke - Regardless of whether a particular institution is engaged in an endeavor for commercial gain, so long as the act is in furtherance of the alleged infringer’s legitimate business and is not solely for amusement, to satisfy curiosity, or for philosophical inquiry, the act does not qualify for the very narrow and strictly limited experimental use doctrine Integra Life Sciences v. Merck - Statutory extension of experimental use doctrine into FDA - New drug research falls within FDA approval exemption Patents and Public Health - Should there be a public health exception to patents? o Only a limited number of cases in which the exception will follow o Should it be limited to epidemics?  DOHA declaration limits is to public health – All medicine, sanitation, safety, nutrition o Should it extend to for=profit sales of infringing goods? - Should India and Brazil be allowed to export generic pharma to “least developed nations” despite infringement? o Will that advance aim of access to medicines for all? - Compulsory Licensing o Denial of right to sue defendants who pay a set fee o DOHA Declaration on TRIPS and Public Health:  Intl. law doesn’t prevent Members from taking measures to protect public health  Important in fight against AIDS, malaria, TB – 6 million deaths/year  Potential bird flu epidemic – Tamiflu prices  Right to grant compulsory licenses and declare national emergencies  Least developed nations have until 2016

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FINISH SLIDE

MercExchange v. eBay - Facts: o MercExchange patent was a method for creating a computerized market for used and collectible goods o MercExchange seeking a permanent injunction o D.C. said permanent injunctions against patent infringement are the general rule absent exceptional circumstances  Patents have attributes of personal property including the right to exclude others  P can still get permanent injunction at the end of the case - Holding and Analysis o 4 Principals of equity for injunctions  Suffered irreparable injury  Remedies available at law are inadequate to compensate for that injury  Considering the balance of hardships between P and D, remedy in equity is warranted  Public interest would not be disserved by a permanent injunction o Rejected rule that an injunction automatically follows o Injunction “may” issue under principles of equity o Should patent trolls be refused injunctions?  Ebay and Microsoft said that injunctions harm the public interest when they go to patent trolls (nonpracticing inventors)  U.S. government supported MercExchange on injunctive relief as a default remedy Remedies for patent infringement - Actual Damages - Reasonable Royalty o Minimum monetary recovery o D often argue that a reasonable royalty is $0. The patent is valueless. Infringing on a worthless patent. I could’ve easily avoided your patent o Reasonable royalty  Value  Existing exploitation  Profitability o Standard  A supposed negotiation at the time the infringement started  Counterfactual analysis  Georgia-Pacific Factors:  Established royalty  Royalties on comparable patents  Nature license  Licensing program  Parties’ competitive relationship  Effect on sale of unpatented items  Duration  Profitability  Innovativeness  Nature of use  Customary royalty  Expert test  Hypo negotiation - Lost Profits

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o When it shows amount of profit it would have made but for D o Standard  Demand for patented product  Absence of acceptable non-infringing substitutes  Manufacturing and marketing ability  Amount of profit the patentee would have made but for infringement o Getting lost profits on unpatented products  Rite-Hite case established that Patentee can get damages for unpatented non-infringing sales if would have made those sales would occurred without the infringement o Are post-expiration damages compensable?  Yes, you would have more customers, market share, goodwill, so you should be put in the same place when the patent expires as you were but for the infringement Treble Damages o NTP v. RIMM  Facts  Campana patents covered wireless email system and method  Permanent injunction granted against manufacture, use, imports or sale of Blackberries and related software  Parties settled for $612.5 million in return for perpetual license  Standard for enhanced damages  Willful or bad faith infringement o Offer to make P whole (voluntary cessation) o How did you handle litigation? o Actual notice of patent o Due care to avoid infringement o Competent legal advice obtained before infringing o Reason to believe you weren’t infringing  Enhancement of damages  By 50% of reasonable royalty  Mitigating Factors  Attorneys Fees  Reasonable when there is unfairness or bad faith in the conduct of the losing party  Or some other equitable consideration of similar force  Which makes it grossly unjust that the winner be left to bear the burden of his counsel fees  How is standard met? o Willful, wanton, or reckless conduct o Gross negligence  Examples o Dilatory tactics o Misleading demonstration o Rehashing issues with experts and post-trial motions

Trade Secrets - Uniform Trade Secrets Act o A Trade secret must be valuable, a secret, and an advantage - What is a trade secret? o A formula, pattern, compilation of information, a program, device, method, technique, or process - What is secrecy? o Not generally known or readily ascertainable by proper means? - What are reasonable efforts to maintain secrecy?

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o Non-disclosure agreements, non-competes o Keep the secret out of public use o Limited = copies o Put data in a locked room o Don’t disclose all info to any one employee o No necessary – secure vendor confidentiality agreements or hide data form one’s own employees What is misappropriation? o Spying/espionage o Acquisition of trade secret by improper means (knowing or negligent) o Acquisition of trade secret by mistake or accident o Disclosure or use of a trade secret obtained from another who used improper means o Disclosure or use of a trade secret acquired as a result of a breach of a duty of confidentiality Improper Means o Theft, bribery, breach of confidence, espionage o Do they have to be independently illegal under some other law? No, it can fall under trade secrets o Observation in public o Reading about it in published literature o License of secret from owner o Reverse engineering Remedies available under UTSA o Injunctive relief (against actual or threatened misappropriation) o Damages (actual loss an unjust enrichment, but not duplicative recovery or reasonable royalty in lieu of these) o Double damages (willful or malicious misappropriation) Criminal Remedies o GET NOTES FROM SLIDE Examples of Trade Secrets o Secret device o Secret formula o Secret Customer List o Secret discount or rebate code in a catalog o Method of bookkeeping or other office management Should misappropriation be illegal? o Even if the misappropriation had no duty of loyalty to secret-holder Elements of a Trade Secret Claim o Subject matter involved must qualify for trade secret protection; it must be the type of knowledge or information that trade secret law was meant to protect (Actual or potentially valuable due to secrecy o P took reasonable efforts to maintain secrecy o D acquired the information wrongly – D misappropriated the trade secret

Pepsico v. Redmond - Redmond was GM for Pepsi and was hired as COO at Quaker for Gatorade and Snapple - Redmond signed confidentiality agreement after Quaker bought Stokley van Camp - Redmond was privy to Pepsi’s Strategic Plan - Holding o Court found threatened misappropriation o Decisions would be influenced by PepsiCo confidential information - Could Redmond ever work for a competitor or Pepsi?

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o Quaker could actually see what Pepsico was doing with its distribution and incentive to misappropriate in 6 months because the strategic plan was put in place Should it make a difference if the company has a code of ethics?

Trade Secrets and Preemption - Patent Clause requires that no patent be issued except for the discoveries of inventors (new, nonobvious, useful) - States law not preempted – if protect against confusion o State may in appropriate circumstances, requires that goods, whether patented or unpatented, be labeled or that other precautionary steps be taken to prevent customers from being misled as to the source, just as it may protect business in the use of their trademarks, labels, or distinctive dress in packaging of goods - Should trade secret protection for patentable items be preempted? o Exposure kills any advantage. o Protections should be able to exist simultaneously o Kiwanee – Trade secret protection was not preempted even as to patentable matter - Should laws restricting copying of boat hull designs be preempted? o Bonito Boats: Removed information from the public domain. Can always patent it (Design or utility patent) - Section 301 of Copyright Act o “Subject matter” requirement – works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright o “General scope requirement – all legal and equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright o Trade secret rights are not equivalent to patent rights, and you might not satisfy the second prong of copyright preemption because trade secret protection isn’t against the whole world o Trade secret claims are not equivalent, must show breach of trust or other improper means, which is an extra element. 12/1/08 REVIEW Copyright theory - Lockean Labor theory o Creative labor transforms facts and ideas (held in common) into expression (private property that deserves reward/incentive) - Chicago School Economic theory of copyright o Ideas and expression and have a public good aspect o High fixed costs + low marginal costs = inadequate incentives o Copyright imposes artificial scarcity to enhance incentives Development of American Copyright - Copyright Clause o 1787: to promote the progress of science…by securing for limited time Copyrightability - Minimal degree of Creativity o Feist took 5000 white pages from rural o No infringement because minimal degree of creativity required – even if crude, humble, or obvious - Merger Doctrine

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Copyright in News Events

Ideas and Expression - Must have copied expressions, not just idea - Test is substantial similarity o Taking of expression of substantial value o Use abstraction test to filter out unprotectable ideas Copyright Duration - The extension of copyright duration o 1790 o 1976 o 1998 Act Copyright Infringement - Reproduction Right o Copies o Fixes in tangible medium - Distribution Right o Dissemination of copies o First sale doctrine - Public Performance and Public display Right o Sequence/isolation o Internet movie trailer firm publicly performed and displayed movies  Video pipeline v. Buena vista - Derivative Work Right o New medium, format, or a sequel o Game genie did not create indepdnent audiovisual work that incorporated nintendo’s works into a derivative work  Galoob v. Nintendo Fair Use - Harper Row v. Nation o Purpose and Character of use  Commercial or other (News reporting, educational, scholarly, research) o Nature of copyrighted work  Published or unpublished  Factual or fictional o The amount and substantiality  Heart or fingers  Quantitative (Took entire textbook) or qualitative (took meatiest parts of memoir – took most important aspect of the work) o Effect on potential market for the work: serialization, potential damages  Idea/expression and fact/expression dichotomy, and fair use Fair Use - Effect on market for the work o Unauthorized time-shifting could be fair use because noncommercial for end user, and no hamr shown o Sony’s constructive knowledge was not contributory infringement: substantial noninfringing use  Sony

o Campbell v. Acuff-rose: Difference between serious/parody use may trump presumption of unfairness o Web sites: LA times o Search engines: Perfect 10 o eBooks: Elcom o P2P: A&M v. Napster and MGM v. Grokster Copyright Remedies - Lsot profits o Actula damages or infringer’s profits - Injuctive relief o Great public injury may warrant compulsory royalties  A&M - Statutory Damages o Min $750 max $150,000 - DMCA Safe Harbors o No damages or injunctions under certain conditions against:  Automatic system caching  Directory, index, reference, pointer, or hypertext link  Transmission or transient storage of copyrighted material TRIPS Agreement - Treaty-based obligations to enforce IP o National plus MFN treatment o Must be expeditious to prevent infringements o Must be minimum copyright duration o Exceptions to copyright are allowed but:  Must not be overbroad defenses/compulsory  E.C. v. U.S. State law claims against copying - Common law misappropriation claims o NBA v. Motorola – no claim against seller of sports pager and supplier of score data for wrongful copying of recorded performance - Hot new misappropriation claims o NBA v. Motorola – Claim highly time sensitive information, obtained at significant cost, freeriding by D for direct competition, and resulting threat to P’s incentive - Right of publicity o Comedy III v. Saderup – 3 stooges rights of personality balanced against 1st amendment interests of seller of product exploiting their likenesses o Hoffman – Use of digital magic to parody tootsie photo – relevance of 1st amendment and actual malice Trademark theory - Lockean labor desert theory o TMs as property  TMs as fair earnings of an enterprise  TMs as reward for improvements to market for goods and services  TMs as encouragement to more investment o TMs as unfair competition  Unfair competition

Economic theory of TM - Chicago school theory of TM o TMs and search costs  Compact, memorable, and unambiguous identifiers o Overborad TMs and search costs  Basic words of the language – descriptive and generic terms  Accurate statements – nominative and fair use  Non-misleading statements – non-infringing uses o Property rights impose 4 types of costs  Increased prices and reduced sales  Enforcement costs  Contracting and licensing costs  Rent-seeking Federal TM Law - Lanham Act of 1946 o Any person who….likely to be damaged by such act o Commerce definitno Spectrum of TMs - Generic Marks o Common descriptive terms or IDers (SUV) - Descriptive Marks o ID a characteristic or quality of goods (bank of Texas) - Suggestive Marks o Suggest a characteristic or quality of goods (chicken of the sea) - Arbitrary Marks o Bear little or no relation to goods or services, such as Nintendo, Exxon o Arbitrary sound, smell, color may IDs unique source of goods: pink insulation, red bolts, intel chime TM Registration - Marks not subject to reg. o Offensive or disparaging material o Immoral subject matter o Deceptive or falsely implying a connection with person/institution o Likelihood of confusion with someone else’s TM o Merely descriptive o Merely geographically descriptive - 3rd party use may kill a mark o Aspirin o Thermos o Escalator TM Reg. - Don’t need a registration to be protected o Suit under Lanham Act for false description or designation of name, qualities, or origin of goods/services - Benefits to reg. o Ownership o Exclusive rights nationwide o Validity

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o Scope of use o Priority of use o Distinctiveness Constructive nationwide notice of TM claim Incontestability after 5 years Evidence of no likelihood of confusion with previously registered TMs Availability of foreign TMs and customs seizures More extensive remedies like lost profits, trebling

Trade dress v. TMs Trade Dress - Shape or design of a product/business - Distinctiveness (1) arbitrary or suggestive or acquired secondary meaning - Questions: ownership, functionality, likelihood of confusion - Functionality: competitive necessity v. essentiality to purpose or use of product - Presumption against trade dress protection rules for formerly or currently patented feature o TrafTix o Heavy burden of showing not functional TM Infringement - Polaroid/Sleekcraft factors o Strength, similarity, proximity, good faith o McDonalds mark infringed by McDental - Nominative Use o Have to refer to a TM to ID your product o Playboy v. Welles o USA today 900-number (New Kids v.) - Dilution and TM infringrmenet o Strength of mark, similarity, parody, actual confusion, other factors (Universal studios v. Nintendo - Internet keyword Ad buys o Liklihood of confusion analysis in Internet context: some factors not relevant  Internet context as marketing channel  Internet users easily diverted  Actual confusion and bad faith o Initial interest confusion – bait and switch o Selling keywords not always a nominative use or fair use o Keyword buys as dilution of TMs TM Parodies - Commercial speech and 1st amendment o Magazine parody of LL Bean catalogue in adult context was not subject to dilution claim, was protected by 1st amendment o Parody relies upon difference from original mark to produce desired effect - PCardtoons o Parody may infringe depending on Polaroid factors o Fair use is OK TM Dilution - TM Dilution revision act of 2006 o Authorizes injunction against use merely likely to cuas edilution to be enjoinable

Cybersquatting - Anticybersquatting Consumer Protection Act of 1999 o Section 43d of Lanham Act o Elements  Registering using or trafficking in a domain name  That is confusingly similar to mark or dilutive of famous mark, including a personal name  With a bad faith intent to profit from that mark o Actual or statutory damages o Cancellation or forfeiture o In rem actions o Liability of domain name registrars to TM owners THEN registrants - Bad faith intent to profit o Reference to offer or settle the domain name, false statements when registering name, registration of other domain names (PETA) o Criticism is not bad faith (Lamparello) Remedies for TM infringement - Monetary relief o Actual damages o D’s profits o Statutory damages o Costs of suit and reasonable attorney’s fees o Dilution (Willful) - Conduct relief o Injunctions according to equity o Destruction of infringing items o Customs seizures o Cancellation or restoration of registrations International TMs - TRIPs Agrement o National plus MFN o Minimum protections o Priority rules o Geographic indiecations - Madrid protocol o 18 months plus opposition period to register or refuse o National challenge plus 3 month priority window  US limitations follow US marks worldwide o Now 78 nations with 1 filing - Community TM o 27 EU nations with 1 filing, 350m consumers o Unitary system – fees, objections False Advertising - False, or true but misleading, claim in ads o Pizza hut v. papa john’s o Insufficient evidence that John’s misleading claims were material to consumer’s purchasing decisions - 1st amendment and misleading titles o Parks v. LaFace Records

o Whether a misleading title was false advertising depended upon whether title had artistic/symbolic significance Patents - Patents are difference from copyrights o Subject matter: inventions v. writings, idea v. expression o Subject matter: novel/nonobvious/useful v. original o Application: Registration v. automatic vesting o Infrignement: Making/using/selling v. copying o Appeals: fed court vs. regional circuits - Patents are diff from TMs o Subject matter: inventions v. words/names/symbols//devices o Subject matter: novelty/utility v. distinctiveness/fame/secondary meaning o Infringement: making/using/selling vs. confusing/squatting/diluting o Constitutional source: patent vs. commerce clause Labor theory of patents - Lockean labor theory - Economic theory Patentbaility - Unpatentable abstract ideas - Naturally-occurring organisms o Diamond Case - Pure mathematical formulas o State street case - Plant patents o Plant patent act – cultivated plant varieties o Plant protection act of 1970 Novelty requirement - Prior knowledge or use by others in US = no patent - Prior patent, saloes, or print publications > 1 year before app = no patent - Prior invention = no patent - Prior abandonment by inventor = no patent - Prior knowledge and use of invention by one person = no patent Statutory bars - One year trigger o Public use bar o On sale bar o Printed description bar o Prior patent bar o Prior use of business method Nonobvious requirement - An obvious improvement of existing invention is not patentable o Assess prior art o Ascertain difs between invention and prior art o Decide is PHOSITA would think obvious - Other factors

o o o o o

Commercial success Long felt need Dew Fe Fre

Patent infringement - Literal infringement o Accused device contains every eleent claim limitation o Claims limit scope of patent monopoly - Nonliteral infringement o And it equivalents is a legally implied term in each claim o Can’t add minor variations to conceal and shelter piracy o Infringement despite absence of literal claim limitation  Prosecution history estoppels  Warner-Jenkinsion Other defenses - Nonprofit use o No unless strictly philosophical interest - Lawful purchase o Patent owner may not control usage after sale absent a contract (adams case) - Technological suppression o One may patent a new nonobvious and useful device to keep it off the market (special equipment case) Patents and Public Health - Compulsory Licensing and Price Controls - WTO Declaration on TRIPS and Public Health Damages - Actual damages o Lsot profits on sales of patented device P would have made but for infringement o Lost sales on sales of unpatented device that suffered due to competition and infringing product’lsot profits on sale of entire apparatus that patented feature or device was made available o Reasonable royalty on infringing sales that P lacked capacity to make – hypothetical negotiation - Trebel Damages o Factors: notice, care, legal advice, belief patent wasn’t’ infringed Injucntive Relief - Permanent relief o MerExchange tets - Preliminary injunctive relief Trade secrets - Definition under UTSA o feriojio - Trade secret misappropriation is: o Freu - Acquisition of a trade secrets by improper means includes: o Theft, bribery

Trade secret remedies - Criminal remedies o Trade secret theft/attempt/conspiracy - Civil remedies o Injunctive relief o Damages  Actual loss, unjust enrichment, reasonable royalty o Double damages o Attorney’s fees Trade secret misappropriation - Actual or threatened o Pepsi case - Patent and copyright preemption o Patent clause – no patents except for discoveries of inventors  Sears case  Kewanee case  Bonito case Covenants not to compete


				
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